How Batteries Can Unlock the Full Value of Your Solar Panels

For years, the biggest appeal of putting solar panels on your roof was the opportunity to feed the energy you produce into the grid, zero out your utility bill or perhaps even get paid for producing your own home brew electricity. 

But not all utilities are thrilled with this idea and there's downward pressure on what you can earn from selling residential solar as a result. This is just one of several factors leading more homeowners to add home batteries to their solar systems. 

Adding your own electron storage units can allow you to maximize your energy savings by taking control of how and when you use it and when you choose to sell it. And there's the benefit you'll only use when you need it most: It's a backup source of energy for when the grid goes down. 

What are home batteries?

Batteries are an underrated technological marvel; they're independence in a frequently portable (although often heavy) form. In the context of a home energy system, they typically take the form of large, stationary lithium units that come in any number of shapes, sizes and configurations, from Tesla's familiar Powerwall to smaller batteries that can be grouped into larger storage systems.

These versatile power cells can directly power DC devices, transfer energy into another battery like the one in your electric vehicle, or be converted to AC via an inverter to power household 120-volt appliances. 

The benefits of home batteries

While there's one basic function of a home battery -- storing electricity -- the applications are various.

Watch this: How to Approach Home Batteries if the New 30% Tax Credit Has Your Attention

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Emergency preparedness

"Batteries are an insurance policy," said Wyldon Fishman, founder of the New York Solar Energy Society.

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Unlike traditional landlines, which could make calls during a blackout, many modern landlines and cell phones need an external source of electricity to place a call. A backup battery could keep your phone charged or functional when you most need it.

Besides keeping the fridge running and your food safe to eat, batteries can keep other vital machinery running.

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Critical medical equipment is one such thing, Fishman said.

A better back-up

Fishman also argues batteries are a "better, cleaner and longer-term alternative for power" compared to a generator typically run by fossil fuels like gasoline or propane. These generators can produce carbon monoxide and, when operated without the proper precautions, can harm and even kill the people using them.

Electricity rate arbitrage and load balancing

In many places, the rates that utilities charge and pay for electricity varies by how much electricity you use and when. Home batteries can be used to maximize energy savings by storing electrons to sell or use during peak hours. This helps out the utility by evening out supply and demand, which can be a problem. 

Use more of the energy you make

Batteries store electricity as direct current. If you have devices like pumps, appliances and, notably, electric vehicles that use DC, you can power them off your batteries without the power loss that occurs when DC from your solar panels or batteries is converted to high-voltage household alternating current. That power loss can be as high as 18%, Fisman said.

Why solar panels and solar batteries make a great pair

Batteries are the missing piece that makes residential rooftop solar a more comprehensive solution, according to Fishman. 

During a blackout, you can't use solar panels and you're missing out on electricity generation that you paid for, Fishman said.

Without a battery, you're still largely dependent on the grid, even with a few panels on your roof. Adding batteries allows you to take full control of the electrons that your panels harvest from the sky.

"Don't buy so many modules, get a nice, fat battery," Fishman said. 

What is the average lifespan of a home battery?

Batteries are typically warrantied for at least ten years, but there's often a number of variables affecting their actual longevity.

It's better not to think of batteries' lifespan in terms of years, but in terms of cycles. Each time a battery is discharged and then replenished, it theoretically loses a tiny bit of its storage potential. You essentially damage batteries each time you use them. So a battery that sits fully or almost fully charged and is rarely called upon will likely last longer than one that is constantly used and recharged. 

Modern lithium batteries are temperamental to heat and cold, but if they are kept under stable conditions, they hold up much better over the long term than the flooded lead acid batteries of generations past. 

Fishman said she's been using batteries with her 2.4-kilowatt home solar system for over a decade. She opted to install more batteries rather than double or triple the amount of panels. 

"They're still going strong after 13 years. We don't have any degradation on the batteries," she said.

How much do solar batteries cost?

Costs for solar panels have gone down dramatically over the past few decades but not quite as fast for batteries.

"They are still relatively expensive," said Gilbert Michaud, assistant professor of environmental policy at Loyola University Chicago. "But that could change soon."

According to FindEnergy.com, as a rule of thumb you should expect to pay around $1,000 per kilowatt-hour of a battery's capacity. 

You can find batteries from as little as a few hundred bucks on up to $15,000 per battery. The average amount spent on batteries is in the top half of that range. Fortunately some of this cost can be offset by a 30% federal tax credit and other incentives. 

Factors that affect price

Battery price varies by brand, model and the specifics of your situation.

Power needs 

This will likely be the key driver of price. The more kWh you need to support your home's energy demands, the more you can expect to pay for larger or more batteries. The good news here is that sellers often offer a bulk discount if you buy more than one battery. 

Warranty 

Companies offering a strong warranty for their batteries often bake that into the price by charging a bit more. And of course, the inverse of this rule also seems to be true. 

Additional equipment 

Additional equipment like charge controllers, inverters and EV charging stations are going to be required to make your batteries' electrons usable in forms compatible with various appliances. 

Incentives 

Beyond the federal tax credit, a number of states and local jurisdictions also offer incentives for adding solar batteries to your system. Certain co-ops and other local utilities may even help you install batteries. 

Battery type 

There's lots of variation out there in batteries. Expect to pay more for a known brand or a stronger chemistry like lithium iron phosphate, or others that might outperform lithium ion batteries in certain ways.

Focus on the warranty

Most residential solar installers offer lithium batteries from a major manufacturer that will typically be warrantied for at least 10 years. There's usually some guarantee of a number (or unlimited) amount of cycles and an ending capacity guarantee to go along with that warranty duration.  

Batteries can fail or suffer from poor performance and shortened life spans for a number of reasons, like overheating and freezing. This makes the warranty a particularly important consideration, especially given the cost of setting up a robust battery bank.  

Here's a quick look at the warranties behind CNET's top six solar batteries as of July 2023.

Should you get a solar battery?

A solar battery is only a good deal if it fits your needs, budget and habits. If frequent power outages are a concern where you live or you can save more with time of use rates, it may be a no brainer. Before you make any major purchase, make sure you know it makes sense for you.