Does a home battery pay, and from which of its benefits?

How this calculation works

A home battery stores electrical energy for discharge at a later time. Financially, it can only generate positive returns if it saves more money on your electric bill than it cost to buy, install, and operate over its operational life.

1. The Reality of Net Metering vs Solar Storage

If your utility offers full 1:1 net metering (where each kilowatt-hour exported earns the full retail electricity rate), storing solar in a battery loses money. Because batteries suffer an 8% to 12% round-trip efficiency loss from AC/DC conversion and internal battery resistance, 1 kWh of solar stored yields only about 0.90 kWh when discharged. With 1:1 net metering, the grid acts as a 100% efficient virtual battery for free.

A battery only saves money storing solar if your exported power is credited at an avoided-cost or VDER rate that is lower than what you pay to buy power back from the grid.

2. Time-of-Use Arbitrage

Under a Time-of-Use (TOU) plan, the battery charges from cheap off-peak power overnight and discharges during expensive peak hours on weekdays. The net benefit per cycle is (usable kWh × peak price) - (usable kWh / efficiency × off-peak price). The spread between peak and off-peak rates must be large enough to overcome charging efficiency losses.

3. Backup and Resilience

For most homeowners with standard utility rates, the primary value of a home battery is emergency backup power during grid blackouts. Because backup value is personal (avoided hotel stays, preserving refrigerated food and medications, running a sump pump or home business), you can assign a dollar value per outage hour to see when backup peace of mind justifies the investment.

Data Sources & Benchmarks

Disclaimer: A planning estimate based on your inputs and the assumptions shown. Actual costs and eligibility may differ. Battery round-trip efficiency, degradation, and utility rate structures will affect financial performance.