Solar panel payback
See if solar panels pay off for your home: payback years, 25-year savings and net cost with no federal credit. Free, no sign-up, runs in your browser.
15-year net battery savings
+$13,606
15-year value ($24,606) vs net upfront cost ($11,000)Example calculationYes, peak-rate arbitrage and grid incentives pay back the battery
Shifting 12.2 kWh/day from a $0.08/kWh solar export credit to a $0.38/kWh evening peak rate generates $895/yr in Year-1 bill savings plus $650/yr in VPP and backup value. Your $11,000 net cost pays back in 6.9 years and nets +$13,606 over 15 years.
Net upfront cost
$11,000
$13,500 installed minus $2,500 rebateYear-1 total value
$1,545/yr
$895 TOU + $650 VPP/backupEscalated payback
6.9 yrs
7.1 yrs unescalated Year-1 paceNet TOU gain per cycle
$3.20/cycle
$0.262/kWh net after 90% effSide-by-side solar-only vs retrofit battery breakdown
| Cost or benefit item | Existing solar only | Solar + retrofit battery |
|---|---|---|
| Upfront retrofit equipment & installation cost | $0 | $13,500 |
| Upfront utility / state storage rebate | $0 | -$2,500 |
| Net upfront out-of-pocket cost | $0 | $11,000 |
| Year-1 TOU peak arbitrage savings (280 cycles/yr) | $0 | $895/yr |
| Annual Virtual Power Plant (VPP) grid-event payout | $0 | $350/yr |
| Annual outage backup power value | $0 | $300/yr |
| 15-year cumulative TOU bill savings (3.5%/yr rate growth, 2%/yr fade) | $0 | $14,856 |
| 15-year cumulative VPP payouts + outage backup value | $0 | $9,750 |
| 15-year net financial gain (cumulative value minus net upfront cost) | $0 | +$13,606 |
Cumulative battery cash flow over time
See how annual TOU bill arbitrage (adjusted for utility rate inflation and battery capacity fade) and VPP/backup value pay back the upfront battery cost:
| Horizon year | Annual TOU savings | Annual VPP + backup | Total annual benefit | Cumulative value | Cumulative net cash flow |
|---|---|---|---|---|---|
| Year 1 | $895 | $650 | $1,545 | $1,545 | -$9,455 |
| Year 3 | $921 | $650 | $1,571 | $4,674 | -$6,326 |
| Year 5 | $947 | $650 | $1,597 | $7,855 | -$3,145 |
| Year 7 | $975 | $650 | $1,625 | $11,090 | +$90 |
| Year 10 | $1,017 | $650 | $1,667 | $16,048 | +$5,048 |
| Year 15 | $1,092 | $650 | $1,742 | $24,606 | +$13,606 |
How this calculator works
When you already own rooftop solar panels, adding a battery does not generate new electricity. Instead, it changes when your solar energy is used. Rather than exporting midday solar power to the utility grid for a wholesale export credit (often $0.05 to $0.10/kWh under modern net billing or NEM 3.0 tariffs), the battery stores that energy and discharges it during expensive 4 p.m. to 9 p.m. peak windows ($0.35 to $0.55/kWh).
Why round-trip efficiency and export credits matter
Every kWh sent into an AC-coupled battery loses roughly 10% to inverter conversion and heat (90% round-trip efficiency). If you charge 12.2 kWh of midday solar that would have earned an $0.08/kWh export credit ($0.98 foregone), you get 10.98 kWh back during the evening peak at $0.38/kWh ($4.17 saved), netting $3.20 per daily cycle. Over 280 sunny shifting days per year, that arbitrage produces $895 in Year 1 and grows as utility rates escalate, gradually tempered by 2%/yr battery cell degradation.
Frequently asked questions
Does adding a battery save money if I have grandfathered 1:1 net metering?
No. Under full 1:1 retail net metering (such as California NEM 1.0/2.0 or utilities with 1:1 monthly rollover), the utility grid already credits your daytime solar exports at the full retail price. Cycling a battery under 1:1 net metering loses 10% of your solar energy to round-trip conversion losses, so a battery is purely a backup-power purchase rather than a bill-saving investment.
What is a Virtual Power Plant (VPP) program?
Many utilities and state energy agencies pay battery owners an upfront enrollment rebate ($1,500 to $3,500) or an annual performance payment ($250 to $500/yr) for allowing the utility to discharge stored battery power during 15 to 30 extreme summer grid peak evenings per year.
Why is a retrofit battery usually AC-coupled?
Existing solar arrays already have a grid-tied string inverter or microinverters converting panel DC power into household AC power. An AC-coupled battery (like a Tesla Powerwall or Enphase IQ Battery) includes its own built-in battery inverter and connects straight to your electrical panel without replacing your existing solar inverters.
Benchmark sources and dates
Starting assumptions are example benchmarks, not binding quotes. Change any input to match your own bills or offers.
| Assumption / Input | Starting value | Source | Checked |
|---|---|---|---|
| Residential AC-coupled battery retrofit installed cost and usable capacity | $13,500 installed cost for 13.5 kWh nominal (12.2 kWh usable cycled capacity) | National Renewable Energy Laboratory U.S. Solar Photovoltaic System and Energy Storage Cost Benchmarks | 2026-04-01 |
| Round-trip efficiency and annual lithium-iron-phosphate (LFP) capacity degradation | 90% round-trip efficiency, 2.0%/yr capacity fade over 15-year warranty | Lawrence Berkeley National Laboratory Tracking the Sun and Residential Storage Analysis | 2026-04-01 |
| Peak time-of-use (TOU) retail electricity rate, solar export credit, and rate escalation | $0.38/kWh evening peak rate vs $0.08/kWh net billing export credit, 3.5%/yr utility escalation | U.S. Energy Information Administration Electric Power Monthly and Net Billing Tariff Benchmarks | 2026-04-01 |
| State/utility battery rebates, Virtual Power Plant (VPP) grid-event payouts, and outage backup value | $2,500 upfront rebate, $350/yr VPP grid support payout, $300/yr outage backup value | Lawrence Berkeley National Laboratory Behind-the-Meter Battery Storage and VPP Valuation | 2026-04-01 |