Home Battery vs Grid-Only

Where a battery's value comes from

A home battery makes money — or saves it — in a couple of distinct ways, and it helps to keep them separate. The first is time-of-use arbitrage: if your utility charges more for power at peak hours than off-peak, you charge the battery cheaply overnight and discharge it during the expensive window. The savings is the rate gap times the energy you shift, minus the slice you lose to round-trip efficiency (a battery gives back roughly 90% of what you put in). The second is backup: when the grid goes down, the battery keeps your lights, fridge, and Wi-Fi running. We put a dollar value on each outage you'd bridge so it can be weighed against the cost. A third source — using more of your own solar instead of selling it back to the utility at a low rate — isn't modeled here, but it's often the biggest win when a battery is paired with panels.

Why it's often a marginal deal

Here's the honest truth the sales pitch tends to skip: without a big peak/off-peak rate spread or frequent, costly outages, the arbitrage savings alone rarely beats the install cost over the battery's life. Shift 10 kWh a day across a 25-cent spread and you save a few hundred dollars a year — real money, but it takes a long time to claw back a five-figure install. Backup value is genuine but lumpy: if the power almost never goes out, that line is close to zero. Run your real numbers and you'll often find the break-even year lands beyond the battery's warranty. That doesn't mean a battery is a bad purchase — it means it's frequently bought for resilience and peace of mind, not as an investment that pencils out on a spreadsheet.

When it DOES pay off

There are situations where the math flips clearly positive. Steep time-of-use rates — a wide gap between peak and off-peak, or punishing peak-demand charges — make every shifted kWh count for far more. Frequent or expensive outages, whether from storms, wildfire shutoffs, or a flaky local grid, pile up backup value fast, especially if losing power means spoiled food, lost work, or medical equipment going dark. And pairing with solar is the strongest case of all: a battery lets you store your own midday solar and use it at night instead of exporting it for pennies, which can be worth more than arbitrage and backup combined. If two or three of these apply to you, the numbers above will reflect it.

What this simplifies

To keep the payback math legible, a few real-world factors are smoothed over:

• Round-trip efficiency. We assume about 90%, meaning you lose roughly a tenth of every kWh you cycle. Real-world figures range from the mid-80s to low-90s depending on the battery and how it's used.
• Degradation. Batteries fade with use — commonly around 2% of capacity per year — so the energy you can shift, and thus the arbitrage savings, shrinks over time. We hold it flat, which makes the later years here a touch optimistic.
• Backup value is subjective. What an outage is "worth" is a judgment call. We let you set it, but there's no objective market price — a few hours of dark may cost you nothing or a freezer full of food.
• Financing. This assumes cash. A loan adds interest on top of the install price and pushes the break-even year later, sometimes well past the battery's useful life.

About the incentive

The rebate or tax credit is the most variable number on this page. The US federal 30% Residential Clean Energy Credit ended for systems placed in service after December 31, 2025, so a battery you buy outright today gets no federal tax credit — though leased systems can still benefit indirectly, and some states and utilities add their own rebates or pay you to let them tap the battery during grid stress. We treat it as a plain input for that reason. Verify your own eligibility and set the field to what you'll truly receive, not the headline figure.