Are Solar Batteries Worth It in 2026?

A home battery stores solar power made at midday so it can be used in the evening or during an outage. Whether that is worth the added cost depends mostly on three things: how the utility pays for exported power, whether electricity prices change by time of day, and how much a backup supply is worth to the household. Since the federal residential credit ended, the price of the battery itself carries more weight than it used to.

What a battery does

The U.S. Department of Energy describes storage as a way to use solar power when it is needed most, regardless of whether it is sunny at that moment. The energy is saved and used later in the day, for example when the heat goes on at night or when the power goes out.

A battery does not make more electricity. A solar system with a battery produces the same energy as one without. The battery changes when that energy is used, and what each kilowatt-hour is worth at that moment depends on the utility’s rules.

When a battery pays: export rules

Under full retail net metering, every kilowatt-hour sent to the grid earns a bill credit at the same price as a kilowatt-hour bought later. The grid works as a free battery, and a physical battery adds little to the bill savings. The Department of Energy defines net metering as an arrangement in which system owners are compensated for solar power exported to the grid, and notes that whether a system qualifies depends on state and utility policy.

Many states and utilities now credit exports at less than the retail price. California is the clearest example. The state’s Public Utilities Commission established the Net Billing Tariff in Decision 22-12-056 as the successor to NEM 2.0 for customers who submit an interconnection application on or after April 15, 2023. The Commission states that the tariff is expected to promote grid reliability and incentivize solar and battery storage.

When exports earn less than the retail rate, a kilowatt-hour stored at noon and used at 7 p.m. avoids a purchase at the retail price instead of being sold for a lower credit. That gap is where a battery can pay for itself. The Solar by State page for each state describes how exports are credited there, and that rule is the first thing to check before pricing a battery.

Time-of-use rates

A time-of-use rate charges more for power during set hours, usually late afternoon and evening, and less at other times. Solar panels produce the most around midday, and the evening hours often cost the most. A battery moves production from the cheap hours to the expensive ones.

The size of the benefit depends on the gap between peak and off-peak prices in the specific rate plan. A flat rate leaves little to gain, and a wide spread leaves more. The rate schedule on the utility’s website lists the hours and prices, and the battery’s value should be judged against the plan that would apply once solar is installed.

When a battery pays: outages

Backup power is a benefit that does not show up in a payback calculation. A battery paired with solar can keep selected circuits running during an outage, and the California Public Utilities Commission notes that paired systems in its incentive program can function during a power outage as well as provide bill savings.

How much that is worth depends on the household. A home with medical equipment, a well pump, or frequent long outages places a higher value on backup than a home on a reliable grid. A battery sized for a few essential circuits covers less than a whole-home setup, so quotes should state which loads the battery backs up and for how many hours.

What the federal credit ending means

Until the end of 2025, battery storage qualified for the same 30% federal credit as solar panels. The IRS lists battery storage technology with a capacity of at least 3 kilowatt hours as qualified property, beginning in 2023, under the Residential Clean Energy Credit (Section 25D).

That credit is gone for new purchases. The IRS states that the credit is not available for any property placed in service after December 31, 2025, and the statute says the credit does not apply to expenditures made after that date. A battery bought and installed in 2026 by a homeowner who owns it receives no Section 25D credit. The 30% reduction that earlier payback estimates assumed is gone, which makes the battery decision more sensitive to price.

Separate business-side credits still exist in the tax code. Section 48E, which applies to owners of clean electricity facilities, contains an exception that keeps energy storage technology outside the end date that applies to wind and solar facilities. Residential customers do not claim that credit directly. It matters mainly when a third party owns the equipment, as with a lease or power purchase agreement, and the FTC notes that in those arrangements the tax credits and incentives go to the system’s owner rather than to the household. How much of any such benefit reaches the household depends on the contract, and a tax professional can confirm how it applies to a specific arrangement.

What storage adds to the price

Berkeley Lab’s 2026 Data Update reports installed prices for systems installed in 2025. Among cash-purchase residential systems, median prices were $2.1 per watt higher for paired solar-plus-storage than for stand-alone solar. The differential was smaller for loan-financed systems. For all host-owned systems, the median price was $4.9 per watt for paired systems and $3.6 per watt for stand-alone solar. These prices are before any incentives.

Two details matter for reading these numbers. Prices for paired systems are stated per watt of solar capacity, which allows comparison with stand-alone solar but hides the battery’s size. Also, about 80% of the paired-system price data comes from California, so the figures may not represent other states.

The median residential battery in the data held 13.5 kWh. As an illustration only, a hypothetical 7 kW solar system priced with a $2.1 per watt storage premium would cost about $14,700 more. Berkeley Lab also reports that 37% of new residential solar installs in 2025 were paired with storage, up from 25% in 2024, driven largely by California.

State and utility battery programs

Some states pay part of the cost. Two with official program pages:

• California. The Self-Generation Incentive Program lists a Residential Solar and Storage Equity budget for low-income residential customers, with an incentive of $1,100 per kWh of storage and $3,100 per kW of solar, subject to additional eligibility criteria. The CPUC page lists several other SGIP budgets as available only through 2025, and funding opens and closes in steps by utility, so current availability needs to be checked with the local program administrator.
• Connecticut. The Energy Storage Solutions program, launched in January 2022, offers incentives to residential and commercial customers who install storage and use it to benefit the grid. In its 2025 review, the Public Utilities Regulatory Authority shifted most participant compensation to a performance-based structure with a limited enrollment incentive at entry. Amounts change with each annual review.

Other states and utilities run their own programs, and these change often. A program that pays for a battery to be available to the grid can change the math more than any other factor.

A way to decide

A battery is more likely to pay when exports are credited below retail, when evening rates are far above midday rates, when outages are a real cost, or when a state program lowers the price. It is less likely to pay under full retail net metering on a flat rate with a reliable grid. Because the federal credit no longer applies to a purchased battery, the decision rests on bill savings, backup value and local incentives, compared against a premium of roughly $2.1 per watt of solar capacity for cash buyers.