The complete buyer’s guide to home backup batteries in 2023

When you picture a battery, the first thing to come to mind is probably the disposable batteries you put in everyday appliances like your TV remote—but did you know you can power your entire house with (much larger) batteries?

Whether you frequently experience outages, are paying exorbitant electric bills, or simply want more energy independence, batteries can be a great investment for your home. You don't need a home solar panel system to reap the benefits of batteries, but you'll get the most out of your system when you pair them together, especially if your utility doesn't pay you a lot for the excess electricity your solar panels generate and send to the grid. 

We'll explain how to decide if backup batteries are right for you and, if so, how to get a battery system that fits your needs at the best price.

Batteries work by storing energy produced now for use later. Instead of having to produce electricity at the exact time when you need it, batteries allow you to generate electricity at any time, providing flexibility for how you meet your demand with supply. Storing energy offers many benefits, from financial savings to backup power in a grid outage.

For most battery systems, there's a limit to how much energy you can store in one system—to store more, you need additional batteries. Additionally, in most cases, batteries can't store electricity indefinitely: Even if you don't pull electricity from your battery, it will still lose its charge over time.

We'll focus on the benefits of home backup batteries throughout this guide, but it's also important to understand why batteries are increasing in importance at a much larger scale: 

Batteries integrate renewable resources

At a large scale, the biggest use of batteries is to help integrate more renewable energy onto the grid. One of the primary criticisms of renewable energy resources like wind and solar is that you can't count on them to produce energy at the exact time you need it like you can with fossil fuels. They produce electricity when the wind is blowing, and the sun is shining, but not when the wind is still, and the sun has set. 

Energy storage, and batteries in particular, help solve this problem by providing an uninterruptible power supply: If you store excess energy produced by solar or wind, you don't have to worry about fluctuations in production and can better match supply to demand. Solar and wind can operate more like a traditional power plant when paired with batteries. 

Batteries provide resilience

One of the main reasons that homes and businesses install batteries is for resilience or emergency backup power. If the electrical grid goes down for any reason, whether due to a major storm or utility shutoff, a battery backup system can keep your lights on even when all the other homes in your neighborhood are dark.

Batteries can also keep more than just your home or business running during an outage: A large enough battery system, or a microgrid, can power an entire neighborhood or city block, even when the rest of the grid is down.

Batteries can power transportation

Based on data from the Environmental Protection Agency (EPA), in 2021, transportation contributed more greenhouse gas emissions (29%) than electricity (25%) in the United States. Electric vehicles (EVs) are a much more sustainable alternative to gas-powered cars, using batteries instead of internal combustion engines as a power source. As batteries become more affordable and more energy-dense, EV ranges will increase and charge times will decrease, accelerating the transition to electric cars. 

Batteries provide grid services

In 2022, the U.S. consumed 14 times more electricity than in 1950, yet much of our grid infrastructure has largely remained the same. The electric grid requires a significant amount of power to operate, and disruptions to service due to factors like shifts in supply and demand or system-wide blackouts can have significant consequences for grid health and stability. Batteries can quickly charge and discharge, helping utility companies balance supply and demand without interrupting your service or requiring major infrastructure updates. 

During major power outages, batteries are also important for bringing the grid back online. Batteries and other energy storage resources like generators provide black start capability, meaning they can operate independently and supply enough power to restart the grid. This is a critical capability: Without enough resources on the grid capable of black start, the large, inertial power plants (like natural gas turbines) would struggle to start up again after shutdowns, prolonging major blackouts indefinitely.

You don't need solar to install a home battery, but remember that batteries only store energy—they don't produce it. To truly increase your grid independence and your electric bill savings, you'll want to pair your battery system with a solar power system. Here's how it works: 

1. Your solar panels generate direct current (DC) electricity from the sun's energy.

2. The DC solar energy flows through an inverter (or multiple inverters), which converts it to alternating current (AC) electricity, the type of electricity that most home appliances use.

3. You run your home on this AC electricity. 

4. Any extra electricity you don't consume charges your batteries (either pre- or post-inversion, depending upon the system you install – more on this below).

5. When the sun goes down or the power goes out, the energy stored in your batteries powers your home.

Most batteries last about 10-15 years, meaning you'll have plenty of time to break even on your investment. While many homeowners can benefit from installing a battery system, they're not right for everyone. Here are a few questions to answer when deciding if you should add a battery to your home: 

1. Do you frequently experience power outages?

Power outages are an occasional nuisance for everyone, but for some people, they're a far too regular occurrence: According to the Energy Information Administration, in 2021, the average U.S. electricity customer experienced 7 hours of electricity interruptions across fewer than two interruption events. However, customers in Louisiana and Oregon averaged over a day in cumulative outage time in 2021.

A solar-plus-storage system is likely a worthwhile investment if you're experiencing prolonged power losses multiple times each year. Unfortunately, your solar panels alone won't power your home during an outage because it's a safety risk to utility workers. 

When you install a solar-plus-storage system with islanding capabilities (meaning it has the proper equipment and wiring to automatically disconnect from the grid during a power outage), you can continue running your home, even when the grid goes down. Power outages can cost homeowners anywhere from $25 to $25,000, depending on the severity and impact, so you could recover the cost of your battery system very quickly in some cases by powering your home through even a handful of outages. Some battery systems can even connect to your Wi-Fi to send notifications about upcoming weather events and automatically enter backup power mode.

2. Does your utility company offer net metering?

If you have a solar panel system, when the sun's shining, it will likely produce more electricity than you need. Many states have a solar policy called net metering, in which you receive credits from your local utility company for the excess electricity you send to the grid. After the sun sets or on a rainy day when your panels aren't generating enough energy, you'll pull electricity from the grid, which will count against the credits you've banked over time. At the end of your billing cycle, you'll only be billed for your "net" energy consumption (meaning your electric bills could be $0)!

However, a growing number of states (including California) are changing their policy to compensate you at a much lower rate for the electricity you send to the grid compared to what you pay when you pull from the grid. These new solar compensation rates are typically based on the avoided cost rate, or the price your utility company would pay to purchase this electricity elsewhere; sometimes, they're quite high, and other times, you barely receive any compensation for exporting electricity to the grid. 

Under these policies, you could still have a hefty electric bill even with solar. By pairing your solar panels with a battery, you can program your system to export electricity to the grid only when compensation rates are high and pull from your battery when rates are low, maximizing your savings.

3. Do you have TOU rates or demand charges?

Even if you don't have solar, batteries alone can be worth it if your utility uses a complex electricity rate structure. Time-of-use, or TOU, rates are a form of "time-varying rates" designed to better reflect the actual cost of electricity based on the amount of supply and demand. Utilities have used TOU rates for businesses for many years, but they're becoming an increasingly common way to charge homeowners. Under TOU rates, your cost of electricity will vary from hour to hour, day to day, and season to season. With a battery, you can use your stored energy to avoid pulling electricity from the grid when it costs the most. 

Demand charges are also common for businesses and are becoming more common for homeowners. With demand charges, your utility company tracks your maximum energy pull from the grid during any given hour (or even fifteen-minute period) per month and charges you based on that maximum demand for the whole month. With a battery, you can lower your peak demand from the grid, driving significant bill savings. 

4. Are there local incentive programs available to you?

Some states offer incentives that will either cover a significant portion of your upfront battery costs or pay you to access electricity stored in your battery when the grid is stressed. We provide more details in the incentives section below, but if you have access to these types of programs, you could break even on your battery investment in under a year or in just a few years, depending on the type of incentive.

According to our latest Solar & Storage Marketplace Report, the median battery cost on EnergySage is $1,339/kWh of stored energy. This means that a 10 kWh battery will likely cost over $13,000. This price tag is high, but if you've determined that a battery is right for you based on your answers to the questions we outlined above, it will pay off over time. 

For example, if you're a California homeowner looking to go solar, your utility will put you on a particular TOU rate plan, and you won't have access to net metering, making you a great fit for a home battery. By installing a solar-plus-storage system instead of a solar-only system in California, you could save $21,600 to $43,900 more over 20 years and, despite higher upfront costs, break even on your investment 1-2 years sooner.

Keep in mind, if you live somewhere with net metering and a flat, non-time varying electricity rate, the only financial savings from installing energy storage come from avoiding outages or receiving any available state incentives. In those instances, you won't see any more bill savings from adding a battery to your solar panel system. 

Learn more about how much batteries cost.

If you want to install a home battery but are overwhelmed by the cost, don't worry: Plenty of incentives are available that will significantly lower the price. Depending on where you live, you could break even on your storage investment in less than a year! Here are some of the top battery incentives that will either reduce your upfront cost or increase your long-term savings:

Federal tax credit

The federal investment tax credit (ITC) is today's best battery incentive. Unlike a tax deduction (which reduces your taxable income), the ITC allows you to apply 30% of your battery system's upfront cost as a credit toward your federal tax bill. If you've already paid your taxes during the year, you can even receive the ITC as a refund, as long as it doesn't exceed your total tax liability. If it does exceed your tax liability, the remaining credit will roll over to the following year.

Before 2023, your battery needed to be paired with solar and be powered by solar at least 75% of the time for five years to qualify for the ITC. Now, under the Inflation Reduction Act, your battery system just needs to be over 3 kWh in size to qualify–it no longer has to be paired with solar.

Rebates

Some states and utility companies will pay you upfront rebates just to install a battery connected to the grid. For example, California's Self-Generation Incentive Program (SGIP) provides an upfront rebate based on the capacity of your battery on a dollar-per-kilowatt-hour ($/kWh) basis. The value depends on your income level and if you live in a high-fire threat district and could cover the full cost of your battery in some cases. 

Bring your own battery programs

Under bring your own battery (BYOB) programs, you provide your utility access to your battery's stored energy when electricity demand is high and the grid is stressed. You earn money on a dollar-per-kilowatt ($/kW) basis for the power your utility pulls from your battery during these "events."  

For example, battery owners in Massachusetts can participate in the state's ConnectedSolutions program, which provides a $275/kW incentive per event. In this program, you'll earn about $1,375 each year with a typical home battery, which, on its own, could pay for your system in under ten years. 

These types of programs often limit the battery inverter equipment you can select, so make sure to check the list of approved brands before installing your battery system. 

Virtual power plants

A solar-plus-storage system at your home is essentially a mini power plant. When you aggregate enough of these home systems, they become one "virtual" power plant (VPP), which can offset the electricity your utility company needs to generate, providing more grid resiliency and helping avoid significant infrastructure investments. 

If you participate in a VPP, you can earn money by allowing your utility to access your battery when the grid is stressed (similar to BYOB programs) or by simply using electricity from your battery instead of pulling from the grid during these times. Some VPPs offer a one-time payment for participation, while others will pay you on a $/kWh basis, so the more energy you contribute, the more you earn.

Participation in a VPP is often limited by the equipment you select and your utility company. Some battery and installation companies, like Tesla and SunPower, have partnered with specific utility companies so you can easily enroll in available VPPs.

Your eligibility for many of these battery incentives depends on how you pay for your battery. If you finance it with a lease, you'll miss out on some of the best incentives available, including the ITC and state rebates. Here are the three main ways to pay for your battery system: 

1. Cash: Paying for your battery system with cash is the best way to maximize your long-term savings, but many homeowners don't have the money required to purchase their battery system upfront, especially if it's paired with solar.

2. Loan: Many people choose to finance their battery systems with a loan: You'll still qualify for incentives, and you could start saving on day one if your monthly loan payments are less than your previous electric bills. If you're buying a new solar-plus-storage system, adding the price of a battery to your solar loan will increase your monthly bills slightly.

3. Lease: It may be challenging to find a lease for a standalone battery system, but adding a battery to your solar lease is relatively easy. However, with a lease, you won't own your system, so you won't qualify for some of the best solar incentives, as explained above. That said, if you're worried about controlling your battery to optimize savings under complex utility rates or reduced net metering, financing a battery with a lease is a good way to lock in your monthly payments without needing to make battery dispatch decisions on your own.

Learn more about how to pay for your battery system.

Batteries aren't the only form of home energy storage. If you've experienced a power outage in the past, you may have already invested in a generator. There are two primary reasons homeowners have historically opted for backup generators over batteries: They cost less upfront than home backup batteries, and they're easier to find and set up on your own—with some, you may not need any help from an electrician.

However, home backup batteries are becoming an increasingly popular choice over home generators, offering many of the same backup power functions as conventional generators but without the need for refueling. While they're more expensive upfront and require an electrician to install, when paired with solar panels, you can "refuel" them for free with the sun's energy. They're also much quieter than generators and don't come with emissions-related health concerns. 

Home batteries vs. generators

The best battery for your neighbor may not be the best battery for you, but some key factors can help you differentiate between the various brands and models. Here are some questions to answer when selecting the right battery for your home:

What's the battery chemistry?

Your battery's chemistry refers to the primary compound used to store energy. Today, most home batteries use lithium-ion chemistries due to their high power density, though you may still find portable or car lead-acid batteries. Three types of lithium-ion battery chemistries are popular in home batteries:

1. Nickel manganese cobalt oxide (NMC): NMC is today's most common home battery chemistry. Most homeowners choose NMC batteries for their relatively low price point and high energy density. However, they tend to have shorter lifespans and are less stable than other lithium batteries, making them slightly more prone to safety issues.  

2. Lithium iron phosphate (LFP): LFP batteries are quickly gaining on NMC batteries in popularity due to their relatively long lifespans, stability, and moderate price point. However, they often have lower energy densities than NMC batteries and tend to cost more.

3. Lithium titanate (LTO): LTO batteries are new to the home battery market. They cost more upfront than NMC and LFP batteries and have lower energy densities but offer the longest lifespans, fastest charge times, and the highest level of safety because they're not flammable.

Types of battery chemistries compared

Do you already have solar?

Batteries can be either AC- or DC-coupled when paired with solar, and some brands, like LG Chem, offer both solutions for their battery models. Here's how each type of system works:

• AC-coupled: If you already have a solar installation, in most cases, you'll need to choose an AC-coupled battery. With an AC-coupled solar-plus-storage system, your solar panels produce DC electricity, which your solar inverter converts to usable AC electricity. Then, your storage inverter converts the electricity you don't use back to DC electricity for storage in your battery. When you want to pull electricity from your battery, it's converted back to AC electricity. If you are pairing storage with a solar panel system that uses microinverters, you will have to install an AC-coupled solution because the microinverters change the DC to AC electricity right at each individual solar panel.

• DC-coupled: DC-coupled batteries provide more efficiency if you don't already have solar and are looking to install a solar-plus-storage system or a storage-only system. With a DC-coupled solar-plus-storage system, your solar panels produce DC electricity, which flows directly through your battery. Your inverter then converts any electricity you don't store one time so you can use it or send it to the grid. You may not be able to participate in some battery incentive programs with DC-coupled systems because your utility can't control the flow of electricity in and out of the battery.

AC- vs. DC-coupled batteries

Does the battery come with an inverter?

Like solar panels, batteries need an inverter to convert their stored DC electricity into usable AC electricity. Different types of inverters exist, depending on whether your battery system is AC- or DC-coupled. DC-coupled batteries often come with an integrated hybrid inverter for both solar and storage. AC-coupled batteries sometimes come with an integrated storage inverter, which only works with storage, meaning you'll need a separate solar inverter. Some batteries don't come with an inverter, so you must pair it with a separate, third-party inverter. 

You may be able to save on equipment costs with a hybrid inverter, but you could have higher installation costs if retrofitting to an existing solar system, and you could miss out on some incentives, as we previously described. 

How much storage capacity and power do you need?

There are two ways to measure the output you'll get from your battery: usable capacity and power rating. Usable capacity is measured in kWh and describes the maximum amount of electricity your battery can store on a full charge. The higher the usable capacity, the longer your battery's runtime. When comparing the usable capacity of different batteries, you'll also want to consider how many batteries you can stack in parallel; even if the usable capacity of one battery is low, if you can connect multiple batteries to one inverter, it may allow you to customize your system to meet your energy needs better.

Your battery will come with two power ratings, both measured in kW. Its peak power rating measures the amount of power your battery can output in a short period. It's important to have a battery with a high peak power rating if you need it to run appliances that require a lot of energy to start, like an air conditioner or a sump pump. Your battery's continuous power rating measures the amount of power your battery can output consistently. The higher its continuous power rating, the more appliances you can run at once.

Ultimately, the amount of capacity and battery backup power you need depends on how much of your house you plan to power with your battery—and for how long. 

How well does the battery perform?

Two primary metrics differentiate batteries in terms of performance. Depth of discharge (DoD) indicates the percentage of the battery that can be discharged relative to its overall capacity. In other words, it's the amount of your battery's capacity you can use in one cycle for optimal battery performance: The higher the DoD, the more you'll get out of your battery.

Roundtrip efficiency measures the electrical losses involved with charging and discharging a battery. Batteries with higher roundtrip efficiencies better convert incoming electricity into stored electricity and back to usable electricity; they're considered higher-performance batteries.

How long will the battery last?

Every time you charge and discharge your battery, it slightly reduces its ability to hold a full charge. A battery system is a big investment, so you'll want to ensure it lasts. The best way to feel confident that your battery will continue working efficiently is to choose one with a strong warranty. Battery warranties include many different components and clauses, which all impact the assurance you can feel when choosing a long-lasting battery. 

Your battery's warranty period is measured in years and covers the integrity and output of your system–typically, battery companies offer 10-year warranties. Most battery warranties also include an end-of-warranty capacity guarantee, which states that by the end of the warranty period, the battery will still maintain a certain percentage of its original usable capacity. Batteries also often come with a cycles clause (a specified number of times you can drain and charge your battery under warranty) and/or a throughput clause (the total amount of energy the manufacturer expects the battery to deliver throughout its lifetime). Similar to how many car warranties come with a time and/or mileage component (i.e., ten years, 100,000 miles), if you hit your warranted cycle life or throughput before your battery reaches the end of its warranty period, it could end your warranty term. 

You'll also want to look at other warranty information, like if labor and shipping costs are covered for repairs and replacements; batteries are considered hazardous waste, which means that these costs can be extremely high in some cases if you need to send the battery back to the manufacturer for diagnostics.

Is the battery compatible with energy management systems?

Energy or load management systems enable you to both monitor and control your energy consumption, typically at the circuit level. In most cases, if you're installing a battery, you'll need to install a critical load panel, which protects your appliances and battery from unintended electrical failures and enables you to power only your most essential devices during power outages.

Energy management systems replace the need for a critical load panel by providing real-time flexibility, allowing you to turn circuits on and off remotely. They can replace your main electrical panel, serve as a sub-electrical panel (similar to a critical loan panel), or be installed along individual circuit lines for a more modular approach. Most importantly, these systems allow you to get more out of your battery during power outages by only powering the most important loads at a given time. One of the most prominent energy management system brands, Span, claims that their smart home panel provides 40% longer backup than battery-only systems. 

Some battery companies are now manufacturing their own energy management systems, while others are compatible with third-party systems like Span and Lumin. Not all batteries are compatible with all energy management systems, so make sure to pick a battery compatible with the energy management system you prefer. 

How much does the battery cost?

You'll want to get the most bang for your buck when purchasing a home battery. Battery cost comes down to two key factors: the equipment and installation time. Some batteries are more expensive due to factors like their chemistry or supply chain strength, while others may be bulky and large and, therefore, more difficult (and expensive) to install. 

Thousands of homeowners request battery quotes through our Marketplace every year, providing us with unparalleled insight into the cost of different battery brands. Based on our latest Solar & Storage Marketplace Report, there's an extensive range in battery prices: HomeGrid offers the lowest cost batteries at $480/kWh, likely in large part due to their flexible configuration, which makes them easy to transport and quickly install, while Sonnen offers the highest cost batteries at $1,570/kWh, likely due to their extremely strong warranty. The most quoted battery company on the EnergySage Marketplace is Enphase, which surprisingly is the second most expensive battery brand at $1,490/kWh. 

What are the best home batteries?

While there are many great battery companies, a few stand out above the rest. Depending on what you're looking for in a battery system, HomeGrid, Villara Energy Systems, Sonnen, and SolarEdge offer some of the best solar batteries today:

Best backup batteries compared

If you're ready to install a home battery system, we're here to help. Here's how to get started without feeling overwhelmed:

1. Get quotes

The best way to get a great deal on your battery system is to compare quotes based on factors like cost, equipment, and installer reputation. If you're looking for a solar-plus-storage system, the free EnergySage Marketplace makes this easy by gathering up to seven custom quotes for you from our network of pre-screened installers. The best part? On average, shoppers who receive quotes on EnergySage pay 20% less for their systems than those who don't.

2. Choose an installer

Now that you have multiple quotes to compare, it's time to choose the best installer for you. EnergySage's mission is to help you choose with confidence. Our team of expert Energy Advisors can walk you through your quotes (even if you didn't get them through EnergySage) and answer all your questions so you can pick the system that meets your needs at the right price. Once you've selected an installer, you'll need to sign a contract – make sure to first review it thoroughly for details on costs, incentives, equipment, cancellation terms, and clauses.

3. Schedule a site visit

After signing your contract, you'll need to schedule a site visit with your installer as a final check to ensure your battery system is suitable for your home. They'll check your electrical panel to decide if it needs to be upgraded or if you should add a critical loads panel, as well as your roof if you're installing a solar-plus-storage system. An installer can conduct a site visit either in person or virtually.

4. Decide how to pay for your system

Your installer has determined your house is battery-ready and is prepared to proceed with your installation. Now, you'll need to decide how to pay for your system. As discussed above, there are three main ways to pay for solar: upfront with cash, with a loan, or with a lease. Each option has pros and cons, so you must decide which works best for you now and which will pay off the most long-term. Generally, we recommend paying with cash for the best long-term savings or a loan if you want to start saving immediately.

5. Prepare for your installation

At this point, you've done all the hard work on your end. Now it's time to watch it pay off with a brand-new battery system! Before installation day, your installer will begin submitting the paperwork required for installation and any available incentives. Battery installations typically require at least two electricians and can take anywhere from a few hours to over a day, depending on the battery you choose and the amount of electrical work required.

How long does a backup battery last?

Depending on its usable capacity and the energy consumption of the appliances you're powering, your battery could last anywhere from a few hours to a few days. If it's paired with solar and the sun is shining, you can continually recharge your battery with the sun's energy, making it last significantly longer during a prolonged grid outage. 

How many batteries do I need?

The number of batteries you need depends on your battery size, the amount of energy you consume at once, and the duration you want to use your battery. For example, a laptop may only use about 50 watts of electricity, while a level 2 EV charger uses approximately 7,200 watts. You'll probably need at least 30 kWh of backup capacity to go entirely off-grid, which could be one big battery bank or multiple smaller batteries stacked together.

Is it worth installing a home battery?

If you frequently experience power outages, have or want to go solar and live in an area without net metering, or your utility company charges you for more electricity during certain times of the day, it's probably worth it to install a home battery.

Are you looking to install a solar-plus-storage system at your home? Get free quotes through the EnergySage Marketplace, and compare quotes from only vetted, reputable installers. If you have any questions along the way, we'll provide you with tools and resources and access to a free Energy Advisor to walk you through the process so you can choose your system with confidence.