As more homeowners invest in solar photovoltaic (PV) panels, many are pairing their PV systems with on-site battery storage. This trend is fueled by a desire for backup power during grid outages, grid independence, lower bills, and higher carbon offsets.
This guide covers key solar energy storage solutions, including costs, installation, benefits, and drawbacks. Use this free resource to determine if on-site batteries are the right option for you and your energy and savings goals.
Why Does Solar Energy Need to Be Stored?
Storage adds significant costs, making it harder for some homeowners to finance a full PV system. So why invest in it at all?
Here are three compelling reasons.
1. Mismatch of Solar Production vs. Usage
Solar panels generate the most electricity at midday, but household energy use tends to be lower at that time. In the evening, when people return home and demand rises, solar production has already declined. This creates a gap between when energy is generated and when it is needed most. The duck curve illustrates this issue, showing sharp drops in midday grid demand but a steep rise in the evening. Without storage, excess solar power is often wasted or sold back to the grid at lower rates, limiting the financial benefits of going solar.
2. Reducing Grid Reliance & Increasing Outage Protection
Adding storage allows homeowners to use their solar energy when they need it most – not just when it’s generated. It also provides backup power during grid failures caused by storms, maintenance, or high demand. Even a small battery system can keep essential appliances running when the grid goes down, improving home resilience.
While stored energy won’t replace full-grid functionality in every case, it significantly reduces reliance on external power.
3. Reducing Fossil Fuel Dependence
Without storage, utilities often rely on gas- or coal-fired peaker plants to meet evening electricity demand. By making solar energy available after dark, battery storage reduces dependence on fossil fuels and supports a cleaner energy grid. Widespread solar-plus-storage adoption is a key component of the renewable transition, helping balance supply and demand without carbon-intensive backup generation.
Types of Solar Energy Storage Systems
Can solar energy be stored? Yes, in several ways. Battery storage is the most common for homes, while thermal, mechanical, and hydrogen-based systems play a role at larger scales.
Battery Storage Systems (Residential & Commercial)
Battery storage remains the dominant choice for homes and businesses, forming the backbone of how solar energy is stored. Lithium-ion and lithium iron phosphate batteries lead the market due to their higher efficiency, longer lifespan, and lower maintenance.
Other battery types include:
- Lead-acid batteries: an older and cheaper option with a shorter cycle life.
- Flow batteries: an emerging technology offering long-duration storage but not widely used in residential applications.
Among solar energy storage solutions, battery systems are popular because they can be sized for home backup power and are easier to integrate into existing PV systems.
Other Types of Solar Energy Storage Systems
How is solar energy stored using other technologies? Below are some of the most popular options:
- Thermal storage captures solar energy as heat, commonly using molten salt in concentrated solar power (CSP) plants or water for residential heating.
- Mechanical storage includes pumped hydropower and compressed air systems, both designed for large-scale energy storage.
- Hydrogen storage converts solar electricity into hydrogen via electrolysis, offering long-term storage potential but still maturing for residential use.
While these methods are less common for home use, they are proven solutions for large-scale energy storage and grid stability.
Residential Battery Storage Systems – a Closer Look
Homeowners considering battery storage must weigh several factors, from electricity rates to backup power needs. While storage increases the upfront cost of a PV system, it can offer long-term benefits like energy independence, resilience, and bill savings.
Benefits and Drawbacks of Residential Battery Storage Systems
Battery storage offers a powerful way to use more of your own solar power and stay connected when the grid goes down. The downside is cost, with many battery solutions approaching $20,000 – depending on capacity and brand. Batteries also degrade over time and need proper ventilation, adding further expense. While some utilities test aggregator programs that link home batteries to the grid, these remain limited.
For homeowners on time-of-use (TOU) billing – where electricity costs spike during peak hours – storing midday solar for evening use can lead to real savings. Plus, the federal Investment Tax Credit (ITC) covers up to 30% of PV-tied battery storage, helping offset the upfront price. Whether you need a battery often comes down to local net metering payouts, budget, and how often blackouts or peak-rate charges hit. If outages occur frequently or your rates climb after sunset, a battery becomes more valuable.
Comparing Common Types of Batteries
- Lithium Iron Phosphate (LFP): Known for its strong safety profile, resistance to high temperatures, and longer cycle life.
- Nickel Manganese Cobalt (NMC): Offers higher energy density, which may allow for smaller, more compact battery designs.
Among available solar energy storage solutions, these chemistries dominate the residential market due to their efficiency and reliability. However, many large-scale energy projects rely on alternative methods such as molten salt storage, pumped hydropower, or hydrogen fuel cells. These solutions suit utility or industrial environments due to their cost and scale, making them uncommon for single-family homes.
How Much Do Residential Battery Systems Cost?
The total price of a residential battery system, including design, labor, equipment, permitting, and commissions, typically falls between $12,000 and $20,000. According to 2024 data from SolarReviews, a Tesla Powerwall is $15,500 and a PanasonicEverVolt is about $18,000.
The ITC reduces the price of PV-connected battery storage by up to 30%, helping offset some of the expense. Local incentive programs like California’s SGIP(Self-Generation Incentive Program) can further lower costs. Since battery prices fluctuate, homeowners should check current rates before purchasing.
How Are Battery Systems Installed?
Installing a battery storage system involves three main steps: mounting the equipment, connecting the wiring, and commissioning the system.
First, installers mount the battery and any required components, such as an inverter on the wall or floor. Next, they connect the battery to the home’s electrical panel, integrating it with the solar system if applicable. In some cases, they add a backup load panel, but whole-home backup systems often connect directly without one.
Finally, the system goes through testing and activation, ensuring proper functionality. Installations can take anywhere from a few hours to two days, depending on system size, complexity, and whether upgrades like a new service panel are required.
How to Choose the Right Residential Battery Storage System
Several factors influence how to store solar energy, including system capacity, battery chemistry, and installation requirements. Homeowners should consider their energy consumption patterns, budget, and space availability before choosing a system. For instance, those needing backup power for essential devices during outages might prioritize larger capacities, while others looking to reduce energy bills might focus on systems optimized for time-of-use rates.
Assessing these needs helps in selecting the right solution tailored to your home’s unique requirements.
Factors Influencing Solar Battery Choice
Which battery system to choose depends on how much energy you need to store to power your appliances. Some homeowners only back up critical loads like lighting, refrigerators and medical devices, while others size systems to power the entire home. Budget, available incentives, and whether the goal is backup power or long-term cost savings also impact the choice.
Battery Capacity & Cycle Life
A battery's kilowatt-hour(kWh) rating determines how much energy it can store. Larger capacities can provide multi-day backup, while smaller systems cover essential loads. Warranties typically last 10 to 15 years, although regular maintenance and routine inspections can potentially extend the battery system's use full lifetime.
Compatibility & Installation
Not all batteries work with existing solar inverters. Some homes may need a hybrid inverter to integrate storage. Physical and geographical location both matter – batteries must berated for indoor or outdoor installation based on available space, climateconditions, and exposure to extreme temperatures.
Additional Considerations
Some battery systems include advanced monitoring features, though energy management software availability varies. Local building codes and contractor expertise influence installation, so homeowners should discuss regulatory requirements with their installer to ensure compliance.
The Future of Solar Energy Storage
Advancements in battery technology and declining costs are making solar energy storage more accessible. As research progresses, new breakthroughs will improve efficiency, affordability, and storage capacity, giving homeowners more flexibility in how they use stored energy.
Emerging Tech & Cost Trends
Lithium-ion battery prices fell by approximately 89% from 2010 to 2020 dropping from $1,100/kWh to $137/kWh and the downward trend continues as production scales and efficiency improves. Research is advancing on solid-state batteries, which promise higher energy density and improved safety compared to traditional lithium-ion cells.
Alternative solutions like compressed air and gravity-based storage systems are also being developed for grid-scale applications, offering new options for long-duration energy storage.
Potential Market Growth
Various countries across the E.U. are seeing rapid adoption in the residential sector. According to 2020data from SolarPower Europe, for example, over 60% of new residential solar PV systems in Germany now include battery storage. Looking ahead, studies predict batteries could provide up to a quarter of electricity storage needs in renewable-heavy markets, supporting grid stability as intermittent power sources (like solar and wind) accelerate.
Solar Storage Systems – A Wrap Up
Storing solar energy bridges gaps between production and consumption, provides backup power, and reduces grid reliance. For homeowners looking to maximize their savings and energy independence, battery storage remains the most practical option.
If you’re considering solar storage, look into total system costs, available incentives, and how installation might impact your home’s electrical setup. Prices vary based on location, installer, and battery type, while incentives depend on regional policies. A knowledgeable solar provider can help you weigh the long-term savings against the upfront investment.
