United States

How the US market works

There is no single American electricity market. Electricity rules are set mostly by state regulators (public utility commissions) and by local utilities, so the rate you pay, what you get for exports and what a battery can earn differ by state and by utility. The Database of State Incentives for Renewables & Efficiency (DSIRE) counted 34 states plus the District of Columbia and some territories with mandatory net metering rules in November 2023, and some states had moved to other compensation rules (DSIRE net metering summary, November 2023). That count is three years old and we did not re-check it.

Texas is an example of how different the market can be. It has no statewide net metering policy, and retail customers choose a competitive retail electric provider (Solar United Neighbors on Texas). The practical lesson is to read your own utility's rate sheet and ask your installer for savings figures based on it, not on a national average.

The federal tax credit after 2025

The residential clean energy credit (Section 25D) paid 30% of the cost of qualifying property, including battery storage of at least 3 kWh. The IRS page, last reviewed on 4 July 2026, says: "The credit is not available for any property placed in service after 31 December 2025" (IRS: Residential Clean Energy Credit). SEIA's summary of the 2025 law describes the same end date for homeowners (SEIA: clean energy provisions in the One Big Beautiful Bill). So a battery you buy and have operating in 2026 or later does not qualify for the homeowner credit.

Two details about timing matter if you are looking back. The credit follows the year the system was completed and placed in service, not the year you paid, and the Hawaii State Energy Office notes that simply buying equipment and storing it did not qualify (Hawaii State Energy Office: Section 25D FAQ). The IRS also says the credit is nonrefundable and that an unused amount can be carried forward to later years (IRS). If you installed a battery in 2025, ask a tax adviser what you can still carry forward.

What remains is a business credit that a company can claim on energy storage it owns. Section 48E (the clean electricity investment credit) kept energy storage, and SEIA reports that the placed-in-service deadline in the new law does not apply to storage (SEIA). Two industry write-ups say the company that owns a leased or third-party-owned system claims the credit and may pass the saving on through lower payments, and the customer does not claim it (Solar.com; EnergySage). We could not read the statute itself, and these sources do not agree on every detail for batteries, so ask the company for the lease terms in writing and for the credit assumptions they used.

Starting with projects whose construction began after 31 December 2025, storage claiming the business credits must also meet the "prohibited foreign entity" and material assistance rules. Treasury and the IRS issued Notice 2026-15 on 12 February 2026 on how to calculate the material assistance cost ratio, and it includes special rules for storage under one megawatt (Holland & Knight on the Treasury guidance). That is a rule for the credit claimant, but it can affect which equipment a leasing company is willing to offer. We did not check how it applies to a specific product.

Do not rely on a state or utility to replace the federal credit. Some states have their own tax credits or sales-tax exemptions for batteries, and we did not verify them state by state. Check your state energy office and DSIRE before assuming there is or is not one.

Net metering and net billing

Net metering credits the electricity you send to the grid against what you draw. Net billing pays a lower, separate rate for exports. The difference decides how much a battery helps, because under net billing it is usually worth more to store midday solar and use it in the evening than to export it.

California is the best-known example. The California Public Utilities Commission (CPUC) adopted the Net Billing Tariff, often called NEM 3.0, in December 2022 (D.22-12-056), and it applies to customers who submit an interconnection application on or after 15 April 2023. Customers who applied under net metering by 14 April 2023 are grandfathered (CPUC: Net Billing Tariff; CPUC: NEM revisit proceeding). One industry source says exports are credited at hourly "avoided cost" rates that average around a quarter of retail rates (EnergySage on NEM 3.0). We did not verify that average against the CPUC decision, and the rates change by hour and month, so use your utility's current export schedule.

Hawaii has moved away from simple net metering for new solar. Hawaiian Electric's Smart Renewable Energy programmes, launched 1 April 2024, replace its earlier rooftop solar programmes except Net Energy Metering, and customers already on NEM and NEM Plus did not have to change (Hawaiian Electric: new framework).

In Arizona, APS says its solar export rate is reviewed each year and approved by the Arizona Corporation Commission, and older buyback rates last 20 years from the date a system was connected, after which the customer moves to the current rate (APS: solar transition). We did not confirm the current export rate or how it compares with other Arizona utilities.

Texas has no statewide net metering policy. A homeowner is credited for exports only if the retail electric provider offers a solar buyback plan, and each provider sets its own terms (Solar United Neighbors). Latitude Media reported in February 2026 that providers have become less willing to offer one-for-one buybacks (Latitude Media). We did not review other states, so check your own utility's current export rules.

Time-of-use rates and what a battery can save

A battery saves money by letting you use electricity at hours when it is expensive that you bought, or generated, when it was cheap. That only works if your tariff has a price difference to use. Many US utilities charge a flat rate, some offer time-of-use (TOU) plans, and some add a demand charge based on your highest power draw. APS, for example, lists TOU plans with peak hours of 4 pm to 7 pm on weekdays, one of them with a demand charge, and it defaults customers who do not choose to the 4 pm to 7 pm TOU plan (APS: solar transition).

A 2019 Brattle Group survey found that 14% of US utilities offered a residential TOU rate and that about 1.7% of residential customers were enrolled nationally (Brattle: survey of residential TOU rates, 2019). That survey is old, so treat it as a sign that many homes are not on a rate that rewards a battery, not as a current count.

Real savings are capped by how much power your home uses in the expensive hours, and a battery cannot save more than you use. Ask your installer for a model built on your own utility bill and your rate plan, with the rate and the export credit stated. We explain the arithmetic in how a home battery saves money and dynamic energy contracts and how to actually save.

State and utility programmes

Programmes that pay for a battery come from states and utilities and change often. Below is only what we could confirm from the programme owners, and none of it replaces reading the current rules.

California, SGIP. The CPUC's Self-Generation Incentive Program funds distributed energy systems on the customer's side of the meter. Its Residential Solar and Storage Equity budget is for low-income residential customers, CPUC authorised $280 million for it, and reservations began on 2 June 2025 (CPUC: SGIP). The page lists other budgets too, with different eligibility and funding years. We did not confirm whether any of them is open to new general-market residential applicants today, so check the programme administrator's site.

Hawaii, Hawaiian Electric. The Battery Bonus programme closed to new participants on 1 July 2024 (Hawaiian Electric: Battery Bonus). Its replacement, Bring Your Own Device Plus, pays $400 per kW committed once, with an extra $400 per kW for qualifying low-to-moderate income customers, and a monthly credit for energy the battery discharges to the grid. It requires a battery that discharges in a two-hour window every day and is paired with renewable generation. The page describes five years agreements but also refers to a 10-year commitment, so confirm the term before signing (Hawaiian Electric: BYOD Plus).

Massachusetts, ConnectedSolutions. Customers of Cape Light Compact, Eversource and National Grid with an eligible battery can earn $275 per kW for the battery's average contribution during summer events. Events run up to 60 events a summer, each lasting at most three hours, on 1 June to 30 September, 3 pm to 8 pm on non-holiday weekdays, and enrolment goes through the battery manufacturer. Batteries are also eligible for up to $25,000 through the 0% HEAT Loan (Mass Save: ConnectedSolutions batteries).

Texas, ERCOT. There is no statewide battery rebate that we could confirm. The Public Utility Commission of Texas had ERCOT develop an Aggregated Distributed Energy Resource pilot from June 2022, which lets small consumer-owned devices act together as one resource in the wholesale market. In August 2023 it was capped at 80 MW (American Public Power Association). We did not check its current size or status. In 2026, companies were also offering battery programmes in which the company owns the battery and the customer pays a monthly fee (Latitude Media); read the contract before joining, because you give up control of the battery.

Programmes that pay you to let the utility use your battery have rules about when it must discharge and for how long. That can conflict with keeping the battery full for backup, so ask how the programme treats a storm warning. We cover this trade-off for other markets in how to choose a home battery.

What it costs and how big

We could not confirm a current national installed price for a home battery from a government or laboratory source, so we do not give one. Lawrence Berkeley National Laboratory's 2026 data update reports a price difference: for cash-purchase systems, median prices were $2.1 per watt higher for paired solar-plus-storage than for stand-alone solar, and the paired-system data is about 80% California (LBNL: Distributed Solar & Storage, 2026 data update). That is a gap per watt of solar, not the price of a battery.

The same report shows what buyers are choosing. Batteries were installed with 37% of new US residential solar systems in 2025, up from 25% in 2024, with Hawaii and California highest. The median battery was 13.5 kWh, about the size of a single large wall-mounted unit (LBNL). With the homeowner credit gone, ask every installer for a written itemised price with the battery, inverter, labour, permits and the utility interconnection fee shown separately. Our guide on what size home battery you need explains how to size one.

Permits and connecting to the grid

A permanently installed battery normally needs a building or electrical permit from your local authority, called the authority having jurisdiction (AHJ), and an inspection. If it can connect to the grid, your utility also has to approve it. Both steps usually fall to the installer, but the permit is issued in your name for your home, so ask who applies and who pays any fees.

The Center for Sustainable Energy's guide for permitting departments says home battery permitting spans residential, electrical, fire and energy-efficiency codes, treats UL 9540-listed equipment as the baseline, and describes digital tools that can issue permits in real time for eligible standard systems (Center for Sustainable Energy: permitting guide). Whether your authority offers such a process varies. We did not find a national rule on how long a utility may take to approve an interconnection, and the process and fees differ by utility, so ask the utility or installer for the current timeline.

The electrical rules for stationary batteries are in Article 706 of the National Electrical Code (NEC). One summary says it requires listed equipment (UL 9540 is the main listing standard), a readily accessible disconnect, and an emergency shutdown for one- and two-family homes, with a 100 V DC limit in dwellings (Battery Design: NEC Article 706 summary). That summary is secondary and covers the 2026 edition. States and cities adopt NEC editions on their own schedule and often add local amendments, so ask your installer which edition and amendments apply. We did not read the code text.

Safety, codes and where a battery can go

Residential batteries are tested and listed to UL 9540, the standard for energy storage systems, and UL 9540A is the test method for how a fire spreads from cell to cell (IAEI Magazine: ESS installed at dwellings). UL says that standard limits an individual residential system to 20 kWh (UL: marking energy storage systems for residential use).

Where a battery can go depends on the code. As summarised by UL from NFPA 855 chapter 15 and the 2021 International Residential Code (section R328), units must be listed and installed to the manufacturer's instructions, each unit is limited to 20 kWh, and the total is limited to 40 kWh in utility closets, basements and storage or utility spaces, or 80 kWh in attached or detached garages, on exterior walls or outdoors. Units must be at least 3 feet apart unless a UL 9540A test report supports less. Larger ratings are allowed if a test report documents them (UL: separation and maximum quantities for residential ESS).

The same article says the IRC does not allow a battery in the habitable space of a dwelling, with limited exceptions for systems that pass the stricter cell-level tests and carry a habitable-space marking. The permitted locations include detached garages, accessory structures, attached garages separated from the living space, and exterior walls, and an exterior unit should be at least 3 feet from doors or windows that open into the dwelling. The author also warns that some manufacturers claim habitable-space compliance, so the AHJ may ask to see the actual test report (IAEI Magazine). Local adoptions and amendments differ, so treat these as the model-code position and check your own.

Tell your home insurer and mortgage lender before installation and ask, in writing, whether the battery's location or type affects your cover. Keep the permit, inspection sign-off and utility approval with your home documents. Our guides on fire risk and chemistry and installing a battery outside cover the practical side. We did not review state-specific installer licensing, so check what your state requires of the company doing the work.

Backup power in outages, hurricanes and wildfires

The strongest reason many US households buy a battery is backup. The Energy Information Administration reports that customers averaged 11 hours without electricity in 2024, of which nearly nine hours were caused by major events such as hurricanes. Outages not caused by major events routinely average about two hours a year, and major-event outages averaged nearly four hours a year from 2014 to 2023 (EIA: Today in Energy, 1 December 2025). Your own outage history matters more than the national average, so ask your utility for your feeder's record.

In California, utilities sometimes switch off power on purpose in high wildfire risk, called a Public Safety Power Shutoff (PSPS). The CPUC describes it as a wildfire mitigation strategy of last resort (CPUC: PSPS guidelines, June 2021). These events can last longer than a few hours, so check how many hours of your essential loads a battery would cover.

Backup is a design choice, not a given. A grid-connected battery normally shuts down in an outage unless the system is designed to separate from the grid, so ask the installer in writing whether it provides backup, for which circuits (a few essential circuits or the whole home), at what power, and for how long. A battery that serves the whole home needs a higher power rating than one for a fridge, lights and internet. If a utility programme can discharge your battery before a storm, ask whether you can keep a reserve. Our guide on how long a home battery lasts in a power cut shows how to work out the hours.

A battery does not replace common sense in a long outage. The Consumer Product Safety Commission says portable generators are one of the leading causes of post-storm carbon monoxide deaths and should only be used outdoors, at least 20 feet from homes and buildings, never in a garage, basement or other enclosed space (CPSC, 27 May 2026). The agency also advises battery-operated or battery-backup carbon monoxide and smoke alarms.

Portable power stations versus a home battery

In the US many people search for a portable power station, because of storms, outages and camping. It is a different product from a home battery. A portable power station is a movable unit with built-in outlets that you carry and plug appliances into. UL's guidance for portable power packs (UL 2743) says they are intended for use when normal grid power is not available, such as camping or emergency situations, and that a battery energy storage system for a home is certified to UL 9540 (UL Question Corner via IAEI Magazine). It also notes that combining separately certified products on site does not create a listed system.

In practice the differences are these. A portable unit is not wired into the house, so it powers only what you plug into it, and the wiring and the main panel stay as they are. It has no connection to your utility, so it cannot earn from time-of-use rates, join a utility programme or follow your solar output, unless you charge it from panels yourself. Its capacity and power are usually smaller than an installed battery's, so it suits a fridge, lights and phones better than an electric range or air conditioner. It is the lower-effort choice for short outages and travel, but check local rules before using one in an apartment or near living space.

An installed home battery goes through a permit, an inspection and, if it can export, utility approval, as described above. It can run on a schedule without you, store solar, and support whole-home or essential-circuit backup. We do not recommend brands here and found no source on which portable units suit which loads, so read the manufacturer's rated output and the listing mark on the label. Never connect a portable unit to a house circuit by a homemade cable or by backfeeding an outlet, because it can energise the grid side and endanger utility workers. Our comparison of plug-in and installed home batteries explains the difference in practice.

Choosing an installer

Because the homeowner tax credit has ended, the quote now determines most of the economics. Ask for the rate plan and the export credit they assumed, the equipment model and its UL 9540 listing, the backup scope, the permit and utility steps they will handle, and the warranty in writing (capacity retained after a set number of years or a total energy throughput, and who services it). Get at least two quotes on the same assumptions. If the quote is a lease or a power purchase agreement, ask who owns the battery, what happens if you sell the house, and what the monthly payment is when the battery is not used for your own backup.

Our guide on how to choose a home battery lists more questions to ask. We have not reviewed state licensing rules, so check with your state contractor board that the company is licensed to do electrical work where you live.

Outside the United States

Rules, tariffs and incentives for home batteries differ from country to country, so do not apply the figures on this page to a home elsewhere. We are adding guides for other countries to this section.

Common questions about United States

Related guides

Compare how other markets handle the same questions, or size your own system first:

• Home batteries in Canada
• Home batteries in Mexico
• Home batteries in Australia
• Home batteries in United Kingdom
• Home battery capacity guides (5 kWh to 30 kWh+)
• Home battery brand guides
• All country guides