Solar battery incentives and rebates in 2026

If you’re considering energy storage for your home, a variety of incentives and rebates can help lower installation costs and boost your return on investment. State rebates, utility demand response programs, and flexible financing options are making home batteries increasingly accessible for backup power, energy independence, and lower electricity bills. By combining the right incentives, you could reduce your battery costs by thousands of dollars while also earning ongoing payments for supporting grid stability. 

We’ll walk you through the most valuable storage incentives currently available and explain how different payment approaches can work for your situation.

This article is for informational purposes only and should not be considered tax advice. Please consult with a qualified tax professional about your specific situation.

Many states offer incentives for energy storage that can reduce your installation costs by thousands of dollars. These programs typically take one of two forms: Upfront rebates that provide direct cash payments after installation, or performance-based incentives that pay you over time for making your battery available to support the grid.

Here are some notable state-level battery storage incentives currently available:

California

Perhaps the best-known state-level storage incentive in the U.S. is California's Self-Generation Incentive Program (SGIP), which provides a dollar per kilowatt ($/kW) rebate for the energy storage installed. While the rebate level steps down as more homes and businesses add storage in California, the state updated SGIP to provide more funding and higher levels of incentives for customers in high fire threat districts and for low-income customers to help provide emergency backup power to those that need it most.

Connecticut

Eversource and United Illuminating customers can benefit from the Energy Storage Solutions program in Connecticut. Residential customers earn up to $16,000 per installation, plus more incentives as you send energy to the electric grid. Businesses receive a 50% upfront incentive when connected to the grid and used to help reduce grid stress during the summer. And, businesses can earn performance-based incentives twice a year for 10 years, depending on how much power the battery adds to the grid during peak periods.

Massachusetts

Massachusetts finalized new rules for its Solar Massachusetts Renewable Target (SMART) program last year to help stabilize energy markets and keep solar projects viable even as federal incentives concluded. The revamped SMART program—which compensates homeowners and businesses for the solar electricity they produce—now includes a built-in mechanism to respond to market shifts, with compensation rates reviewed and reset annually rather than using the old declining block structure.

For systems paired with solar, SMART 3.0 can include an energy storage adder, which can increase the compensation for adding battery storage if you qualify. Homeowners and businesses can also participate in the Mass Save Connected Solutions, which provides additional financial incentives and zero‑percent interest financing for batteries that support the grid during peak demand while keeping backup power available. This combination helps reduce the cost of battery installation and supports overall grid stability.

New York

New York continues to offer residential energy storage incentives through NYSERDA’s Residential and Retail Energy Storage Incentive Program. Homeowners statewide can receive fixed-rate rebates for new grid-connected battery systems up to 25 kWh, available on a first-come, first-served basis through participating contractors. 

Incentives are distributed in funding blocks, which vary by geographic and utility region. Each block has a set amount of funding and a defined incentive rate, and once a block is fully reserved, it closes to new applicants. As new blocks open or funds are reallocated, homeowners in different regions may see different rebate levels. To ensure access to the latest available incentives, check the NYSERDA Residential Incentive Dashboard for current block status and funding availability.

As an example of how solar battery incentives can influence the cost you pay, let's take a Tesla Powerwall installation in California. You can read our article about the SGIP battery incentive for more in-depth information, but here's how the costs play out once everything is all said and done:

Especially in a state like California, rebates and incentives can save you significant money on a solar-plus-storage installation. As solar batteries only become more popular, it's likely that incentives like SGIP will continue to receive funding and will also likely pop up in other states.

Beyond states taking steps to encourage greater adoption of energy storage technologies, some utilities are now also offering incentives to home and business owners who install storage. 

Most battery storage incentives revolve around virtual power plants (VPPs). When homeowners install batteries (often paired with solar), utilities can link these distributed systems into a coordinated network that can be dispatched to the grid during times of high demand, almost like another power plant. In return for allowing the utility to draw on stored energy during periods of grid stress, participants are compensated through ongoing payments or bill credits. Participation is typically voluntary and governed by program rules that define when and how a battery can be dispatched.

The ConnectedSolutions program

Utility customers of Eversource or National Grid in Connecticut, Massachusetts, New Hampshire, and Rhode Island can participate in the ConnectedSolutions program, a demand response-style incentive that pays you an annual incentive for access to the stored energy in your battery. 

The incentive structure is designed with two key things in mind: First, it's designed to not pull from your battery if a major storm event is on its way so that you'll always have backup power when you need it; and, second, the incentive is designed to cover the cost of your battery in five years, meaning the incentive will ultimately pay you to have a battery over the ten years of the incentive program.

Green Mountain Power storage programs

While Vermont doesn't have any state-specific storage incentives, its primary utility–Green Mountain Power–has been a pioneer for residential energy storage in the U.S. In fact, Green Mountain Power offers a few different programs for energy storage: A bring-your-own-device program that provides a rebate for whatever battery you want to install (and up to $10,500 rebate), as well as a battery lease program.

Even though federal tax credits for residential solar and battery storage were cut in 2025, homeowners can still benefit indirectly through solar leases and power purchase agreements (PPAs). Under third-party ownership (TPO) arrangements, a provider installs and owns the solar energy system, and the homeowner pays a monthly fee for the energy produced.

Because the provider retains ownership, they can claim the still-available federal commercial solar and storage tax credits, which can reduce installation costs by 30% to 50% or more. These savings are often passed along to the homeowner in the form of lower monthly payments.

Pre-paid leases or PPAs take this a step further by allowing homeowners to pay a larger upfront sum in exchange for eventual ownership (typically after six years). This can be an appealing option for homeowners who want additional solar savings and ownership.

By leveraging TPO agreements, homeowners can still participate in federal incentives indirectly while enjoying predictable energy costs and, in some cases, eventual ownership of the solar panel system.