How to pay for home battery storage

Between rising electricity prices, a grid under increasing strain, and more frequent extreme weather events, home batteries are quickly shifting from “nice to have” to “seriously considering.” At the same time, battery prices have fallen over the past five years, making storage more accessible than ever.

Still, battery energy storage isn’t free. To unlock backup power during outages or optimize your electricity usage, you’ll need to invest in the system itself. When paired with a solar panel system, a typical home battery costs around $15,000 on EnergySage, though total costs vary depending on the size of your system and how much of your home you want to power.

When it comes to how to pay for home batteries, you have options. Whether you want maximum long-term savings, minimal upfront costs, or a middle ground that balances both, there’s more than one way to pay for storage—each with its own pros, cons, and fine print.

In a nutshell: Comparing energy storage financing options

When you purchase a battery upfront, you take immediate and full advantage of any incentives and rebates, from tax credits to cash rebates to performance-based incentives. Like solar, buying your battery upfront is often the best way to maximize your savings with storage.

The biggest drawback of a cash purchase is that storage isn’t cheap. If you want to purchase your system in cash, you’ll need enough capital to pay for your battery, which can cost $15,000 or more before any available incentives, depending on how much backup power you’re after.

Storage loans are another way to own your system outright. They let you pay for the system over a set number of years, rather than all at once. There are two different types of storage loans: 

• Solar-plus-storage loan: The most common way to finance a storage system is through a dual solar-plus-storage loan. If you’re buying a new solar panel system, adding the price of a battery to your solar loan will increase your monthly bills slightly.

• Storage-only loan: More and more solar financing companies offer storage-only loans, meaning you can take advantage of low-cost financing even for a retrofit or standalone storage system.

Storage loans (and solar or solar-plus-storage loans) are available through several entities, from solar-specific lenders to home-equity loans through your bank or credit union.

Similar to leasing a solar panel system–or a car–some companies also offer leases for energy storage systems. While standalone battery leases are much rarer than third-party ownership (TPO) options for solar panels or solar-plus-storage systems, the concept works effectively the same way: Pay a monthly fee for your battery, which someone else owns and maintains for you. If you plan to lease your solar panel system and you want to add storage, rolling the battery into your solar lease might be the best way to finance it.

If you want the effective “federal tax credit pricing” of a third-party system but still want to own your battery, a pre-paid TPO arrangement may be worth considering. But it comes with tradeoffs.

You’ll need to:

• Pay for the system upfront—either with cash or a loan—similar to a traditional purchase.

• Allow a third-party company to own the system for at least the first five years of its life.

Here’s how it works: You sign a lease or PPA, but instead of making monthly payments, you make one large upfront payment. Because the third-party provider owns the system, it qualifies for federal commercial clean energy tax credits—often worth 30% to 50% or more when bonus credits apply. In theory, that tax credit value is reflected in a lower upfront price for you.

However, there’s an important timing requirement. To avoid IRS recapture of those commercial tax credits, the third-party provider must retain ownership for at least five years. After that compliance window—typically around year six, depending on contract structure—ownership is transferred to you under the terms outlined in your agreement.

Pre-paid TPO arrangements have gained traction following the rollback of residential clean energy tax credits, since homeowners can no longer claim those incentives directly. By contrast, commercial tax credits remain available to third-party owners, creating this workaround structure.

That said, the details matter. Eligibility for state and local incentives may differ from a direct purchase, and buyout or transfer terms vary by provider. As with any TPO agreement, the long-term value depends heavily on the fine print—so be sure you understand exactly when ownership transfers, at what cost (if any), and what happens if you move before that date.

There’s no one-size-fits-all way to pay for battery storage. Cash purchases typically deliver the highest lifetime savings with immediate ownership. Loans lower the upfront barrier while still giving you ownership. Traditional leases and PPAs minimize upfront costs but trade away ownership and some long-term upside.

Pre-paid TPO arrangements sit somewhere in the middle: They can offer stronger long-term savings, but the outcome depends heavily on contract terms—especially buyout timelines, transfer provisions, and eligibility for state or local incentives.

Before choosing a payment option, compare quotes from multiple installers and financing providers to understand the total lifetime costs, ownership timelines, and incentive eligibility.