How do you pay for a battery?
Last updated 8/25/2021
Home batteries taking off in the US; during 2019 and 2020, each quarter saw more residential energy storage installations than the previous one. And there’s good reason for this growth: the growth in the storage industry is driven in large part by the desire for resilience in the face of increasing storms and outage events and battery costs that have declined significantly over the last decade.
But storage isn’t free: to take advantage of the myriad benefits batteries have to offer, you’ll first need to pay for your energy storage system. When paired with a solar panel system, a typical battery will cost around $15,000 on EnergySage. While there aren’t as many ways to pay for batteries as there are for solar, you still have a few different options to pay for storage at your disposal, each of which has its own pros and cons.
Storage financing options
Similarly to solar, there are three primary models for financing your energy storage systems, with slight variations from what’s available for solar.
The most common way to pay for a battery is through an upfront, or cash, purchase. When you purchase a battery upfront, you get to take full advantage of any incentives and rebates available to you, from tax credits to cash rebates to performance based incentives. Similar to solar, purchasing your battery upfront is the best way to maximize your savings with storage.
At the same time, the one clear drawback of a cash purchase is that storage isn’t cheap. If you want to purchase your system in cash, you’ll need to have enough capital on hand to pay for your battery, which can set you back $15,000 or more depending upon how much backup power you’re after.
Storage loans are another way to own your system outright but let you pay for the system over 10 years, as opposed to all at once upfront. 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-plus-storage system, adding the price of a battery to your solar loan will just increase your monthly bills slightly.
- Storage only loan: increasingly, solar financing companies are offering storage only loans, meaning you can take advantage of low-cost financing even for a retrofit or standalone storage system.
Storage loans–or solar/solar-plus-storage loans–are available through a number of different entities, from solar-specific lenders to home-equity loans through your bank or credit union. Check out our loan marketplace to see some financiers in your area, or schedule a call with one of our Energy Advisors if you have a question about the differences between loans or financing options.
Similar to how you can lease a solar panel system–or a car–some companies also offer leases for energy storage systems. While much rarer than leases for solar panels, the concept works effectively the same way: pay a monthly fee for your battery, which someone else owns and maintains for you. If you are already planning to lease your solar panel system, and are interested in adding storage, this might be the best way to finance your battery–by rolling it into your solar lease.
A cash purchase is right for you if:
- You’re looking to maximize your savings from storage;
- You have enough tax liability to take advantage of the investment tax credit (ITC);
- Or, you have the funds available to pay for a storage or solar-plus-storage system up front.
A battery loan is right for you if:
- You don’t want to shell out the amount of cash required to pay for a storage or solar-plus-storage system upfront;
- But, you would like to be eligible for all incentives and rebates.
A battery lease is right for you if:
- You would prefer someone else to monitor and maintain the system;
- You aren’t eligible for tax incentives;
- Or, you’re lumping the battery in with a leased solar panel system.
EnergySage is the nation's online marketplace for solar and storage: when you sign up for a free account, we connect you with companies in your area, who compete for your business with custom solar-plus-storage quotes tailored to fit your needs. Over 10 million people come to EnergySage each year to learn about, shop for and invest in solar and home batteries. Sign up today to see how much you can save.