What is a consumption-only battery?

Home batteries store energy produced now for use later. When paired with solar panels, they let you access the free electricity your panels generate at any time—even when it's dark out.

Most home batteries also provide backup power, so if the grid goes down, you can keep the lights on. But with a $9,000+ price tag, this type of solar battery setup isn’t always feasible—or financially wise—for all homeowners to invest in. Now, there’s an alternative: a consumption-only battery.

This more affordable home battery setup makes a lot of sense for those on time-of-use electricity rate plans or who don't have access to true net metering. But it lacks one major battery function: Consumption-only battery setups can’t provide backup power during outages.

Let’s talk about what consumption-only batteries are, how they work, and who should get them.

Consumption-only batteries, also called no-backup batteries, are energy storage devices. You can use them to maximize your electricity savings by way of self-consumption—producing and consuming your own electricity at your home or business.

Here’s how it works: You’ll charge your consumption-only battery using your solar panels during the day, then rely on your battery to power your home at night (during peak demand hours). This way, you’ll be using little to no electricity from the grid, saving significant money on your utility bills.

It’s important to note that these batteries are grid-tied, which means consumption-only batteries shut down when the grid does—yes, even if they’re fully charged. These batteries also can’t help you achieve energy independence (called islanding in the solar world) like a backup battery can.

Good question! No-backup batteries can still help you save a significant amount of money on your utility bills.

These batteries started gaining popularity in 2023 when some states started to peel back their net metering incentives (more on net metering later on). The policy changes mean that new solar customers won’t be awarded as generously for the excess power their panels produce and send to the grid. Some utilities also added time-of-use (TOU) electricity rate plans for solar customers, which makes electricity more expensive at certain times—mostly at night when panels aren’t producing.

As a result of these changes, two things became true:

1. Homeowners in these states will no longer see cost savings from installing solar panels as significant as they did under net metering rules.

2. Solar storage is now more valuable in these states because homeowners want to use more of their panels’ electricity, especially during peak electric rate hours.

Andrew Cohen, sales director at NRG Clean Power, explained that until these changes, solar batteries were considered a luxury and not financially practical for most homeowners—especially those without frequent power outages. Needless to say, many solar companies were struggling to ensure that going solar was still a valuable investment for homeowners.

Fortunately, he said, industry experts quickly figured out a solution: consumption-only batteries.

“Someone said, ‘Hey, why don’t we just use batteries to store that energy that’s going back to the grid? That way, the homeowner can use it themselves rather than sending it back at pennies on the dollar.’ It was a Eureka moment,” Cohen said.

The process of storing your electricity in a battery for later use—called load-shifting—is a capability all solar batteries have, but Cohen said it was always a secondary selling point. Most homeowners were only interested in batteries for emergency backup, but now there’s an increased interest in load-shifting to reduce the amount of electricity they pull from the grid.

To sweeten the deal, Cohen told us solar companies can shave between $1,500 to $3,000 off installation costs for consumption-only batteries because the devices are easier to install and require less equipment without the backup component.

Many batteries work in both consumption-only and backup power setups—it's just all about the wiring. So if you have your heart set on a certain brand but don't need backup power, don't worry: There's a good chance your installer can wire any battery for consumption-only use.

“The batteries themselves don't really change from a tech perspective, it's really the additional parts that are needed to make backup possible on any battery,” Cohen said.

Here's a list of some popular battery brands that can be used for consumption only:

• Tesla Powerwall

• Enphase

• FranklinWH

• SolarEdge Energy Bank

No-backup batteries are great for homeowners who live in areas with TOU rates, have unfavorable net metering policies, and don’t experience many power outages.

If you have TOU rates

Consumption-only batteries are especially valuable if you’re on a TOU electricity plan.

Let’s say, for example, you live in California and have Pacific Gas and Electric (PG&E) as your utility. Under most of their plans, you’ll pay more for the electricity you use on weekdays between 4 and 9 p.m. Your solar panels aren’t able to provide power once the sun goes down, which unfortunately lines up with these expensive peak hours. But if you have a battery, you can use your solar panels to power up your battery during the day, then switch to battery power during peak usage hours. That way, you’re pulling little to no pricey electricity from the grid.

If you have less-than-ideal net metering policies

If you live in a state that offers one-to-one net metering, adding any type of home battery likely isn’t worth the expense unless you're prone to frequent grid outages. With a traditional home solar panel system, when your panels produce more electricity than you need at any given moment, the extra electricity is sent to the grid. If your utility company offers net metering, you’ll get credits for all the exported electricity, which you can use to offset your utility bills.

Unfortunately, not every state offers net metering. That’s why consumption-only batteries are gaining popularity in California, where lawmakers replaced traditional net metering with NEM 3.0. Under this less-favorable version of net metering, the value of energy credits is about 25% of the retail electricity rate (what you pay for electricity).

Of course, a small credit is better than no credit. But you’re still going to rack up a utility bill if you need to use grid electricity, especially during peak demand hours. That’s why having energy storage is important for states without one-to-one net metering, and extra important if TOU rates are also applicable--a consumption-only battery is a cheaper energy storage alternative.

Yes, you can get a consumption-only battery (or any home battery) without solar panels. This might be helpful if you have TOU rates. You can charge your battery with standard grid electricity during times when electricity rates are cheaper, and then use that battery power during peak electricity hours.

“It’s very rare that people get them without solar, but some people like to charge the battery up from the grid when it costs less money and then use it, or export the energy when it is more valuable,” Cohen said. He explained that some utilities will buy electricity at higher rates during certain months of the year, making it valuable for battery owners to hold off on sending electricity to the grid until the increased rates. 

Of course, you’ll still pay more for electricity than you would with a solar setup. Solar panels aren’t free, but the average system pays for itself in just 7.5 years. Meanwhile, the cost of standard electricity has risen nearly 30% over the past four years.

The biggest difference between a consumption-only and a backup battery is that consumption-only batteries can’t provide emergency backup power if the grid goes down. Because of that, consumption-only batteries are easier to install and require much less equipment (no subpanels, critical load calculations, or power transfer switches necessary), which is why they’re significantly cheaper.

Each type of battery offers its advantages, but choosing the one that best meets your energy wants and needs will ensure that your solar system is practical and cost-effective. 

There’s also a third possibility: You may not need a solar battery at all. If you live in a state that offers one-to-one net metering or your electricity bills are fairly inexpensive, you might be better off skipping battery storage altogether.