The United States is witnessing an unprecedented surge in demand for battery energy storage systems (BESS) paired with solar energy. Solar plus storage accounted for 84% of all new electricity-generating capacity added to the grid last year. In 2024, the U.S. battery storage market set a new record with over 12.3 gigawatts (GW) of capacity added to the total grid.
If you have no context for understanding that number, no worries! 12.3 gigawatts (GW) of battery backup stores a massive amount of power. That’s enough electricity to power 2 million average homes at once. Put another way, it means that we have the energy of 12 large nuclear power plants or 40 million solar panels stored and ready to deploy at any moment.
We added 47% of the U.S.’s 26 GW of storage capacity last year. The demand for energy storage is increasing because renewable energy generation is intermittent. Energy storage enables us to store this energy and use it when it’s most needed.
Exact Solar has witnessed a surge in demand for energy storage in New Jersey and Pennsylvania. As a result, we’ve built hundreds of battery backup systems for homes and businesses of all sizes.
Energy storage offers solar system owners backup power during outages and the ability to store excess solar energy for use at night or during peak demand hours. This increases the value of their solar investment over time, reduces reliance on the grid, and lowers electricity bills through time-of-use optimization (which we’ll cover in more depth below).
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The Growth of Battery Backup Technology
In the early days of home solar energy systems, battery backup was possible but not always practical.
Lead-acid batteries, the same type still used in cars, were the standard option for many years. While they provided a basic solution for off-grid storage, they had limitations:
- Bulky and heavy designs
- Short lifespans
- Low depth of discharge (the amount of power that can be used relative to a battery’s total capacity).
- Need hands-on maintenance
Because of these drawbacks, battery backup was a niche solution for many years. The technology was used primarily in remote, off-grid locations or by solar enthusiasts willing to tolerate the inconvenience of topping off their lead acid batteries with distilled water once a year.
Everything changed when lithium-ion batteries hit the market. First developed in the 1980s and popularized through consumer electronics, lithium-ion batteries offered several game-changing improvements over lead-acid technology:
- Lithium-ion batteries are lighter and more compact
- They can store more energy for longer periods
- They can be discharged to zero without damage
Today’s battery systems boast longer lifespans, improved safety features (such as thermal management systems), and more innovative software that helps homeowners maximize the value of their stored energy.
As extreme weather events, grid instability, and rising electricity costs become more common, battery storage has transitioned from a “nice-to-have” luxury into an affordable option.
Why Demand is High for Battery Storage
Across the country, energy costs are rising more than ever, while homeowners face record rates of outages from extreme weather events. In New Jersey and Pennsylvania, many homes rely on electric heat, well/sump pumps, or medical equipment. For anyone relying on these technologies, a power outage can cause an immediate threat to their property and safety.
Just in the past year, Pennsylvania has faced several significant natural disasters. In August 2024, Tropical Storm Debby caused severe flooding across the state, leading to a federal disaster declaration and substantial damage to infrastructure and homes. Last November, Governor Josh Shapiro declared a disaster emergency in response to lake-effect snowstorms in the northwest, which resulted in nearly three feet of snow in parts of Erie County.
New Jersey also faced several natural disasters in 2024. Severe drought conditions led the U.S. Department of Agriculture to designate multiple counties as primary natural disaster areas in June. In August, heavy rainfall caused widespread flooding in North Jersey, resulting in road closures. By November, the drought had intensified, contributing to multiple wildfires across the state, including the Jennings Creek Fire, which burned around 5,000 acres of forest near Greenwood Lake.
Rising rates of natural disasters raise energy prices because interconnection providers need to raise their prices to meet capacity demands when extreme weather events hit the grid.
Battery storage offers peace of mind by keeping the lights (and essentials) on even when the grid goes down. When combined with a solar energy system, a home can “island” itself in a disaster. The solar panels generate power onsite, which is first fed into the home and then into the batteries to ensure they’re fully charged.
How Much Does Battery Backup Cost?
There’s no standard cost for a battery backup system. Battery systems are very bespoke and are designed for each project. The question determining how much your battery system costs is: “What do you want to power and for how long?”
There is an expected range battery systems fall into. For residential installations, battery backup systems typically cost between $8,000-$25,000 before incentives. This includes the cost of the battery itself and installation. The final price will vary significantly based on the size of the system and your home’s energy usage.
What Influences Cost?
- Battery capacity/number of batteries: The more energy you want to store (measured in kilowatt-hours), the higher the cost.
- Power output/inrush capacity: Higher power output means the battery can handle the inrush (explained below) of more appliances simultaneously.
- Installation complexity: Where the battery is mounted, electrical upgrades, and backup load configuration all impact labor and material costs.
The Role of Inrush Current
A critical factor in system design is inrush current, the brief, sharp spike of electricity that certain appliances (air conditioners, sump pumps, or refrigerators) draw when they first turn on.
These devices may require 3–7 times their normal operating current for a split second during startup. If they can’t draw a high load to start, then they don’t turn on at all.
If your battery system isn’t designed to handle this surge, it may shut down or fail to power the device at all, even if it technically has enough stored energy. This is why installers often recommend a system with sufficient instantaneous power output or pair batteries with load management tools to prioritize essential circuits.
Designing around inrush current can increase the upfront cost, as it may require additional battery capacity or upgraded inverters. However, this ensures the system performs reliably during outages.
Key Benefits of Battery Backup for Solar
Residential Benefits
For homeowners, knowing that essential lights and appliances will remain operational during an outage is one of the most compelling reasons to install solar panels with battery backup. But it’s far from the only benefit.
Currently, anyone who installs a solar energy system with battery backup can claim 30% of their costs back in the following tax year through the federal Investment Tax Credit (ITC).
Batteries also help homeowners reduce their energy costs by storing excess solar energy generated during the day for use during peak periods or at night. This can lead to meaningful savings in states with time-of-use (TOU) electricity pricing or high evening rates.
If you’re unfamiliar with time-of-use pricing, don’t worry! It’s a relatively simple concept. During peak hours (in the middle of the day), everyone is using the electricity grid at once. This makes it much more difficult for utility companies and interconnection providers to ensure everyone has enough power, so they charge more for the power they produce at these times.
Battery storage maximizes the return on investment (ROI) for solar panels by capturing and utilizing more kilowatt-hours of solar energy rather than sending all the excess back to the grid. As utility rates continue to rise, owners of solar energy systems with battery backup are better protected against future price hikes.
Commercial Benefits
Solar energy systems with battery storage offer even more benefits to businesses than to homeowners.
Any business that invests in a solar energy system with battery storage can take advantage of the 30% Investment Tax Credit and potentially earn three additional 10% tax credits, lowering project costs by 60%. These additional credits depend on where the project is built and where the materials used are sourced from.
Battery storage offers business owners peace of mind during power outages, keeping critical systems running and preventing operational disruptions. This is particularly valuable for industries where downtime can have serious financial implications, like manufacturing or refrigeration. But the benefits don’t stop there.
A battery energy storage system can also help business owners reduce demand charges (these are the rates that utilities charge for ensuring power capacity during peak use times).
Demand charge management, also known as peak shaving, is the process of drawing from energy stored in batteries when energy from the grid is most expensive (at the highest-use time of day). When combined with solar panels, peak shaving lowers power bills by using the (far cheaper) electricity that was generated and stored on-site rather than using electricity from the grid when it’s most expensive.
By reducing spikes in energy use, businesses can avoid the steep utility demand charges that make up a large portion of their bills.
Batteries can even generate new revenue streams through participation in demand response, where stored energy is dispatched back to the grid when needed.
Battery Storage Systems We Install at Exact Solar
Enphase IQ Batteries
The Enphase IQ Battery system is known for its modular design, allowing homeowners to start small and easily expand their storage capacity over time. Built with lithium iron phosphate (LFP) chemistry, they’re safe and highly reliable. It’s easy to monitor their level of charge through the Enphase app.
These batteries are perfect for residential and small commercial solar energy systems, especially those using Enphase microinverters.
SolarEdge Batteries
SolarEdge batteries are designed to work with SolarEdge inverter systems for an all-in-one solar plus storage system. The company provides access to energy management, real-time monitoring, and enhanced system control through the SolarEdge app.
Their batteries are also designed for residential and smaller-scale commercial applications. Their batteries work best when paired with SolarEdge inverters.
Tesla Powerwall
The Tesla Powerwall is one of the most recognized names in residential energy storage. With 13.5 kWh of usable capacity per unit, it’s one of the largest available residential batteries on the market. For homeowners who already use the Tesla ecosystem and want full home backup, it’s a great product. Unfortunately, Tesla’s battery division does not have a reputation for great customer service.
The Tesla Powerwall also has a built-in string inverter, so system owners won’t have to invest in extra components. All energy production and storage are trackable through the Tesla app.
Incentives and Financial Support for Battery System Owners
The Inflation Reduction Act introduced the Residential Clean Energy Credit, offering a 30% tax credit on the cost of installing qualified clean energy systems, including battery storage technology. This credit applies to systems installed between 2022 and 2032, with a gradual phase-down beginning in 2033.
Starting in 2023, standalone battery storage systems with a capacity of 3 kWh or more are eligible for this credit, even if not paired with solar panels.
New Jersey Incentives
New Jersey has quite an ambitious renewable energy goal, pledging to achieve 100% carbon neutrality by 2035. To help meet this goal, the state offers several incentives.
New Jersey, like many states across the U.S., has 1-1 net metering. This means that publicly traded utility companies must compensate owners of solar energy systems at the retail rate.
New Jersey’s Successor Solar Incentive (SuSI) Program pays homeowners $85 per Solar Renewable Energy Certificate (SREC) produced, providing a stable income stream over 15 years to offset the cost of installing a solar energy system.
New Jersey plans to invest in energy storage through their proposed New Jersey Storage Incentive Program (NJ SIP). Eligible behind-the-meter storage systems could receive initial benefits of up to $400 per kilowatt-hour (kWh), which would significantly offset installation costs. The NJ SIP is part of the state’s strategy to achieve 2,000 megawatts (MW) of installed energy storage by 2030. This legislation is still pending.
Pennsylvania Incentives
Pennsylvania lags behind New Jersey (and much of the country) when it comes to renewable goals and incentives since the state’s renewable targets were met in 2021 and haven’t been updated. Pennsylvania currently has no state-specific incentives for battery storage, but residents can benefit from the federal 30% tax credit for energy storage systems.
Pennsylvania offers net metering for residential solar photovoltaic systems up to 50 kW. Pennsylvania also has an SREC market, but prices are far lower than in neighboring New Jersey since the demand is lower (utility companies aren’t as motivated to buy them without clean renewable targets).
Pennsylvania is actively exploring policies to support energy storage deployment. The Pennsylvania Public Utility Commission (PUC) has established guidelines encouraging the use of electricity storage by electric distribution companies to enhance grid reliability.
Frequently Asked Questions About Battery Backup
1. Is battery backup safe?
There are a few large-scale battery fires that have made national headlines. However, it’s important to distinguish between utility-scale systems and the much smaller, carefully regulated systems installed in homes.
Residential battery backup systems are designed and installed with a strong focus on safety. Industry standards like UL 9540 and NFPA 855 ensure that certified energy storage products meet rigorous fire and electrical safety requirements. As part of that certification process, battery manufacturers undergo UL 9540A testing.
In most cases, modern residential batteries, especially those using safer chemistries like lithium iron phosphate (LFP), are installed in enclosures with built-in fire suppression, thermal monitoring, and emergency shutoff features.
2. How long will a battery backup system power my home during an outage?
That’s entirely up to you, what you want to power, and for how long. Battery backup duration depends on the size of the system and your energy usage.
A typical residential battery (like the Tesla Powerwall or Enphase IQ Battery) can provide power for essential loads—such as lights, refrigerators, and Wi-Fi—for several hours to a full day or more, especially when paired with solar panels that can recharge the battery during daylight.
3. Do I need solar panels to install a battery backup?
No, but it’s highly recommended.
You can install a battery system without solar panels (known as standalone storage), but having onsite solar panels allows your battery to recharge during longer outages and reduces dependence on the grid.
Solar panels are like a generator that you never need to refill. If you’re without power for a long time and have no access to fuel, you’ll be glad you added solar panels.
4. Can I go completely off-grid with solar and batteries?
Technically, yes, but it requires a larger system and careful energy management. Most homeowners stay grid-tied with battery backup for added reliability, flexibility, and access to net metering or other incentives like SRECs.
5. How much does a battery backup system cost?
Costs vary based on battery size, brand, and installation complexity. Again, it’s all based on your unique needs, what you want to power, and for how long.
Generally, residential battery systems range from $10,000 to $30,000 before incentives. Federal tax credits and state programs can significantly reduce that upfront cost.
6. Can I add a battery to my existing solar system?
In most cases, yes.
Most modern solar systems are battery-ready, and even older setups can often be retrofitted with compatible battery technology.
It’s always best to consult your installer to assess compatibility and find out what your available options are.
7. What’s the lifespan of a solar battery?
Most lithium-based batteries have a lifespan of 10 to 15 years, depending on usage and manufacturer. Warranties typically cover 10 years or a set number of charge cycles (e.g., 6,000+). Modern batteries track these, so it’s easy to see how many cycles a battery has gone through.
8. What happens if the battery is full and my solar panels are still producing power?
If your battery is fully charged and you’re not using that energy in the home, the excess electricity is typically sent back to the grid (if your system is grid-tied), allowing you to earn credits through net metering.
9. Do batteries work in cold climates?
Yes, but performance can be affected. Many batteries come with thermal management systems to maintain performance in colder temperatures, but these take power to run, so they may still perform less efficiently in the cold.
Proper installation (generally in a garage or other climate-protected area) can help mitigate weather impacts.
Ready to Explore Battery Backup for Your Home?
Whether you’re looking for peace of mind during outages, greater control over your energy use, or just want to make the most of your solar investment, battery backup can be a powerful solution. At Exact Solar, we’ll walk you through the options, answer your questions, and help you decide if energy storage is the right fit for your home.
Get started today with a free consultation! No pressure, just expert guidance from your local solar experts