The Cost of Home Batteries Is Falling, Making Them More Appealing
Home batteries have never been cheap, with most costing thousands (if not tens of thousands) of dollars. A recent report from EnergySage reveals that battery prices have hit a record low.
EnergySage used quotes customers received through its website from January to June 2024 to track the prices paid for home batteries and solar panel systems.
The quoted battery prices have dropped to $1,133 per kilowatt-hour of energy storage capacity — a 16% drop from last year. Lower battery costs are a result of streamlined manufacturing processes, especially in China, and the decreasing cost of materials. 70% of the world’s lithium-ion cell production happens in China, according to IDTechEX.
As prices have fallen, consumer interest in home battery products has increased. Most people still prefer to purchase a battery with a solar panel system. According to the EnergySage report, 34% of U.S. customers who bought a solar system chose to include a battery during the first half of 2024, a trend that is expected to continue to rise.
Which home batteries are the most popular?
In terms of popularity, Tesla and Enphase remain the most quoted battery brands on EnergySage, exceeding 75% of the market share when combined. Tesla saw an 11% growth in overall market share within the past six months, likely due to the recent launch of the Tesla Powerwall 3, which more than doubles the power of the previous model.
Tesla’s Powerwall 3 is also incredibly cheap for home battery standards. EnergySage says the current cost of the Powerwall 3 is $1,000 per kWh of storage. The Powerwall 3 has 13.5 kWh of energy storage capacity; that’s about $13,500. This doesn’t include the cost of battery installation. We were quoted $16,551 for the cost of installing one Powerwall 3 on a home in Fort Mill, South Carolina, via Tesla’s website. The estimate includes the cost of the battery, gateway device, accessories, installation and taxes.
Tesla and Enphase aren’t the only battery brands out there that are fighting for space in the market. FranklinWH, SolarEdge, EG4 and SunPower are starting to take over what’s left of the market. SunPower has discontinued its energy storage product and recently filed for bankruptcy.
Home battery buyers are eyeing power bill savings
Consumer interest in home batteries has more than tripled year-over-year, according to EnergySage. This is especially apparent in California, where the battery and solar panel attachment rate has skyrocketed since the net billing changes in April. The attachment rate outside California also saw a 22% increase, especially in states that don’t have consumer-friendly net metering policies like Tennessee and Georgia. This makes holding onto your excess energy more valuable than selling it to the utility company.
Home batteries with capacities above 3 kWh qualify for the same 30% federal tax credit that covers solar panel systems. Data from the IRS show 48,840 taxpayers claimed the credit for batteries in 2023, with an average credit of $11,080.
You might assume that the primary reason for buying a home battery is for backup power during outages. EnergySage saw 33% of consumers citing energy bill savings as the main point of interest in home battery products, followed by 28% citing backup power and 29% citing self-supply.
Home batteries can really help you if your utility charges time-of-use rates, which are rates that change throughout the day as the demand for electricity rises and falls. In most cases, these rates get much higher during the early mornings and evenings when everyone is home and using energy. These are called peak hours.
If you have a home battery, you can use its stored energy to power your home during peak hours and then charge the battery once rates go back to normal.
