Home Battery Payback Calculator
A home battery pays for itself only if the daily price spread it captures, after round-trip losses, adds up to more than its cost over its life. Enter your capacity, daily energy cycled, the price spread and net cost to see the annual saving, payback period, lifetime savings and net lifetime value.
Typical home batteries are 5–15 kWh.
Energy shifted through the battery — about one cycle.
Peak − off-peak, or retail − solar export rate.
Installed cost after any upfront discount.
Assumptions
Energy returned vs stored; lithium-ion ~85–95%.
Often the warranty term, e.g. 10 years.
Lifetime net value
$-3,430
Savings over the battery’s life fall short of its cost.
Verdict: The battery pays back in about 15.2 years and nets roughly -$3,430 over 10 years.
Get a shareable image- Payback
- 15.2 years
- Annual saving
- $657
- Lifetime savings
- $6,570
- Daily saving
- $1.80
Value depends entirely on the price spread you can capture. Degradation, backup-power value and incentives are not included. Estimate only; not financial advice.
Save & compare
Save the current inputs and compare up to 4 side by side. Stored on this device only.
How it works
A home battery earns money by shifting energy in time: storing cheap (or self-generated) energy and using it when grid energy would otherwise cost more. Its whole economic case rests on the price spread you can capture each day.
- Energy cycled per day sets how much energy moves through the battery — roughly one cycle.
- Round-trip efficiency derates that energy, because charging and discharging lose a little.
- Price spread turns each usefully delivered kWh into a saving, multiplied over 365 days.
The headline is the net lifetime value — lifetime savings minus the battery cost. The chart shows cumulative savings climbing against the flat cost line; where they cross is your payback point.
Methodology & assumptions
Results use the inputs you provide. Most are user-supplied (your capacity, cost, daily cycling and price spread); round-trip efficiency is the one figure tied to a dated source. Battery degradation, backup-power value and incentives are deliberately excluded.
| Assumption | Default | Source |
|---|---|---|
| Usable capacity (default)User-supplied; typical home batteries are 5–15 kWh. | 10 kWh | — |
| Energy cycled per day (default)User-supplied; roughly one full cycle a day. | 10 kWh/day | — |
| Round-trip efficiencyResidential lithium-ion is typically 85–95%. | 90 % | National Renewable Energy Laboratory (NREL) |
| Price spread captured (default)User-supplied; peak − off-peak, or retail − export rate. | $0.20 /kWh | — |
| Net battery cost (default)User-supplied; installed cost after any upfront discount. | $10,000 | — |
| Battery service life (default)User-supplied; often the warranty term. | 10 years | — |
Full formula, every default and its source: Home battery payback methodology.
Worked example
Take a 10 kWh battery costing $10,000, cycling 10 kWh a day at a $0.20/kWh spread and 90% round-trip efficiency, over a 10-year life:
- Annual saving: 10 × 0.90 × 365 × $0.20 = $657/year (about $1.80/day).
- Payback: $10,000 ÷ $657 ≈ 15.2 years — beyond a typical 10-year warranty.
- Lifetime savings: $657 × 10 = $6,570.
- Net lifetime value: $6,570 − $10,000 = −$3,430.
On these numbers the battery does not pay back on arbitrage alone. Widen the spread to about $0.32/kWh, or cut the cost, and it flips positive — which is why your own tariff matters so much. Put in your figures above.
Frequently asked questions
Are home batteries worth it?
It depends almost entirely on the price spread you can capture each day. With a wide time-of-use gap or high avoided solar-import value, a battery can pay back within its warranty and earn a positive lifetime value. With a small spread, the savings rarely cover the install cost on economics alone — backup power and resilience may still justify it for you.
What payback period is typical?
At the default numbers — 10 kWh cycled a day, a $0.20/kWh spread and a $10,000 cost — payback lands around 15 years, longer than a typical 10-year warranty. A larger spread or a cheaper battery shortens it considerably. Enter your own figures to see where you land.
What is round-trip efficiency?
It is the share of energy you get back out of the battery compared with what you put in. Charging and discharging both lose a little energy, so a 90% round-trip efficiency means 100 kWh stored returns about 90 kWh of usable energy. Only that usable energy earns the price spread, so we derate the daily saving by it.
TOU arbitrage versus solar self-consumption — which spread do I use?
Use whichever the battery actually captures. For pure time-of-use arbitrage, the spread is your peak rate minus your off-peak rate. With solar, it is usually your retail import rate minus your (lower) export/feed-in rate — the value of using stored solar at night instead of buying from the grid. Pick the one that matches how you will run the battery.
How long do home batteries last?
Most residential lithium-ion batteries are warranted for around 10 years or a set number of cycles, and many keep useful capacity beyond that. We use a service-life input (10 years by default) for the lifetime sum; set it to your warranty term or a conservative estimate.
Does this include the value of backup power?
No. This calculator values only the daily energy arbitrage — the price spread you capture by shifting energy. The resilience value of keeping the lights on during an outage is real but very personal, so it is left out. Treat any backup benefit as a bonus on top of this result.
What price spread should I use?
Check your bill. For a TOU plan, subtract the off-peak rate from the peak rate. For solar, subtract your export rate from your import rate. Spreads of $0.10–$0.40/kWh are common depending on tariff and region — and the result is very sensitive to this number, so use your real figures.
Related calculators
Related guides
- Are home batteries worth it?Home batteries pay off on savings mainly with time-of-use rates or surplus solar; on arbitrage alone paybacks are long, but backup value can still tip it.
- Are solar panels worth it?Solar usually pays back in 7-12 years, then powers your home near-free for ~20 more. See when it is worth it, when it is not, and how to get your own number.
By EnergyTally Team · Editorial & analysis team
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