StoreSense

Home Battery ROI Calculator

A battery gives back less than it takes in, and less every year.

Installed cost ($)

Usable capacity (kWh)

Round-trip efficiency (%)

Full cycles per year

Peak rate ($/kWh)

Off-peak rate ($/kWh)

Solar surplus stored (kWh/yr)

Export rate ($/kWh)

Capacity fade (%/yr)

Warranty (years)

Maintenance ($/yr)

Payback

8.7 years

A battery earns from two things: the gap between peak and off-peak rates, and storing solar you would otherwise export cheaply. Round-trip losses mean you never get back what you put in, so the effective spread is always narrower than the tariff difference suggests.

Saving in year one: $1,057
Effective spread: $0.28/kWh
Net at end of warranty: $1,121

What you entered

Installed cost ($): 8500Usable capacity (kWh): 10Round-trip efficiency (%): 88Full cycles per year: 300Peak rate ($/kWh): 0.42Off-peak rate ($/kWh): 0.09Solar surplus stored (kWh/yr): 900Export rate ($/kWh): 0.06Capacity fade (%/yr): 2Warranty (years): 10Maintenance ($/yr): 60

1
Energy through the battery each year
10 kWh usable × 300 cycles, at 88% round trip= 3,000 kWh in, 2,640 kWh out (360 kWh lost)
2
Saving from charging off-peak
2,640 kWh × $0.42 − 3,000 kWh × $0.09= $838.80 a year
3
Saving from storing solar instead of exporting
900 kWh × 88% × $0.42 − export at $0.06= $278.64 a year
4
Net saving in year one
$838.80 + $278.64 − $60 maintenance= $1,057.44 — effective spread $0.28/kWh
5
Payback with 2% capacity fade a year
$8,500 recovered from a saving that shrinks each year= 8.7 years (8.0 ignoring fade)
6
Position at the end of the 10-year warranty
$9,620.51 saved − $8,500 cost= $1,120.51 — pays back in warranty

Result

Payback: 8.7 years

This battery pays back in 8.7 years, inside its 10-year warranty, leaving $1,121 ahead by the time the warranty ends. Year one saves $1,057 — $839 from off-peak charging and $279 from storing solar rather than exporting it. Note that 360 kWh a year never comes back out, which is why the effective spread is $0.28 rather than the $0.33 the tariffs suggest.

Home battery payback across peak electricity rates, on a $8,500 10 kWh system

Every row holds the battery fixed at $8,500 installed, 10 kWh usable, 88% round-trip efficiency, 300 full cycles a year, a 9 cent off-peak rate, 900 kWh of stored solar surplus that would otherwise export at 6 cents, 2% capacity fade a year, $60 a year maintenance and a 10-year warranty. Only the peak rate changes, because that is the single number that decides whether storage pays back at all.

Peak rate ($/kWh)	Effective spread ($/kWh)	Saving in year one	Payback (years)	Net at end of 10-year warranty
$0.18	$0.07	$234	Never	-$6,413
$0.22	$0.10	$371	33.0	-$5,158
$0.26	$0.14	$508	20.8	-$3,902
$0.30	$0.17	$646	15.4	-$2,646
$0.35	$0.22	$817	11.7	-$1,077
$0.42	$0.28	$1,057	8.7	$1,121
$0.50	$0.35	$1,332	6.8	$3,632
$0.60	$0.44	$1,675	5.3	$6,771

Illustrative only, not financial advice, and not a quote: run your own installed price, tariff and cycle count. The effective spread is the peak rate times 88% efficiency minus the 9 cent off-peak rate, which is why it is always narrower than the raw tariff gap. At $0.18 peak the battery saves money every year but never accumulates $8,500 within 40 years, so payback reads Never. Break-even against the 10-year warranty lands between the $0.35 and $0.42 rows. Backup power during outages is worth real money to some households and is deliberately not priced here. Federal or state storage incentives reduce the installed cost you enter and shorten every payback shown.

A home battery ROI calculator works out whether storage pays for itself, and how long that takes once the two things that erode the return - round-trip losses and capacity fade - are included. Batteries are usually sold on a headline saving derived from the gap between peak and off-peak electricity rates. That gap is real, but it is not what you earn, because a battery gives back less energy than it takes in and holds less energy every year it operates.

The return comes from two distinct sources, and separating them matters because they respond to different things. Tariff arbitrage means charging when electricity is cheap and discharging when it is expensive. You pay the off-peak rate on everything that goes in, but only receive value on what comes back out, so a battery at eighty-eight percent round-trip efficiency loses twelve percent of every cycle before any saving is counted. The effective spread - peak rate multiplied by efficiency, minus the off-peak rate - is always narrower than the difference between the two tariffs, and on a flat tariff it is negative, which is why storage without a time-of-use plan cannot pay back at all.

The second source applies to homes with solar. Surplus generation exported to the grid typically earns far less than the retail rate charged to import it, and that gap is often three or four to one. Storing the surplus and using it later converts a low export payment into an avoided peak purchase, which is usually the more valuable of the two mechanisms per kilowatt-hour. It is also capped by how much surplus you actually generate, so a large battery on a small array leaves capacity idle - the reason battery sizing should follow the surplus rather than the other way round.

Payback is then accumulated year by year rather than dividing cost by a first-year saving, because capacity fade of one to three percent annually means each year saves less than the one before while maintenance stays flat. The comparison that matters is payback against the warranty term: recovering the cost inside the warranty means the remaining life is profit and the risk is covered, while payback beyond it means betting on a battery outlasting what the manufacturer will guarantee. Backup power during outages, which many buyers value most, is not priced here at all - it is worth whatever an outage costs you, and that is a judgement rather than a calculation.

Effective spread, not tariff difference

Round-trip efficiency applies to what comes out, while the off-peak rate is paid on everything that goes in. The saving per kilowatt-hour is the peak rate multiplied by efficiency, minus the off-peak rate - always less than the headline tariff gap. On a flat tariff it turns negative, which is why arbitrage needs a time-of-use plan to work at all.

Payback against warranty is the real test

Recovering the cost inside the warranty means everything after that is profit and a failure is covered. Payback beyond the warranty means relying on the battery outliving what the manufacturer will stand behind. Because capacity fades, later years save less than earlier ones, so payback must be accumulated year by year rather than divided from the first year.

Frequently asked questions

An 8,500 dollar 10 kWh battery on a 42 cent peak and 9 cent off-peak tariff - what is the payback?

8.7 years, inside a 10-year warranty. Three hundred cycles move 3,000 kWh in and 2,640 out at 88 percent efficiency, saving 838.80 dollars from arbitrage. Storing 900 kWh of solar surplus instead of exporting it adds 278.64, so year one nets 1,057 after maintenance.

Why is the effective spread only 28 cents when the tariffs differ by 33?

Because you pay the off-peak rate on all 3,000 kWh charged but only earn peak value on the 2,640 that come back out. The spread is 42 cents times 88 percent, less 9 cents, which is 27.96. The missing 360 kWh a year is the round-trip loss, and no tariff arrangement recovers it.

Does a battery pay back without solar?

It can, but only on a time-of-use tariff with a wide spread. Set solar surplus to zero and the saving falls to the arbitrage line alone, which lengthens payback considerably. On a flat tariff the effective spread goes negative and there is no payback at any price, because you are buying and selling the same electricity at the same rate while losing some of it.

How much does capacity fade change the answer?

Enough to matter, but it is not decisive at typical rates. Two percent a year turns an 8.0-year simple payback into 8.7 once each year's smaller saving is accumulated properly. At five percent fade the effect compounds much faster, which is why the warranted capacity retention is worth checking rather than assuming.

How does this differ from the battery tariff and solar battery calculators?

Those two each price one revenue stream and stop there: the tariff optimizer sizes a battery and values off-peak charging, and the solar battery calculator values the self-consumption uplift. Neither includes what the battery cost. This one combines both streams, subtracts capital cost, applies capacity fade year by year, and answers whether it pays back before the warranty expires.

Should backup power be part of this calculation?

Not in this one, deliberately. Backup value depends entirely on how often your supply fails and what an outage costs you - spoiled food, lost work, medical equipment - and those figures are personal rather than general. Treat the payback here as the energy case, and weigh backup separately as the reason it may be worth buying anyway.