Solar battery incentives and rebates

If you're considering investing in energy storage, there are valuable tax incentives and rebates available that can help lower your installation costs, just as there are for home solar panel systems.

The most lucrative tax credit currently available is the federal solar tax credit, but it's set to expire after December 31, 2025. So if you're interested in purchasing a battery, acting fast and having one installed by the end of this year will save you thousands of dollars.

From additional federal incentives and state rebates to utility programs, we'll walk you through some of the best storage incentives out there that can help reduce the costs of installing a battery.

This article is for informational purposes only and should not be considered tax advice. Please consult with a qualified tax professional about your specific situation.

The best incentive for storage is the federal investment tax credit (ITC), but this valuable credit is ending soon. The exact same ITC that provides a 30% credit for the cost of your solar system provides that same benefit to storage systems if they meet certain conditions—but only through the end of 2025.

On July 4, President Trump signed HR1 (the "One Big Beautiful Bill Act") into law, which accelerates the termination of Residential Clean Energy Credit. Previously scheduled to expire after December 31, 2034, the 30% tax credit now ends after December 31, 2025.

All residential storage systems over 3 kilowatt-hours (kWh) in size are eligible for the 30% tax credit when purchased and installed by the end of this year. For a typical home energy storage system, the ITC can reduce the cost of your system by $3,000 to $5,000. To qualify, your battery storage system must be installed and operational by Dec. 31, 2025—there's no phase-out and no grace period after that date.

When it comes to commercial properties, solar and storage projects that begin construction by July 4, 2026, can still qualify for credits, but must be placed in service by Dec. 31, 2027. Projects beginning construction after July 4, 2026, face even tighter deadlines to qualify for any incentives.

Increasingly, a number of states now also offer energy storage rebates to encourage the growth of the storage industry. These incentives typically take one of two forms: an upfront rebate or a performance-based incentive. Rebate programs are exactly what they sound like: states provide a direct cash payment after your battery is installed and connected to the grid. To date, state-level performance incentives for storage have typically been added to solar incentives.

Here are a few state level battery storage incentive examples:

California

Perhaps the best-known state-level storage incentive in the U.S. is California's Self-Generation Incentive Program (SGIP), which provides a dollar per kilowatt ($/kW) rebate for the energy storage installed. While the rebate level steps down as more homes and businesses add storage in California, in 2020, the state updated SGIP to provide more funding and higher levels of incentives for customers in high fire threat districts and for low-income customers to help provide emergency backup power to those that need it most.

Connecticut

Eversource and United Illuminating customers can benefit from the Energy Storage Solutions program in Connecticut. Residential customers earn up to $16,000 per installation plus more incentives as you send energy to the electric grid. Businesses receive a 50% upfront incentive when connected to the grid and used to help reduce grid stress during the summer. Plus, businesses can earn performance-based incentives twice a year for 10 years depending on how much power the battery adds to the grid during peak periods.

Massachusetts

Massachusetts recently finalized new rules for its Solar Massachusetts Renewable Target (SMART) program to help stabilize energy markets and keep solar projects viable even as federal incentives end. The revamped SMART program—which compensates homeowners and businesses for the solar electricity they produce—now includes a built-in mechanism to respond to market shifts, with compensation rates reviewed and reset annually rather than using the old declining block structure.

The updated program begins accepting applications on October 15, 2025, and is designed to provide more stable, predictable incentives for solar installations. You can also benefit from participating in the Mass Save Connected Solutions program, which offers financial incentives and zero percent interest financing to reduce the cost of battery installation and support grid stability.

New York

While the state of New York has significant policy targets for energy storage (3 gigawatts by 2030), and while there are plenty of incentives for commercial-scale storage, the only incentive currently available for homeowners in the state at present is for residents of Long Island. This program offers a similar rebate-style incentive to California's SGIP program, with the state currently offering a $250 per kilowatt rebate to Long Island residents. But this incentive won't last forever– as of early 2025, nearly 96% of the funds were already committed. 

As an example of how solar battery incentives can influence the cost you pay, let's take a Tesla Powerwall installation in California. You can read our article about the SGIP battery incentive for more in-depth information, but here's how the costs play out once everything is all said and done:

Especially in a state like California, rebates and incentives can save you significant money on a solar plus storage installation. As solar batteries only become more popular, it's likely that incentives like SGIP will continue to receive funding, and also will likely pop up in other states.

Beyond states taking steps to encourage greater adoption of energy storage technologies, some utilities are now also offering incentives to home and business owners who install storage. To date, most of these utility-specific storage incentives are in the Northeast, between the ConnectedSolutions program and Green Mountain Power's storage programs. 

The ConnectedSolutions program

Utility customers of Eversource or National Grid in Connecticut, Massachusetts, New Hampshire, and Rhode Island can participate in the ConnectedSolutions program, a demand response-style incentive that pays you an annual incentive for access to the stored energy in your battery. The incentive structure is designed with two key things in mind: first, it's designed to not pull from your battery if a major storm event is on its way so that you'll always have backup power when you need it; and, second, the incentive is designed to cover the cost of your battery in five years, meaning the incentive will ultimately pay you to have a battery over the ten years of the incentive program.

Green Mountain Power storage programs

While Vermont doesn't have any state-specific storage incentives, their primary utility–Green Mountain Power–has been a pioneer for residential energy storage in the US. In fact, Green Mountain Power offers a few different programs for energy storage: a bring-your-own-device program that provides a rebate for whatever battery you want to install (and up to $10,500 rebate), as well as a Tesla Powerwall lease program.