Solar Battery Payback Calculator

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Table of contents

• How to use
• Common mistakes
• Definitions
• Methodology
• Limitations & assumptions
• Sources

Full battery cycle: One full use of the battery's usable energy. If a 10 kWh usable battery delivers 5 kWh twice, that counts as one full cycle.

Usable battery energy per full cycle: The kWh the battery can deliver to your home in one full cycle, not always the full nameplate size.

Battery use charged by solar: The percent of delivered battery energy that came from solar electricity that otherwise could have been exported.

Export credit: The bill credit or value you get for sending extra solar electricity to the grid.

Round-trip efficiency: The percent of charging energy that comes back out of the battery after losses. At 90%, about 1.11 kWh must go in for 1 kWh to come out.

Peak electricity price: The $ per kWh price during higher-cost hours when the battery powers your home.

Off-peak electricity price: The $ per kWh price during lower-cost hours when grid charging is assumed for the non-solar share.

Net upfront battery cost after credits: Battery installed cost after subtracting the entered Tax credit or rebate percent. Eligibility for tax credits is separate from this math [1].

Mistake: Entering the post-credit price in Battery installed cost and also entering a Tax credit or rebate.
Fix: Put the before-credit installed price in Battery installed cost, then enter the credit percent only once in Tax credit or rebate.

Mistake: Using nameplate battery size for Usable battery energy per full cycle.
Fix: Use the delivered or usable kWh shown by the installer or battery specs, because some battery capacity is not available for normal use.

Mistake: Treating Full battery cycles per year as charge events instead of full cycles.
Fix: Count two half uses as one full cycle, then enter that yearly total in Full battery cycles per year.

Mistake: Putting the retail solar export value in Peak electricity price instead of Export credit.
Fix: Enter the rate you avoid during battery discharge in Peak electricity price and the credit for exported solar in Export credit.

Mistake: Leaving Battery use charged by solar at 100% when the battery is often charged from the grid.
Fix: Lower Battery use charged by solar so the remaining share is valued with Off-peak electricity price and peak use.

Mistake: Setting Round-trip efficiency to 100% just because the battery is new.
Fix: Use the expected Round-trip efficiency from the battery data sheet or installer estimate; losses matter in both value components.

• The calculator uses the rates you enter. Real electric bills can include demand charges, fixed fees, tiered pricing, taxes, and utility rules that are not modeled.
• The non-solar share is treated as off-peak grid charging used during peak-price hours. It does not optimize hour-by-hour battery dispatch.
• Battery use charged by solar is a user estimate. A different solar production pattern, home load pattern, or backup-reserve setting can change the split.
• Round-trip efficiency is applied as one average percent. Actual efficiency can vary with power level, temperature, and state of charge.
• Battery energy loss each year is applied evenly at the start of later years. The calculator does not model warranty thresholds, failures, replacements, or repair events.
• Net value over selected years is not discounted for inflation, borrowing cost, or the time value of money.
• Tax credit or rebate is a simple percent reduction. The calculator does not decide eligibility, tax liability, transferability, or timing of any incentive.
• If Year 1 net battery savings is zero or negative, or if cumulative savings do not reach the net upfront cost within Years to compare, a numeric cash payback is not reached.

How the battery value is split

The calculator first finds the net upfront cost, then estimates delivered battery energy for each year. The solar-charged share is valued as stored solar that avoids buying peak electricity, but gives up the export credit. The remaining share is valued as off-peak energy shifted to peak hours. Electricity prices and rate structures vary by customer and utility, so the calculator uses your entered rates instead of a utility lookup [2].

net_upfront_cost = battery_cost * (1 - tax_credit_percent / 100)

delivered_y = usable_capacity * cycles_per_year * (1 - annual_capacity_loss_percent / 100)^(y - 1)

solar_delivered_y = delivered_y * solar_charged_percent / 100

grid_delivered_y = delivered_y * (1 - solar_charged_percent / 100)

efficiency_decimal = round_trip_efficiency / 100

self_consumption_value_y = solar_delivered_y * (peak_rate - export_credit / efficiency_decimal)

tou_shifting_value_y = grid_delivered_y * (peak_rate - off_peak_rate / efficiency_decimal)

net_savings_y = self_consumption_value_y + tou_shifting_value_y - annual_maintenance_cost

Payback and selected-year value

Cash payback is the first point where cumulative yearly net savings recover the net upfront cost. If the cost is 0, payback is 0 years. If cumulative savings do not reach the target within Years to compare, the calculator reports that payback is not reached and still shows the selected-year net value.

payback_years = (y - 1) + (net_upfront_cost - cumulative_savings_before_y) / net_savings_y

lifetime_net_value = total_net_savings - net_upfront_cost

cost_per_delivered_kwh = net_upfront_cost / total_delivered_energy

Mini-example

Suppose Battery installed cost is $5,000, Tax credit or rebate is 30%, Usable battery energy per full cycle is 10 kWh, Full battery cycles per year is 250, Battery use charged by solar is 60%, Peak electricity price is $0.30 per kWh, Off-peak electricity price is $0.12 per kWh, Export credit is $0.08 per kWh, Round-trip efficiency is 90%, and Years to compare is 10. Net upfront battery cost after credits is $3,500. Year 1 solar self-consumption value is about $316.67, Year 1 peak/off-peak shifting value is about $166.67, and Year 1 net battery savings is about $483.33. With no battery aging or maintenance in this example, Estimated cash payback time is about 7.24 years, and Net value over selected years is about $1,333.33.