Key Takeaways

  • Store your solar when the on-peak price × 0.9 minus the export credit exceeds your battery wear cost per kWh
  • Export when your export credit is close to retail price or higher than the value of storing after losses and wear
  • Time big loads (EV, laundry, water heating) to the lowest-price hours; use midday if export credits are low, nights if off-peak rates are cheapest
  • Typical lithium-ion round-trip efficiency is about 90% and the federal 30% battery tax credit applies to ≥3 kWh systems through 2032

What You Need to Know

  • U.S. Energy Information Administration data shows average residential electricity prices around 16¢/kWh, with many utilities using time-of-use (TOU) pricing that peaks in the evening. In high-cost states, posted on-peak rates commonly reach 40–60¢/kWh while off-peak can be 10–30¢/kWh according to current utility tariffs.
  • Most home lithium-ion batteries deliver roughly 85–95% round-trip efficiency; using 90% as a planning number is reasonable based on national lab testing.
  • Export credits vary widely. Under net billing and time-varying export tariffs adopted in several states, midday export values can be only 2–10¢/kWh, while some locations still offer credits near the retail rate. Utility and commission tariffs are the governing, official source for your numbers.
  • The Residential Clean Energy Credit (Internal Revenue Code Section 25D) provides a 30% federal tax credit for standalone battery storage of 3 kWh or more through 2032, per IRS guidance.
  • Batteries degrade over time. A practical way to price wear is to divide installed cost by expected lifetime throughput. Example: a $8,000, 10 kWh battery cycled 4,000 times delivers ~40,000 kWh; wear cost ≈ $0.20/kWh. With longer life or lower cost, this can be 5–15¢/kWh according to current market figures.

How to Save Money

  1. Find your numbers. Write down your on-peak price (P_peak), off-peak price (P_off), export credit (C_export), and whether grid-charging your battery is allowed under your interconnection and rate. If you do not know your battery wear cost, start with 0.05–0.10 $/kWh as a conservative estimate.
  2. Store solar instead of exporting when 0.9 × P_peak − C_export − wear cost > 0. Example: P_peak = $0.35, C_export = $0.05, wear = $0.05 gives 0.9×0.35 − 0.05 − 0.05 = $0.215/kWh of value. If you shift 8 kWh into the peak window, that’s about $1.72 per day saved.
  3. Export immediately when C_export ≥ 0.9 × P_peak − wear cost. Example: With retail-rate export at $0.16 and P_peak = $0.25, 0.9×0.25 − 0.05 = $0.175; since $0.16 < $0.175 by only 1.5¢, storing yields little after wear. Exporting is often simpler and comparably profitable.
  4. Arbitrage with grid charging (if allowed) when P_peak − P_off/0.9 − wear cost > 0. Example: P_off = $0.12, P_peak = $0.40, wear = $0.05 gives 0.40 − 0.12/0.9 − 0.05 ≈ $0.217/kWh. Charging 8 kWh nightly yields about $1.74 per cycle.
  5. Time your big loads to the cheapest hours. If export credit at noon is 5¢ but night off-peak is 15¢, run EV charging or laundry at midday so your solar offsets retail purchases. If off-peak nights are cheapest, schedule them overnight and save battery for the 4–9 pm peak window.
  6. Keep a backup reserve. Set a 20–30% state-of-charge reserve if you face outages or storms. In normal conditions, lowering reserve increases savings by allowing deeper peak discharge.
  7. Use utility and aggregator programs. Many utilities offer demand response or virtual power plant participation that pays bill credits for letting them briefly discharge your battery during peaks. Annual payments commonly range from ~$100 to $500 depending on events and size, per utility program terms.
  8. Recalculate each season. TOU and export values can change by season and weekend/weekday. Re-run the simple tests above when your tariff updates to keep savings maximized.

Bottom Line
For most solar homes on modern tariffs, the math favors storing midday solar and discharging during the evening peak when export credits are low, exporting when credits approach retail, and charging from the grid overnight only when the TOU spread comfortably beats battery losses and wear. Combine clear price signals, a 90% efficiency assumption, and a realistic wear cost to decide—then automate schedules in your inverter or app to lock in the savings.