Q: What is the ROI for a battery to go with solar panels?

A: The answer to this question is very dependent on the subsidies available in your area and, in MA, it is also highly dependent on the size of the array you pair with the battery. 

Where we live in Massachusetts the subsidies for batteries are now very generous. When a battery is paired with a large array the battery can now be free. I have recently bought a pair of Generac batteries to go with each of my three arrays. I did not buy the Tesla battery because, even though the Powerwall battery is cheaper per kWh of storage than other batteries, Tesla cannot deliver batteries for several months. Since we are heading into winter, which is when the power outages are around us, the subsidies decline with time, and with today’s subsides the new batteries either save me money or work out cheaper than replacing my ancient generators, I decided to buy the batteries now. The economics of these three pairs of batteries are explained below.

When paired with a large array (20,000kWh/year in my case) the batteries (after the federal tax credit, the MA tax credit, the state subsidy (called SMART) and the Connected Solutions subsidy from our utility), are more than free – I am actually paid about $3,000 to own them.

When paired with a medium sized array (10,000kWh/year) the IRR on the battery and the array is 6.6% compared to 10% with no battery. So the battery is not free but it still makes an acceptable IRR and I will have a reliable back up which I do not have today with my old generator.

When paired with a small array (6,000kWh/year) the battery ends up costing my about $4,500. But my alternative is to buy a new generator (the old one is broken beyond repair) and pay $500 a year to get it serviced. So I think it is worth it to have back up power again.