Why Do You Need Solar with Battery Storage in 2025?

1. Severe Weather Events Are Picking Up

The United States saw more than a handful of billion-dollar weather disasters in 2024, from the New Mexico wildfires in June and July to Hurricane Beryl that hit Texas in July and knocked out power to nearly 3 million homes to Hurricanes Helene and Milton that made landfall in Florida and decimated towns in North Carolina in October, and hurricane season isn’t over yet.

As extreme weather becomes more frequent and intense, it wreaks havoc on our electric grid. From hurricanes to heat waves to wildfires, there’s no shortage of natural phenomena that can interrupt our power supply.

Installing solar with battery storage lets you use the energy your home creates at any time — regardless of what’s happening around you. Gale winds and winter storms that down power lines? Torrential downpours that flood power equipment? Safety shutoffs by your utility company? You can rest assured that you’ll still have power.*

2. More Utilities are Adopting Time-Based Rates

Time-based rates are well known in California, but utility companies in other states have begun adopting them as well. From Arizona to Massachusetts, and most recently Missouri, more utilities are charging higher rates during periods when the demand for electricity is high. The goal is twofold: to make up for declining revenue and to incentivize customers to spread out their energy consumption and alleviate stress on aging grid infrastructure.

It’s possible to shift some usage without a major inconvenience, such as doing laundry and running the dishwasher at night instead of during peak evening hours. However, some consumption during certain on-peak periods can’t be avoided, like cooking dinner and running the AC once everyone gets home and temperatures are still soaring.

If your utility enforces time of use (TOU) rates, battery storage offers protection by storing the energy your panels generate during the day and dispatching it when you need it. By setting your battery to automatically power your home during peak rate windows (typically in the evenings), you can use the sun’s energy instead of drawing from the grid.

3. Renewed Enthusiasm for Solar Leases and PPAs

In years past, low financing options enabled homeowners to buy their systems outright and take advantage of incentives like the investment tax credit (ITC). However, since the Federal Reserve started raising interest rates a few years back, the popularity of solar loans — the financing option most sensitive to interest rate hikes — began falling as market analysts saw renewed enthusiasm for leases and PPAs (where available) in the residential sector.

Despite the Fed lowering the interest rates in late 2024 for the first time in four years, energy analysts don’t expect them to retreat to the lows we’ve seen in the past decade. Therefore, they expect these third-party ownership options, like leases and PPAs, to continue regaining market share over the next five years.

What does this mean in terms of timeline?

The Inflation Reduction Act (IRA) increased the ITC to 30% through 2032 for solar and battery storage (it will then be phased out over the following two years). The extension left some homeowners wondering if it’s better to wait until technology improves and prices fall.

Recall the caveat with the ITC: This federal tax credit is only available if you buy your system outright via cash or financing with a loan.* With interest rates high and more people opting for third-party ownership options like a solar lease or power purchase agreement (PPA), these customers won’t qualify for the 30% tax credit. Therefore, if solar and storage make economic sense for you today, it won’t make less economic sense tomorrow.

4. Local Rebates, Incentives and Policies Change Frequently

While the ITC will remain in place for a decade, local incentives and rebates run out quickly. Some states offer tax credits and sales tax exemptions, while others provide property tax exemptions and allow you to sell renewable energy credits (RECs) on the open market.

Cash rebates are another local perk that may be offered at the state, municipal or utility level. These are highly competitive since there’s often designed funding available for customers. Once it runs out, it may be depleted for the year — or gone forever. Checking for local rebates early in the year gives you the best chance of harnessing these limited incentives to offset the upfront cost of installing your home solar and storage system.

As mentioned, net metering is the billing arrangement where your utility company credits your electric bill for any solar production you send to the grid. But utilities are fighting NEM policies with deep pockets. In places like California, these credits have declined so much that they’ve lowered the savings potential on solar panels alone. It now makes the most financial sense in the Golden State to add battery storage to your solar system to compensate for the loss in export credits. If net metering is at risk in your state, it may be possible to get grandfathered in, but you have to start your project soon.

5. Electricity Rates Will Only Stabilize and Increase Over Time

In 2025, the EIA anticipates residential electricity prices to average 16.6 cents per kilowatt-hour (kWh), a 2% increase from 2024, after a 2% increase from the year prior.

But residential electricity saw a bigger spike in 2022, rising nearly $1.50 from the previous year and encouraging ratepayers to find new ways to save on utility bills.

As electricity rates rise, even if the price of solar and storage remains the same, it will become more cost-effective to use the sustainable solution. Access to affordable electricity — helping to advance technological progress, mitigate climate change and improve energy reliability — is possible through solar and storage.