Skip to main content
How Does the Government Incentivize Solar Backup Power?
October 1, 2023 at 4:00 AM
How Does the Government Incentivize Solar Backup Power?

If you’re considering energy storage or solar energy, some incentives and rebates can help make it more affordable. These include federal incentives to state rebates and utility programs and solar-adjacent incentives. This article will discuss a few ways that storage incentives can help lower the cost of installing a battery.

Storage incentive tax credit

Our research found that the best storage incentive is the federal investment tax credit (ITC). This ITC provides a 30% credit on the cost of your solar system and the same benefit to storage systems under certain conditions.

Because of the Inflation Reduction Act, residential storage systems that have over 3 kilowatt-hours (kWh) are eligible. Before 2023, batteries were required to be paired with solar and had to be powered by solar at least 75% of the time for five years to qualify for the ITC. These savings can typically reduce the cost of your system by $3,000 to $5,000.

State-level solar battery tax credits and incentives

Several states are offering energy storage rebates to help grow the storage energy. These incentives are usually an upfront rebate or a performance-based incentive. For rebates, states offer a direct cash payment once your battery is installed and connected to the grid. Several states now offer performance incentives as well.


California has the best-known state-level storage incentive in the U.S., known as the Self-Generation Incentive Program (SGIP). It provides a dollar per kilowatt rebate for the energy storage installed.


As one of the only states in the U.S. offering a storage-specific tax credit, residents can recover 30% of the cost of their storage system, up to $5,000 for residential batteries and up to $150,000 for commercial batteries.

New York

The state of New York has policy targets for energy storage and offers incentives for homeowners who are residents of Long Island. It provides a similar rebate-style incentive as the SGIP program in California, with the state offering a $250 per kilowatt rebate to Long Island residents.

Other storage incentives

In addition to federal and state incentives, some utility companies are providing incentives to homes and businesses that install storage. As of now, most utility-specific incentives are in the Northeast.

The ConnectedSolutions program

Eversource or National Grid customers in Connecticut, Massachusetts, New Hampshire, and Rhode Island can participate in the ConnectedSolutions program. This program pays you an annual incentive for access to the stored energy in your battery.

This structure is designed for two things: first, it does not pull from your battery if a major storm is on the way so that you will have backup power, and second, it’s designed to cover the cost of your battery in five years. This means that the incentive will pay you to have a battery over the ten years of the program.

Green Mountain Power storage program

While the state of Vermont does not have any state-specific incentives, the leading utility company, Green Mountain Power, offers a few different programs. A bring-your-own device program provides a rebate for whatever battery you wish to install, along with the Tesla Powerwall Pilot program.

Switch to solar backup power with Solar-Verse

At Solar-verse, we provide professional solar panel installation, assessments, and solar backup power for homeowners and business owners across Maryland. We pride ourselves on being a customer-centric company, always seeking our client's best interests.

If you're interested in learning more about solar or getting a quote for your home or business, our expert solar technicians are standing by to answer any questions you may have. Contact us at (443) 455-0313 or through our contact form.