Payback is a range, not a fact. The same battery can pay back in 8 years or never, depending on your export credit, evening load and how hard you cycle it.
Degradation and replacement decide the long-run answer. A battery that lasts 15 years and one that lasts 8 can have the same sticker price and completely different economics.
Electricity savings are only one source of value. Backup power, avoided generator fuel and resilience are real, but they should be valued separately rather than hidden inside a payback number.
What the battery ROI calculator answers
This is the deep financial model behind the simpler grid-versus-battery comparison. It runs the same solar system with and without a battery, year by year, and reports:
- Annual electricity savings and a realistic payback period.
- Ten-year net benefit after the battery cost, replacements and maintenance.
- Levelised cost of stored energy (LCOS) in $/kWh delivered.
- Battery life, year-10 capacity and lifetime throughput.
- Battery versus spending the same money on more solar.
- A recommended battery size based on night load, backup load and surplus.
It is a decision-support model, not an investment guarantee. The point is not to produce one precise payback figure; it is to show which assumption the answer is most sensitive to.
Inputs: the five that matter most
1. Solar size and monthly consumption
The battery can only store surplus solar. If the array is small relative to daytime load, there is nothing left to charge with. If the array is large and the export credit is poor, there is plenty of surplus and storage looks better. The calculator keeps the solar system identical in both scenarios, so the comparison isolates the battery.
2. Tariff and export credit
Every delivered battery kWh avoids an import at your tariff and gives up an export credit. The value of cycling is approximately:
If the tariff is $0.15 and the export credit is $0.05 with 95% efficiency, each delivered kWh is worth about $0.097. If exports are not paid at all, it is worth the full $0.15. That difference alone can halve the payback period.
3. Usage pattern and backup load
The daytime share sets how much solar is consumed directly and how much is available to store. The backup load (kW you want to run during an outage) does not change the energy economics much, but it constrains the minimum battery size and power rating. A battery that is economically marginal may still be the right purchase if it keeps a fridge, lights and fans running through a six-hour outage.
4. Chemistry and usable capacity
| Preset | Round-trip efficiency | Usable depth of discharge | Typical role |
|---|---|---|---|
| Lithium LFP | 95% | 90% | Daily cycling, high cycle life, lower maintenance. |
| Tubular lead-acid | 80% | 50% | Lower upfront cost, shorter life, deeper derate. |
| Custom | Datasheet | Datasheet | When you have the manufacturer’s actual values. |
Usable energy is nominal × DoD. A 10 kWh LFP bank gives about 9 kWh of usable storage; a 10 kWh tubular bank gives about 5 kWh. Comparing them on sticker kWh is misleading.
5. Life, degradation and replacement
The model takes the shorter of calendar life and cycle life:
Year-10 capacity = 100% − (annual degradation × 10), floored at the warranty end capacity
Delivered energy and savings scale with the remaining capacity each year. Replacements are charged at the start of the replacement year, and the new battery starts again at 100%. This is a simplified annual model; real batteries degrade non-linearly and replacement timing depends on warranty terms and actual cycling.
The financial model
10-year net benefit = cumulative savings − installed cost − replacements − maintenance
LCOS = (installed price + discounted replacement costs) ÷ discounted kWh delivered
NPV and IRR use the discount rate you set. Discounted payback is the first year the cumulative discounted cash flow turns positive. LCOS is the fair way to compare storage with the grid: if the battery delivers energy at $0.28/kWh and the grid sells it at $0.15/kWh, the battery is losing money on every cycle, even if the monthly bill looks lower.
A worked example that does not flatter the battery
Take a 10 kWh LFP battery costing $6,000, 95% round-trip efficiency, 90% DoD and one full cycle per day. Assume 8 kWh delivered per day, a $0.15 tariff and no export payment:
Annual savings ≈ 2,920 × $0.15 = $438
Simple payback ≈ 6,000 ÷ 438 ≈ 13.7 years
With 8% tariff escalation, cumulative savings reach $6,000 in about 9–10 years
A $4,000 replacement at year 10 pushes the 10-year net negative even with escalation
Now change one assumption: the utility pays $0.05/kWh for exports. The value per delivered kWh falls to about $0.097, annual savings fall to roughly $283, and simple payback stretches beyond 20 years. The battery is now a backup purchase, not an electricity-saving purchase.
Battery versus more solar
The calculator compares the same budget spent two ways: the battery, or extra panels at the installed $/kWp you specify. This is often the most useful chart on the page.
- More solar wins when exports are paid reasonably, roof space is available and the goal is total energy.
- The battery wins when exports are capped at zero, evening load is high and the grid cannot be used as storage.
- Neither wins when the tariff is low, the battery is oversized and the array already matches daytime load.
Do not compare a battery with “nothing”. Compare it with the best alternative use of the same money, which is usually more generation or a smaller loan.
Reading the recommendation
The “help me find the right size” mode estimates a bank from night load, backup load, solar surplus, DoD and efficiency. Treat it as a starting point, not a specification:
- Night load sets the energy the battery must deliver.
- Backup load sets the minimum power rating and surge capability.
- Surplus sets how much energy is actually available to charge it.
- DoD and efficiency convert nominal kWh into delivered kWh.
A battery sized only from the solar surplus will be too small for backup. A battery sized only from backup load may never fill. The recommendation tries to satisfy both, but the installer must confirm the inverter compatibility, charge/discharge limits and warranty conditions.
Where the model stops
Use the result to reject bad purchases and to identify the assumptions worth verifying. If the answer flips between the conservative and high-value scenarios, you do not have a robust case yet. If it only works with a subsidy, say so explicitly rather than presenting the subsidised payback as the economics of storage.
Frequently asked questions
What is a good payback period for a solar battery?
There is no universal number, but a battery that pays back in under 10 years on electricity savings alone is strong; 10–15 years is common; beyond 15 years the case usually depends on backup value, subsidies or a very high tariff. Compare the payback with the battery’s warranty life — a 12-year payback on an 8-year warranty is not a payback at all.
What is LCOS and why does it matter?
LCOS is the levelised cost of stored energy: the total installed and replacement cost divided by the discounted kWh the battery delivers over its life. It lets you compare storage with the grid on the same unit basis. If LCOS is higher than the tariff you are avoiding, the battery loses money on every cycle, regardless of how the monthly bill looks.
How does battery degradation affect savings?
As capacity fades, the battery delivers fewer kWh each year, so savings decline. The model applies linear annual degradation from 100% down to the end-of-warranty floor and scales delivered energy accordingly. Real degradation is often faster in hot climates and at high states of charge, so check the manufacturer’s warranty curve rather than assuming a straight line.
Should I buy a battery or more solar panels?
If your goal is to reduce grid imports and you have usable roof space, more solar usually delivers a better return — especially if exports are paid. A battery is better when exports are capped or unpaid, when evening load is high, or when backup power has value. The calculator’s battery-versus-more-solar comparison prices both uses of the same budget.
Does the calculator include backup power value?
Yes, optionally. You can enter a value per outage hour and the number of outage hours per year. The backup value is reported separately from electricity savings so you can see how much of the case depends on resilience rather than arbitrage. If you leave it at zero, the result is electricity economics only.
Why does my payback differ from the installer’s estimate?
Common reasons are a higher assumed export credit, a lower battery price, a longer life, no replacement cost, no maintenance, a steeper tariff escalation or a battery sized to a load that does not actually exist. Ask which assumptions the installer used and enter the same ones here. If the result only works with assumptions you cannot verify, treat it as a sales estimate rather than an economic case.