anatoliy_gleb/ iStock / Getty Images Plus via Getty ImagesZDNET’s key takeaways
- Solar savings depend on local rates and export credits.
- Battery storage can save and earn money, not just provide backup.
- The biggest savers cut energy costs by nearly 80%.
Your electricity bill probably went up this year. The US Energy Information Administration reports that residential electricity prices rose 6.2% over the past year, the largest increase of any sector. Rising utility bills are driving more homeowners toward solar, according to Aurora Solar’s snapshot data. But solar by itself does not guarantee immediate savings.
Habitelligence data shows that homeowners who save the most on their energy bills pair solar with battery storage and shift power use to avoid expensive peak hours. Together, these steps led to a 78% reduction in annual energy costs for the most efficient homes, and that’s the average, not a maximum.
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Panels alone don’t offer the same savings for every household. That’s why we’re exploring what separates homeowners who see savings from solar alone from those who need to pair it with storage to reach their goals.
Why solar alone doesn’t always mean savings
When rooftop solar panels generate power for your home, you use some of it right away, and the rest is generally sent back to the grid for compensation. That process of using self-generated power and earning credits for exporting what you don’t use is what saves money. However, just installing panels doesn’t guarantee economic value right out of the gate. Your savings depend on what you pay for the system, how you finance it, and whether you can store power.
1. The system itself is a big cost
Rising electric rates make solar look more attractive, but it’s not a cheap or impulsive decision. Aurora Solar found that 44% of buyers underestimated what solar would really cost them going in. That’s partly because solar doesn’t come with a fixed price tag. “Every system is bespoke,” said Chris Hopper, co-founder of Aurora Solar. “It depends on your roof, the weather, your rates, your backup needs, the pricing you get, and whether you finance it.”
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The upfront cost or how you finance the system can delay the energy bill relief you’re looking for, so it’s worth knowing what that timeline looks like. Solar, on its own, is generally a money-in / money-saved proposition, so before signing anything, you should ask about the payback period, or how long it will take for your bill savings to cover the cost of what you spent on the system.
2. The tax credit changed
The federal tax credit for homeowner-owned solar systems expired at the end of 2025, which offered a 30% credit against the cost of solar on federal taxes. The change came fast. “One thing that’s particularly painful was the really short notice that was given by Congress,” Hopper said. “Six months from the bill passing to, OK, half your incentives are gone.”
You can still access the credit indirectly by doing a lease, power purchase agreement (PPA), or a prepaid lease. With a lease, a company owns the panels, and you pay a monthly fee to lease the system. With a PPA, the solar system is also third-party owned, but you pay for the electricity it produces instead of a flat fee. A prepaid lease means paying the up-front cost while a company owns and maintains the system for a short term, like five or six years, then you have the option to buy it outright.
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All three let the company claim available tax credits as the system owner and pass some of the savings to you. Availability varies by state, so ask your installer about the options where you live.
3. Solar alone leaves you exposed to outages
Home solar systems stay connected to the grid; when the grid goes down, so does your power, even with panels on your roof. “That’s sometimes a misconception,” Hopper said. “People think, ‘I have panels on my roof, so when the grid goes out, I have power.’ It’s not. The grid goes out, and your solar goes out too, because it’s grid-tied.”
Panels generate electricity, but they can’t store it. A battery holds onto that power so you have something to draw from when the grid fails. For some households, this is where solar by itself falls short of what you actually need. If you rely on electricity for things like medical equipment or a home office, backup power can matter as much as savings on your bill.
What actually cuts your bill
Solar panels alone rarely offer the same savings as solar paired with storage and smart energy use. A battery lets you store the power your panels generate for later use instead of selling it to the grid for a low credit. The homeowners who save the most with a battery typically live in an area where the utility pays below the retail electric rate. That price difference is what Hopper says makes storage worth it.
“If you’re selling power for close to zero and then having to buy it back, you’re better off just keeping it for yourself and using your own energy,” Hopper said.
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Sean, a California homeowner I spoke to, saw that play out firsthand. “Under the state’s solar export policy, feeding power back to the grid doesn’t provide much benefit,” he said. “If you have solar alone, you are generating a ton of cheap power at noon, but you are still forced to pull from the grid during those outrageous peak hours from 4 p.m. to 9 p.m. when utilities really jack up the rates. Adding battery storage became crucial for actually maximizing the value of the solar panels.”
If your utility charges more during peak hours than it pays you for exported power, a battery is likely to help, as it did for Sean. It may help less if you live in an area where your utility pays full retail price for your excess energy.
Will solar help you save on energy bills?
Before turning to solar as the answer to rising electric bills, consider your payback period, whether the tax credit still applies to you, and if you should also install a battery. Solar alone can still deliver solid savings when your utility pays close to full retail price for the power you send back to the grid. But when that’s not the case, pairing solar with storage can make a bigger difference in savings.
Also consider how you finance the system and how that affects your long-term savings. Buying outright, leasing, signing a PPA, or choosing a prepaid lease each changes your up-front cost, monthly payment, and savings.
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Hopper’s advice is to shop around before you commit. “Get a quote, or better, get two or three to compare,” he said. From there, a reputable installer can walk you through payment options, net metering policies in your area, and your expected savings. They can also explain how rising electric rates might affect that trade-off over time.
