The federal homeowner solar tax credit expired at the end of 2025, and there's no equivalent federal credit for standalone home batteries. But several states have filled part of that gap with programs worth $1,000–$4,000 per system — and the rules, eligibility, and amounts vary significantly by state. Here's what's actually available in 2026.
Disclaimer: Incentive program details are based on program documentation as of early 2026. Program availability, amounts, and eligibility rules change frequently — some programs have waitlists or limited annual funding. Confirm current program status with your state energy office or a licensed installer before purchasing. The federal Section 25D residential energy credit expired December 31, 2025. Section 30C (EV charger) expires June 30, 2026. Get 3+ installer quotes.
Key Takeaways
- California SGIP pays up to $200/kWh for income-qualified buyers and $150/kWh standard — worth $2,025–$2,700 on a Powerwall 3 (CPUC)
- Massachusetts Connected Solutions pays ~$225/kW in ongoing demand-reduction incentives — a performance-based annuity, not a one-time rebate
- New York and Arizona have active programs; most other states have limited or no dedicated battery incentives
- No federal Section 25D credit for residential buyers in 2026 — state and utility programs are the only available subsidies
Why the Federal Credit Gap Matters
Section 25D, the 30% federal residential clean energy credit, covered both solar and battery storage for homeowners through December 31, 2025. Starting January 1, 2026, new residential battery installations no longer qualify. The commercial equivalent (Section 48E) remains active through 2027 but applies to third-party-owned systems under leases and PPAs — not homeowner-owned batteries.
This is a meaningful change. On a $15,000 installed Powerwall 3, the 30% credit would have been worth $4,500. Without it, the full cost falls on the homeowner. State programs can replace some of that value — but only in certain states.
The map below describes what's actually available by state in 2026. States not listed have no meaningful battery-specific incentive program at the time of writing.
California: SGIP (Self-Generation Incentive Program)
California's SGIP is the most generous battery incentive program in the U.S. in 2026. Administered by the California Public Utilities Commission, it provides per-kWh rebates on installed battery storage.
| SGIP Tier | Incentive | Value on 13.5 kWh Battery | Key Requirements |
|---|---|---|---|
| Standard residential | $150/kWh | ~$2,025 | Must be on TOU rate; system >1 kWh |
| Income-qualified (SGIP Equity) | $200/kWh | ~$2,700 | CARE/FERA eligibility, SGIP Equity Budget |
| Equity Resiliency (high fire risk + medical baseline) | Up to $1,000/kWh | Up to $13,500 | PSPS-affected area + CARE/medical rate |
The Equity Resiliency tier is the most valuable program in the U.S. for eligible households — up to $1,000/kWh essentially covers the full battery cost for households in high fire-risk areas who rely on medical equipment or qualify for income-based rates. Availability is limited; there's a waitlist.
Key SGIP rules: The application must be submitted and approved before installation begins. You cannot retroactively claim SGIP after the system is installed. You must be enrolled in a TOU rate plan for the standard tier. The program runs through budget cycles, and some utility territories exhaust their allocation — apply early.
According to Lawrence Berkeley National Laboratory's tracking, California accounts for the majority of residential battery installations in the U.S. — the SGIP program is a primary driver.
Massachusetts: Connected Solutions
Massachusetts takes a different approach from California — instead of an upfront rebate, the Connected Solutions program (run by National Grid, Eversource, and other utilities) pays battery owners on an ongoing basis for participating in demand-response events.
During summer demand peaks, the utility calls on battery owners to discharge their stored energy to reduce grid load. Each kW of demand reduction is worth approximately $225/kW per season — a figure that varies by utility and program year.
| Battery Size | Estimated Demand Response Capacity | Annual Connected Solutions Value |
|---|---|---|
| 1 Powerwall 3 (11.5 kW) | ~5–7 kW usable for demand response | ~$1,125–$1,575/yr |
| Enphase 5P x2 (7.68 kW) | ~4–5 kW usable | ~$900–$1,125/yr |
| FranklinWH aPower (10 kW) | ~5–7 kW usable | ~$1,125–$1,575/yr |
A Powerwall 3 enrolled in Connected Solutions can generate $1,000–$1,500/year in ongoing payments — significantly better than a one-time rebate on a long ROI horizon. Over 10 years, that's $10,000–$15,000 in cumulative value. Massachusetts's electricity rates are among the highest in the U.S. (~$0.28/kWh), which also improves TOU arbitrage value.
New York: NYSERDA and Utility Programs
New York offers battery incentives through multiple channels, making eligibility complex but the total value potentially significant.
Con Edison Battery Storage Program: Available in Con Edison's service territory (NYC, Westchester). Provides incentives for residential battery storage — amounts vary by program year and system configuration. Contact Con Edison for current incentive levels.
NYSERDA programs: The New York State Energy Research and Development Authority administers several programs that can combine with utility incentives. Low-income households may qualify for enhanced support through the Clean Energy Fund.
NY-Sun: While primarily a solar incentive, NY-Sun can interact with battery storage in solar + storage combined installs. Confirm with your installer which programs stack.
Total New York incentives for a combined solar + battery system can reach $3,000–$6,000 depending on territory and income qualification.
Arizona: APS Battery Incentive
Arizona Public Service (APS) offers a battery storage incentive program for customers on qualifying rate plans. As of early 2026, the rebate ranges from $500–$2,000 per installed system depending on battery capacity and program cycle availability.
| APS Program Requirement | Details |
|---|---|
| Eligible rate plan | Must be on a qualifying TOU or demand rate |
| Minimum battery size | Typically 3 kWh or larger |
| Installer requirement | Licensed Arizona electrical contractor |
| Application timing | Pre-install application required |
Arizona's high solar resource (6+ peak sun hours in Phoenix) makes battery + solar particularly effective even without strong incentives. The APS rebate reduces first-year cost; TOU arbitrage on APS's demand rates provides ongoing savings.
Hawaii: Unique Battery Incentive Environment
Hawaii has consistently had the highest electricity rates in the U.S. — over $0.40/kWh on Oahu — which makes battery storage economics compelling even without strong incentives. Hawaii's net metering replacement program (Customer Grid Supply Plus) pays below-retail export rates, pushing homeowners toward battery storage for self-consumption.
Hawaii also has a Green Energy Money $aver (GEM$) program that provides on-bill financing for energy storage — not a direct rebate, but it reduces upfront cost by spreading payments across the utility bill.
States with Limited or No Battery Incentives
Most U.S. states have no dedicated residential battery incentive program as of 2026:
| State Category | Examples | Battery Incentives |
|---|---|---|
| Active programs | CA, MA, NY, AZ, HI | $500–$13,500 (varies) |
| Emerging programs | OR, CO, NJ | Limited; check state energy office |
| No dedicated incentive | TX, FL, GA, NC, OH, most others | $0 (utility may offer separate programs) |
In states without incentives, battery ROI depends entirely on TOU rates and solar pairing. Texas, despite having no state battery incentive, has some utilities offering TOU rates — check with Oncor, CenterPoint, or your retail electric provider for rate plan options.
Before purchasing, run the Solar ROI Calculator to model combined solar + battery returns for your state, and check the Panel Capacity Checker to confirm your panel supports a battery installation.
Bottom Line
California, Massachusetts, and New York offer the clearest ROI case for home batteries in 2026 because of their incentive programs combined with high electricity rates. Arizona and Hawaii are compelling due to rate structure and solar resource, even without top-tier incentives. In flat-rate, no-incentive states, battery storage is a harder financial case — backup value and TOU arbitrage need to carry the full ROI without any subsidy offset.
Check your state program status before contracting. SGIP applications close before installation, and limited-budget programs fill up.
Related Guides
- Home Battery Storage Cost in 2026 — Full cost breakdown for all major battery brands and installation variables.
- Home Battery Storage ROI 2026 — Whether a battery pencils financially across backup, TOU, and solar scenarios.
- Net Metering Guide 2026 — How state net metering rules affect the solar + battery value equation.
- Is Solar Worth It in 2026? — Solar-only ROI analysis including state incentive programs.