The great home battery financing experiment

Home batteries are getting more attention from utilities and companies looking to sign homeowners up for programs that use those batteries as backup grid power during high-demand periods, sometimes called virtual power plants. Several new financing models have emerged, and they differ mainly in who owns the battery and who covers the upfront cost.

In New Jersey, utility PSE&G just launched GridSmart, which gives homeowners a $5,000 incentive toward buying and installing a battery, plus 0% financing for the rest of the cost through their utility bill. You'd own the battery, but PSE&G can draw on it to reduce strain on the grid at peak times. The program starts with Tesla and Enphase batteries. Other utilities use different setups: Evergy in Missouri owns the batteries itself and charges customers a small monthly lease fee, while Green Mountain Power in Vermont installs and leases batteries to homeowners while keeping control over how they're used for the grid.

Separately, companies like Base Power, Palmetto, and Sunrun offer a "third-party ownership" option, where the company owns the battery and the homeowner pays a subscription or lease fee instead of buying the system outright. Analysts expect this model to become the most common way homeowners get batteries going forward, partly because a federal tax credit that let homeowners claim 30% of the cost of home batteries ended last year. A separate tax credit still available to third-party owners may help keep those subscription prices down. If you're considering a home battery, it may be worth checking what your own utility or state offers, since programs and costs vary widely.