Home Battery Installations Rise Despite End of Federal Tax Credits

Home battery installations in the U.S. continued to grow in early 2026, defying expectations after federal tax credits expired at the end of 2025. According to a BloombergNEF analysis of U.S. Energy Information Administration data, households installed 673 megawatts of battery storage in the first quarter of 2026, marking a rise from the previous quarter’s record sales, which were driven by last-minute purchases before incentives ended. ## High Electricity Costs and State Policies Fuel Growth The resilience of the home battery market is attributed to two key factors: rising utility bills and supportive state policies. With electricity costs climbing nationwide, homeowners are increasingly turning to batteries-often paired with rooftop solar-to reduce dependence on the grid. Additionally, state-level incentives have played a significant role in sustaining demand. California, which has long encouraged the pairing of storage with solar, accounted for roughly three-quarters of home battery installations in both 2024 and 2025. Meanwhile, Hawaii, which has the highest electricity rates in the country, saw a surge in installations in Q1 2026 after launching a new storage incentive program last year. ## Solar Market Struggles as Battery Adoption Thrives While home battery installations have thrived, the rooftop solar market has faced challenges. The One Big Beautiful Bill Act, passed by Republicans last year, eliminated long-standing tax credits that previously reduced the cost of solar and storage systems by 30%. As a result, BloombergNEF forecasts that residential solar installations will drop to their lowest level since 2020. Despite this setback for solar, the growth of residential energy storage underscores the increasing importance of batteries in the U.S. electricity landscape. Large-scale battery projects, which retained tax credits under the new law, are also expanding rapidly. Industry observers expect home battery adoption to continue its upward trajectory as more states implement supportive policies and consumers seek ways to manage rising energy costs.