Installing solar isn't the only big financial decision to make about controlling home power

Ian Thomas Jansen-Lonnquist | Bloomberg | Getty Images
  • Extreme weather, climate change and aging infrastructure are resulting in more frequent power outages, make home backup power more attractive.
  • Backup systems can be powered by fossil fuels including diesel, propane and natural gas, or battery-powered, and often connected to home solar panels.
  • The costs can be steep, but incentives in the Inflation Reduction Act are among the ways that homeowners can reduce their financial outlay and ultimately generate long-term savings.

After a summer of extreme weather and wildfires and now during the peak of hurricane season, the power going out again is becoming familiar to more Americans. That means it may be a good time to consider a home backup power storage system.

The pervasiveness of extreme weather and climate change, local utility reliability and cost may all factor into this financial decision.

"Backup power may be warranted depending on regional factors and geography as well as the state of the infrastructure there," said Benjamin R. Dierker, executive director of the Alliance for Innovation and Infrastructure, a research and educational organization, in an email. 

In coastal areas, for instance, considerations include the resilience of storm or sea walls, the quality and capacity of drainage infrastructure and the electrical grid's hardiness, he said. In other areas, extreme weather conditions like high winds, tornados and ice may cause falling trees or downed lines — a risk that's significantly mitigated if there are buried utility lines rather than overhead lines, Dierker said. Pre-emptive shutdowns, due to extreme weather or other factors, can also be a consideration.

As of Sept. 11, there have been 23 confirmed weather/climate disaster events with losses exceeding $1 billion each to affect United States, according to the National Centers for Environmental Information, which has a graphic that shows the locations of these disasters. These events included two flooding events, 18 severe storm events, one tropical cyclone event, one wildfire event, and one winter storm event. 

Here's what consumers need to consider about home back-up power options:

Appliance needs during power outages

A good first step is to think about the most important appliances you are running on electricity and how long you might realistically need them to run in the event of an outage, said Vikram Aggarwal, chief executive and founder of EnergySage, which helps consumers compare clean home energy solutions.

If you have minimal backup needs, a small portable fossil-fuel generator or battery could suffice, which can cost a few hundred dollars. But if you want your home to operate as normal, you'll want to consider whole home options.

Location can be a factor since in some areas, the power goes out infrequently or for only short periods of time. In some states like California, Texas and Louisiana, however, it can be a whole different ball game. California consumers, for example, can get an up-to-date sense of outages in their area to get a sense of what their risk may be.

Fossil fuel vs. battery power

If you're not opposed to fossil fuel-powered options, there are several categories to consider based on your power needs. For lower power needs, a portable generator, which often runs on gasoline or diesel can cost a few hundred dollars to several thousand dollars. There are also higher-priced portable versions that are usually quieter and more fuel-efficient and may be able to power multiple large appliances—and for longer. How long depends in part on the appliances you're powering.

A whole home standby generator, meanwhile, is permanently installed and automatically kicks on when the power goes out. This generator type is often fueled by propane or natural gas and costs vary based on size, brand and fuel type. There are options in the $3,000 to $5,000 range, but with installation the total can be considerably higher. This could be a good option if you're expecting outages for multiple days; theoretically, the generator can run for as long as fuel is supplied, but it can be advisable to shut it down for engine-cooling purposes.

For the environmentally-inclined, battery-powered backups can be a good option for their more environmentally friendly and quieter nature. For a few hundred dollars, give or take, there are lower-priced smaller to mid-size battery options that people can purchase and that will last for several hours.

There are also battery-powered options to back up the whole home that offer many of the same functions as conventional generators, but without the need for refueling, according to EnergySage. Consumers might expect to pay $10,000 to $20,000 to install a home battery backup system, EnergySage said. This can often last for eight to 12 hours, or even longer if you aren't using it to power items such as air conditioning or electric heat.

Incentives that lower the cost of purchase and installation

When thinking about what type of backup to choose, incentives can factor into the equation. Thanks to the Inflation Reduction Act, households can receive a 30% tax credit for a battery storage installation, even if it's not paired with a solar system, Aggarwal said.

Other state and local incentives may also be available. For instance, in some markets like California, Vermont, Massachusetts and New York, utilities pay consumers to tap into their batteries during peak periods like the summer, Aggarwal said. Consumers with larger batteries—10kWh or more—may be able to earn hundreds of dollars a year, he said.

EVs as a backup power option for the home

Some electrical vehicles can be used to back up essential items, or, in some cases, a whole home.

Ford's F-150 Lightning, for example, can power a home for three days, or up to 10 days under certain circumstances, according to the company. With the required system installed, and the truck plugged in, stored power is transferred seamlessly to the home in the case of a power outage. For its part, GM recently said it would expand its vehicle-to-home bidirectional charging technology to its entire lineup of Ultium-based electric vehicles by model year 2026.

In the past, Jim Farley, Ford CEO has spoken about how the F-150 Lightning's abilities as a source of backup power for homes and job sites have been a real "eye-opener" for the automaker. 

"If you're contemplating spending $10,000 on a whole home gas generator system, why not think about an EV with this capability instead?" said Stephen Pantano, head of market transformation at Rewiring America, a nonprofit focused on electrifying homes, businesses and communities.

Consumers in the market for a new stove might also consider an induction model with an integrated battery to power it or other items such a fridge on an as-needed basis, Pantano said. "This opens up new possibilities for power backups that weren't there before."  

Solar-plus-storage can lead to long-term savings

Home solar panels are becoming more popular, but most are connected to the grid, and you need some kind of battery storage in order to have backup power, said Sarah Delisle, vice president of government affairs and communications for Swell Energy, a home energy solutions provider.

That's where a solar-plus-storage system can come in handy. It allows people to use electricity generated from their solar panels during the day at a later point, which can be particularly useful for people who live in areas where there are frequent power outages, said Ted Tiffany, senior technical lead at the Building Decarbonization Coalition, a group that promotes moving buildings off fossil fuels.

A solar-plus-storage system costs about $25,000 to $35,000, depending on the size of the battery and other factors, according to the U.S. Dept of Energy. It's easier and more cost-effective to install panels and the battery at the same time, but it's not required. Homeowners who have already installed solar panels and want to add storage, might expect to pay between $12,000 to $22,000 for a battery, according to the Energy Department. Consumers who purchase a battery on its own or with backup are eligible for federal tax credits. Some states provide additional solar battery incentives

Also consider the long-term savings potential, Tiffany said. He has a family member who, with electrical upgrades, spent around $8,000 on a fossil fuel-powered whole home generator. Putting that money into solar instead might have been more economical because of the energy savings over time and tax incentives, he said. 

Consumers can visit EnergySage to find contractors and get information about solar and incentives. They can also visit, Switch is On, which helps consumers find information on electrification and efficiency measures for home appliances that supports the renewable energy integration.

Copyright CNBC
Contact Us