The Federal Home Battery Credit Ended. Here's How to Read Usable kWh

Batteries installed in US homes since January 1, 2026 no longer qualify for the 30% federal Residential Clean Energy Credit, which Public Law 119-21, signed July 4, 2025, ended for expenditures made after December 31, 2025. At the same time, the Energy Information Administration's September 9, 2026 outlook puts the average US residential electricity price at 18.2 cents per kWh this year, up from 17.3 cents in 2025. For anyone pricing a battery now, the number that matters is the energy it can actually deliver to the house, which is smaller than the rated capacity on the spec sheet and shrinks with reserve settings, conversion losses and age.

Key takeaways

Rated capacity is what the cells hold; usable capacity is what the system lets you discharge; deliverable energy is usable capacity minus your reserve, and minus inverter losses if usable is stated on the battery (DC) side.
In the illustrative example below, a 13.5 kWh-rated battery with 13.0 kWh usable and a 10% reserve delivers 11.7 kWh, which runs an essential-load list of about 5.8 kWh per day for roughly 49 hours; at 70% retained capacity in year 10 the same list runs about 34 hours.
Round-trip efficiency mostly changes what it costs to refill the battery: at 90%, putting 11.7 kWh back takes 13.0 kWh, a loss worth up to about $86 a year at 18.2 cents per kWh if the battery cycles that much every day.
Power (kW) and energy (kWh) are separate limits: a battery with kWh to spare can still shut down if motor starting surges exceed its peak kW rating.
The federal credit turns on the installation completion date, so a battery paid for in 2025 but installed in 2026 earns no credit.

What it means for you

Buying a battery for outage backup: size from essential loads in kWh per day and a target outage length, using usable capacity after reserve and 10 years of fade (worked example below).
Pairing with solar to shift usage: the everyday reserve is all you have if the grid fails after an evening of cycling; coupling and round-trip efficiency decide how much solar energy survives storage.
Already own a battery: a 2025 installation is claimed on the 2025 return (see the FAQ). Check the warranty's retained-capacity percentage and any throughput cap, which daily cycling can reach before the year limit.
Renters and condo owners: a fixed installation depends on the owner's or association's approval. For 2025 installations, the IRS allowed the credit on a main home whether owned or rented, but not to landlords who do not live in the home. The capacity math applies to any battery backup.

Rated, usable and deliverable kWh

A kilowatt-hour (kWh) is energy: 1 kW for one hour. The DOE Energy Storage Handbook chapter on testing from Sandia National Laboratories notes that "capacity" is often used loosely as if it meant rated energy, which it defines as the energy a system supplies at a specified rate over its operational range.

Three numbers, three meanings

Term	What it describes	What reduces it
Rated or nominal capacity	The energy the cells are built to hold, usually on the label	Nothing on day one; it is the starting reference
Usable capacity	Energy the system allows you to discharge between its upper and lower state-of-charge limits	Manufacturer limits that protect the cells; fades with age
Deliverable energy	AC energy that actually reaches your outlets in a given situation	Your reserve setting, inverter losses, standby draw, temperature, fade

Depth of discharge (DoD) links the first two. A report on residential solar-plus-storage from the National Renewable Energy Laboratory (now the National Laboratory of the Rockies) defines it as the share of nominal energy capacity that may be discharged; an 80% DoD means 80% of nominal capacity is usable. A battery rated 13.5 kWh with 13.0 kWh usable has an effective DoD of about 96%, so 0.5 kWh is held back by design.

The DOE labs' test protocol, PNNL-22010 Rev. 2, measures stored energy by discharging at rated power down to the manufacturer's lower state-of-charge limit. So a usable figure is tied to a discharge rate and test conditions; spec sheets that say where energy is measured (battery terminals or AC output) and at what temperature are easier to compare.

Reserve settings

A backup reserve is a percentage of usable capacity kept in the battery, and how it behaves differs by system, so check the manual. If it is a floor the battery never goes below, it reduces deliverable energy in every outage. If it is a floor for everyday solar or rate-shifting that is released when the grid goes down, it is the only energy available when an outage begins after a day of cycling. Either way, a 10% reserve on a 13.0 kWh battery is 1.3 kWh.

Power, efficiency and temperature

kW is not kWh

Energy (kWh) decides how long a battery lasts; power (kW) decides what it can run at once. PNNL-22010 defines rated continuous discharge power as the rate a system can sustain across its whole specified state-of-charge range, and the same protocol tests peak power separately over durations of minutes. The lab's 2025 Annual Technology Baseline uses a 5 kW / 12.5 kWh system as its representative residential battery, a 2.5-hour device at full power.

Motors in refrigerators, furnace blowers and well pumps draw more power for a moment at startup than while running, and a combined surge above the battery's peak limit can shut the system down. Putting only essential circuits on a separate backed-up panel limits which motors the battery may have to start at once.

Round-trip efficiency and coupling

Round-trip efficiency (RTE) is the useful energy you get out divided by the energy you put in over one charge-and-discharge cycle under normal operating conditions (PNNL-22010). The 2025 Annual Technology Baseline adopts 85% as representative for residential lithium-ion systems, though products publish their own figures. Because losses occur on the way in and out, RTE matters most for daily cycling and much less for a full battery waiting for a storm.

Coupling changes the number of conversions. An AC-coupled system converts solar power from DC to AC and back to DC to charge the battery; a DC-coupled system charges it with one conversion. NREL's residential study concluded that DC coupling is generally more efficient when solar energy is mostly stored for later, and AC coupling is generally more efficient when solar output is mostly used as it is produced. Adding a battery to existing panels was typically done with AC coupling.

Heat and cold

Sandia's testing chapter states that battery capacity depends on discharge rate and temperature, and identifies high temperature as a factor that accelerates degradation, which is why lab aging tests raise temperature to speed up wear. A battery in an unconditioned garage may deliver less than its rated usable energy on a very cold night and may age faster in a hot one. Check the spec sheet's operating temperature range against the installation location.

Worked example: today vs year 10

Illustrative example. The battery below is hypothetical, with round numbers chosen to show the arithmetic; it is not any specific product. Rated capacity 13.5 kWh, usable capacity 13.0 kWh, round-trip efficiency 90%, backup reserve 10% held back during the outage, and 70% of original capacity remaining after 10 years.

Deliverable kWh = Usable kWh × SOH × (1 − Reserve) × η_out
Backup hours    = Deliverable kWh ÷ Average essential load (kW)
Average load kW = Essential kWh per day ÷ 24

Usable kWh = usable capacity when new
SOH        = state of health, the share of original capacity remaining (1.00 new, 0.70 in year 10)
Reserve    = backup reserve kept in the battery, as a fraction
η_out      = discharge efficiency; 1.00 if usable kWh is stated at the AC output,
             about √RTE (0.95 at 90% RTE) if it is stated on the battery side

The √RTE adjustment assumes losses split evenly between charging and discharging, which is an approximation. Multiplying a full battery's usable energy by the whole 90% RTE would count the charging loss that already happened before the outage started. The formula also leaves out the system's own standby draw, which PNNL-22010 measures separately as a standby energy loss rate: every 10 W of continuous standby draw uses 0.24 kWh a day, so check the spec sheet and subtract it for long outages.

Essential loads

Daily energy for each appliance is watts × hours of use per day ÷ 1,000, the method in a Virginia Tech Cooperative Extension guide. For a refrigerator, the yellow EnergyGuide label required under the FTC Energy Labeling Rule gives estimated kWh per year; the DOE Building America Solution Center shows a label reading 630 kWh per year, about 1.7 kWh per day. The wattages and hours below are illustrative; your own appliances can differ widely.

Load (illustrative)	Assumption	kWh per day
Refrigerator	630 kWh per year ÷ 365	1.73
Furnace blower (gas furnace)	400 W × 8 hours	3.20
LED lights	6 bulbs × 10 W × 6 hours	0.36
Modem and router	20 W × 24 hours	0.48
Total	Average draw 0.24 kW	5.77

Results

Scenario	New battery	Year 10 (70%)
Usable capacity	13.0 kWh	9.1 kWh
Deliverable after 10% reserve (usable stated at AC output)	11.7 kWh, about 49 hours	8.2 kWh, about 34 hours
Deliverable if usable is stated on the battery side (×0.95)	11.1 kWh, about 46 hours	7.8 kWh, about 32 hours
Outage starts with only the reserve left	1.3 kWh, about 5.4 hours	0.9 kWh, about 3.8 hours

The new battery covers about two days of this load list, and about one and a half by year 10. Fade costs about 15 hours, far more than the 2 to 2.5 hours that depend on where usable energy is measured. The biggest swing is the reserve: a battery that has been cycling for solar or time-of-use savings and sits at its 10% floor when the grid fails offers about 5 hours, not 49. Raising the reserve before a forecast storm, where the system allows it, closes most of that gap.

Recharging matters too. Refilling 11.7 kWh at 90% RTE takes 13.0 kWh from solar or the grid. If the battery cycles that much every day, the 1.3 kWh lost per cycle comes to about 474 kWh a year, roughly $86 if valued at EIA's projected 2026 average residential price. The real cost is lower when the lost energy is solar output that would otherwise have earned a smaller export credit.

Sizing for days of autonomy

Reversed, the formula gives the usable capacity needed for a set number of days without grid or solar power:

Usable kWh needed = (Essential kWh per day × Days) ÷ ((1 − Reserve) × SOH × η_out)

Example: (5.77 × 2) ÷ (0.90 × 0.70 × 1.00) = 18.3 kWh usable

Two days of this load list in year 10 takes about 18.3 kWh usable at purchase, versus about 12.8 kWh if two days are needed only while the battery is new. Solar recharging during an outage extends these figures but depends on weather, and some systems cannot recharge from solar once fully drained.

Warranties, codes and tax rules

How warranties count fade

Battery warranties are written around up to three limits: a term in years, a retained-capacity percentage promised at the end of that term, and in some contracts a cap on total energy throughput (MWh discharged), with coverage ending at whichever limit comes first. As an illustration, a hypothetical 30 MWh throughput cap would be reached in about 7 years by a battery discharging 11.7 kWh every day, before a 10-year term ends.

Safety listings and code limits

UL 9540 is the safety standard for energy storage systems and equipment, and the 2021 residential code requires a home system to be listed and labeled to it, with narrow exceptions such as repurposed electric-vehicle batteries. UL 9540A is a separate test method for evaluating thermal runaway fire propagation; UL Solutions states its 6th edition was published March 13, 2026, and that the 2026 edition of NFPA 855, the installation standard for stationary energy storage, and the 2024 International Fire Code require fire and large-scale fire testing.

The 2021 International Residential Code, Section R328, as reproduced by the Washington State Building Code Council, caps each unit at a 20 kWh rating. It also caps the aggregate at 40 kWh in utility closets, basements and storage or utility spaces, and at 80 kWh in garages, in detached accessory structures, on exterior walls or outdoors on the ground. Larger installations fall under the International Fire Code. The section also bars sleeping rooms and requires smoke alarms (or an interconnected heat detector) and vehicle-impact barriers where needed.

Two exceptions take a system out of R328 entirely: units under 1 kWh, and units listed to UL 9540 and marked "For use in residential dwelling units" that are installed per the manufacturer's instructions and NFPA 70, the National Electrical Code. In the 2024 code the section moved to R330, according to a Montana Department of Labor and Industry code-update training. UL Solutions, writing in IAEI Magazine, says the 2024 exception requires a listing for use in habitable spaces, which depends on a UL 9540A cell-level test that today's lithium-ion chemistries (including NMC and LFP) cannot pass, so current lithium systems must meet all of Section 330. UL adds that Section 330 mirrors the chapter on one- and two-family dwellings and townhouse units in NFPA 855 (2023 edition).

The code limits a unit's energy "rating" and does not say "usable". Our reading is that the rated figure on the listing, not the smaller usable figure, is what counts, but the local code official decides. States and cities adopt different editions and amend them; Washington's proposed amendments, for example, delete the repurposed-EV exception. Check what your jurisdiction enforces.

The federal credit cutoff

The IRS's Fact Sheet 2025-05 states the Section 25D credit is not allowed for expenditures made after December 31, 2025, and that an expenditure counts as made when the original installation is completed. Paying in 2025 does not help if installation finished in 2026. Under a lease or power purchase agreement the homeowner does not own the battery. The IRS lists energy storage technology as eligible property under the business Clean Electricity Investment Credit, but its pages do not say how leased home batteries are treated after the 2025 law; whether any credit value shows up in a homeowner's price is set by the contract.

This article is general education, not tax, legal or electrical advice; battery installation involves high-voltage wiring and fire-code requirements, so it should be designed, permitted and installed by a licensed professional.

Frequently asked questions

Can I still claim the credit for a battery installed in 2025?

Yes, if the installation was completed in 2025, the credit is claimed for that tax year, on Form 5695 with the 2025 return. The IRS Residential Clean Energy Credit page requires battery storage to have a capacity of at least 3 kWh and the home to be in the United States. It covers your main home whether you own or rent it, and a second home you live in part-time and do not rent out. Landlords and other owners who do not live in the home cannot claim it.

How do amp-hours relate to kWh on a battery label?

Amp-hours (Ah) measure electric charge, while kWh measure energy, and Sandia's testing chapter warns the two are often confused. Multiplying amp-hours by the battery's nominal voltage and dividing by 1,000 gives an approximate kWh figure; for example, 100 Ah at 51.2 V is about 5.1 kWh. Two batteries with the same Ah rating but different voltages store different amounts of energy.

Does a battery stop working at its warranty end-of-life point?

No. An end-of-life threshold marks a capacity level, not a failure. Sandia's handbook notes that the common 80% definition comes from lead-acid backup practice, where batteries become less reliable below that level; a lithium-ion battery at 70% or 80% still works but stores proportionally less energy.

Do outage hours vary much by state?

Widely. EIA's state reliability table shows customers in Maine averaged about 1,749 minutes (about 29 hours) of interruptions in 2024, including major events, while Massachusetts averaged 102 minutes. National figures can understate the backup needs of homes in storm-exposed or rural service areas.

Does a home battery use energy when nothing is running?

Yes. PNNL-22010 separates a self-discharge rate, the loss when the cells are disconnected, from a standby energy loss rate, which also counts the battery management system and other electronics that keep the system ready. Both are reported as a percentage of energy lost per day, so a spec sheet that lists them shows how much a full battery loses while waiting for an outage.

Sizing checklist before you buy

List essential loads with watts and hours per day; use the EnergyGuide kWh per year for the refrigerator and the nameplate for other motors.
Add them up and set a target number of hours or days. EIA's 2024 reliability summary reported 11 hours of interruptions for the average customer, about 9 of them from major events, and Table 11.1 puts the average interruption that year at about 7.2 hours; a single storm outage can last much longer.
Ask the installer for usable capacity and whether it is measured at the AC output, the continuous and peak kW ratings, the round-trip efficiency, and the operating temperature range.
Apply the formula with your reserve setting and the warranty's year-10 retained capacity, and check that starting surges fit under the peak kW rating.
Read the warranty for years, retained-capacity percentage, throughput cap and which capacity the percentage applies to.
Confirm the installation date in the contract if any incentive depends on it, and confirm the permit covers the code edition your jurisdiction uses.