Page 24 | Solar.com

Please enter a valid zip code.

photo of transmission lines

Will Electricity Prices Go Down in 2025?

By How Do Solar Panels Lower Your Electric Bill?, The Pros and Cons of Rooftop Solar in 2025 No Comments

After a rapid increase in utility rates in 2022, many homeowners are feeling the pain of several years of high electricity bills and wondering if utility rates will go down in 2025.

We’ll put it this way: Don’t hold your breath for electricity prices to drop.

While we don’t have a crystal ball, in this article we’ll look at trends, forecasts, and economic forces to get a sense of what to expect from electricity prices in 2025 and beyond.

Will utility electricity prices go down in 2025?

In general, utility electricity prices are expected to continue rising in 2025 — albeit at a lower rate than we experienced in 2022 and 2023. How do we know this? Well, many utilities have proposed rate increases — and decreases — for 2025 and filed for approval by local authorities. We’ve listed some of the notable ones below.

Notable utility rate increases proposed for 2025

State/Area Utility Proposed 2025 rate hike
Southern California Southern California Edison (SCE) 10.3%
California Pacific Gas & Electric (PG&E) 1.6%
San Diego, CA San Diego Gas & Electric (SDG&E) 2.7%
Western Washington Puget Sound Energy (PSE) 6.74%
Massachusetts Unitil 23%
New York ConEdison 1.4%
Florida Duke Energy 4%
Minnesota Xcel Energy 9.6%

The big takeaway from this list is that utility electric rates vary greatly from utility to utility and that annual electricity price increases are the norm — not the exception to the norm. Over the last 20 years, electric utility rates have increased by roughly 3% per year on average. However, in an era of rapidly increasing electricity demand, extreme weather, and aging infrastructure, it’s reasonable to expect utility rates to rise at a faster rate in the future.

 

 

What causes electricity prices to increase?

Electricity – at least when it comes from a utility company – is a commodity and is therefore subject to the forces of supply and demand. At the most basic level, electricity prices are rising because demand is outpacing supply.

Electricity demand is increasing from home electrification, electric vehicle charging, and new power-hungry AI data centers coming online. On the supply side, well, there’s a lot going on…

The rapid electricity price increase in 2022 is largely attributed to some combination of:

  • Supply chain tangles created during Covid-19 lockdowns
  • The Russian war in Ukraine upending the global energy ecosystem
  • Profiteering (aka “greedflation”) by major oil companies that supply fuel for power plants

electricity prices 2019-2023

While these are all (hopefully) short-term supply issues, there are serious issues at the core of the electricity supply chain. For example, the central grid system itself is outdated and inefficient, and the cost of trying to upgrade or rebuild grid infrastructure is passed onto utility ratepayers.

As a commodity in a capitalist economy, grid electricity is subject to the same inflationary forces as food, housing, and other types of fuel.

Related reading: What’s the Average Electric Bill in Each State?

When will electricity prices go down?

Given the market forces explained above, and a 45 year trend of rising electricity prices, it’s hard to imagine electricity prices coming down significantly in the near future.

The chart below shows the average electricity price in the US from 1979 to 2024. In that 45-year period, prices have increased at an average annual rate of 2.9% and have only decreased year-over-year nine times.

Historical Electricity Prices Chart

 

chart showing average US utility electric rates from 1979 to 2024

Based on this history, electricity prices may fall year-over-year once or twice every decade, but in the big picture, they will continue climbing at a steady rate. The only question is at what rate will they climb?

 

 

Electricity price forecasts: 2025 and beyond

Depending on where you live, residential electricity rates are projected to rise between 15% and 40% by 2030, according to ICF, and could double by 2050. The main cause: We’re using more and more electricity to power AI, industrial manufacturing, transportation, heating, and cooling, and we aren’t building energy infrastructure fast enough to balance supply and demand.

Unfortunately, the ICF rate forecast may end up being lower than reality. In July 2025, President Trump signed the “One Big Beautiful Bill” into law, which removed incentives and made it harder to build wind and solar projects needed to meet rising power demand.

 

Set a flat rate for your electricity

Even if electricity prices go down in 2025 or the coming years, they are all but guaranteed to continue rising in the long term based on market forces. Home solar allows you to set a flat rate for your electricity and hedge against energy inflation.

Connect with an Energy Advisor to learn more about hedging against energy inflation with solar.

 

Types of solar batteries

Types of Solar Batteries in 2025: A Comprehensive Guide

By How Do Solar Batteries Work?, Solar Battery No Comments

Solar batteries are the clear and obvious answer to the question “How does solar work when the sun goes down?”

But while most homeowners love the idea of having energy independence and backup power for grid outages, solar batteries are a major purchase that can be difficult to understand — let alone shop for.

So, in this article, we’ll discuss the different types of solar batteries, including their strengths, weaknesses, and best use cases. Our hope is to help you narrow down which type of solar battery best suits your needs so you can focus your search on one or two specific brands or models.

Interested in battery storage for your home? The 30% tax credit for homeowners who install battery storage ENDS on December 31, 2025. Storage systems need to be installed by the end of 2025 for homeowners to claim this credit before it’s gone. Get started today with multiple quotes for your battery project.

 

 

Click to jump to a section:

Let’s start with a quick recap of why and how homeowners use batteries to store solar power.

Why use solar batteries?

While typically thought of as a backup power source, there are a handful of additional reasons to add battery storage to your solar system. These include:

And let’s not forget that some people just like to adopt new technologies and be on the cutting edge.

We welcome all homeowners interested in battery storage, but it is important to establish goals before diving into the world of solar batteries because your goals will help determine which type of solar battery best suits your needs. For example, a new tech enthusiast will likely choose an entirely different type of solar battery than a homeowner looking to maximize their cost savings.

With some goals in place, let’s start by exploring the different types of solar batteries by their chemical compositions.

What are the different types of rechargeable solar batteries?

Solar batteries can be divided into six categories based on their chemical composition: Lithium-ion, lithium iron phosphate (LFP), lead-acid, flow, saltwater, and nickel-cadmium.

Frankly, the first three categories (lithium-ion, LFP, and lead-acid) make up a vast majority of the solar batteries available to homeowners. However, battery technology is evolving at lightning speed, so it’s worth keeping an eye on them all.

Let’s start with the one we’ve all heard of: Lithium-ion.

Lithium Ion Batteries

Lithium-ion (Li-ion) batteries have become the predominant choice for home energy storage (among many other things) due largely to their high energy density. Basically, you can pack a ton of power in a small space – which is ideal for storing thousands of Watts of solar production in your garage.

Another reason lithium-ion is so ubiquitous is that it is an entire category of batteries that includes six different chemistries:

  • Lithium Iron Phosphate (LFP)
  • Lithium Cobalt Oxide (LCO)
  • Lithium Manganese Oxide (LMO)
  • Lithium Nickel Manganese Cobalt Oxide (NMC)
  • Lithium Nickel Cobalt Aluminium Oxide (NCA)
  • Lithium Titanate (LTO)

There are a few major downsides to lithium-ion solar batteries. First, as a new technology made up of high-demand elements, they are relatively expensive. Second, if certain lithium-ion batteries are not properly installed, they pose a risk of catching fire through a process called thermal runaway. Finally, some Li-ion batteries contain nickel and cobalt, which in some cases, are mined through questionable practices.

Popular lithium-ion solar batteries include the LG RESU Prime, LG ESS Home 8, Generac PWRcell, and Tesla Powerwall.

Lithium-ion solar battery pros and cons

Pros Cons

 

High density Higher cost
No maintenance Risk of thermal runaway (fire) if not properly installed
Long lifespan (10+ years) Questionable nickel and cobalt mining practices
>80% depth of discharge
Widest range of make/model options

Lithium iron phosphate (LFP) batteries

Wait, lithium again? Yes, lithium iron phosphate (LFP) batteries technically fall into the category of lithium-ion batteries, but this specific battery chemistry has emerged as an ideal choice for home solar storage and therefore deserves to be viewed separately from lithium-ion.

Compared to other lithium-ion batteries, LFP batteries:

  • Last longer
  • Have a deeper depth of discharge
  • Are more eco-friendly since they do not use nickel or cobalt
  • Can handle a wider range of temperatures
  • Have a near-non-existent risk of thermal runaway

The drawback to LFP batteries is that, at this point, they are typically more expensive than standard Li-ion batteries because it’s an even newer technology with fewer suppliers.

Regardless, LFP batteries make up four of our eight best solar batteries of 2024. Our highest-rated models include Franklin Home Power, Panasonic EverVolt, SunPower SunVault, and Enphase IQ.

Lithium iron phosphate (LFP ) vs Lithium-ion (Li-ion)

Feature LFP Li-ion

 

Lifecycles before degradation 1,000 to 10,000 500 to 1,000
Energy density 40-55 Wh per lb 45-120 Wh per lb
Depth of discharge Up to 100% 80-95%
Operating temperature -4 F to 140 F 32 F to 113 F
Risk of thermal runaway? Near non-existent Noteworthy if not properly installed
Ideal usage Self-consumption & TOU modes Backup mode
Cost $$$ $$

 

 

Lead Acid Batteries

Lead acid batteries were once the go-to choice for solar storage (and still are for many other applications) simply because the technology has been around since before the American Civil War. However, this battery type falls short of lithium-ion and LFP in almost every way, and few (if any) residential solar batteries are made with this chemistry.

Compared to the lithium-ion batteries described above, lead acid batteries are much bigger, heavier, and often require regular maintenance. In general, this battery type is best at providing short bursts of energy – which is great for starting gas cars but not ideal for prolonged home backup needs.

Pros and cons of lead acid batteries

Pros Cons

 

Low upfront cost Low depth of discharge (~50%)
Proven technology Shorter lifespan (around 5 years)
Around 95% recyclable Low energy density (take up more space)
Wide operating temperature range Higher long-term costs after maintenance and replacements

Flow Batteries

Flow batteries are an exciting technology that has yet to really enter the residential solar storage market.

Instead of a single tank of battery soup (like lead acid and lithium-ion) flow batteries feature two tanks of positively and negatively charged solutions that are separated by a thin membrane. When the battery is charging, the solution flows from one tank to another to store energy. And when it’s discharging, the solution releases electrons as it flows back to its original tank.

diagram showing how fow batteries work

Image source.

Flow batteries can be discharged 100% without affecting battery health, have no risk of thermal runaway, and last around 30 years. However, they require a lot of space due to their low energy density.

As such, residential flow batteries are currently few, far between, and expensive.

Pros and cons of flow batteries

Pros Cons

 

100% depth of discharge Relatively expensive (even for batteries)
Long lifespan (~30 years) Bulky due to low energy density
No risk of thermal runaway Not yet available for residential use
No maintenance
Fully recyclable

Saltwater batteries

Akin to flow batteries, saltwater batteries are a newer technology with the potential for longer-lasting, more environmentally friendly home energy storage. As the name suggests, this type of solar battery uses saltwater as its electrolyte instead of the lithium-based solutions used in lithium-ion batteries. Saltwater is easier to procure and less hazardous throughout manufacturing and performance.

However, just like flow batteries, there are currently considerable limitations standing in the way of residential use. Saltwater batteries are currently too bulky and expensive for home solar applications and will likely need widespread utility-scale adoption before trickling into the residential market.

Saltwater batteries pros and cons

Pros Cons
Long lifespan Expensive
Eco-friendly (no heavy/toxic metals and easily recyclable) Lower energy density (require a lot of space)
100% depth of discharge Few (if any) residential products available
No risk of thermal runaway

Nickel Cadmium Batteries (Ni-Cd)

Nickel-cadmium batteries are a mature technology that’s used to power everything from toys to aircraft. However, due to the high toxicity of cadmium and the “memory effect” (which can cause this battery type to suddenly die), nickel-cadmium batteries are rarely used for residential solar storage.

It’s very unlikely that you will find a nickel-cadmium battery through a full-service solar installer.

Saltwater batteries pros and cons

Pros Cons
Long lifespan Cadmium is extremely toxic
Performs in extreme temperatures Prone to the memory effect
Low maintenance

Backup vs. consumption-only batteries

If you’re buying a battery within the next few years, your first decision will be between lithium-ion or lithium-iron phosphate (LFP). Your second decision – especially if you live in California – will be whether you want your battery to provide backup power or not.

Chart showing the difference between Backup vs Non-Backup Battery

Thanks to California’s NEM 3.0 Solar Billing policy, which drastically reduced the compensation homeowners receive for pushing excess solar electricity onto the gird, a new type of “consumption-only” battery emerged in 2023 that is specifically designed to provide all the cost-saving benefits of storing and using your own electricity without the added cost of backup capabilities.

To better understand this new option, let’s first review the traditional backup battery.

Backup batteries

Backup batteries are typically the first thing that comes to mind when someone says “solar battery.” These battery systems typically consist of a:

  • Battery cabinet (where power is stored)
  • Control box that controls when/how the battery charges and discharges
  • Sub-panel that dictates which electrical systems are backed up

For many years, backup power was essentially the only reason to invest in home battery storage. However, under NEM 3.0 solar billing, batteries are now crucial for maximum bill savings from a home solar system – even if you don’t necessarily need or want backup power.

So, the industry has responded with a new type of solar battery that we’re calling consumption-only battery.

Consumption-only batteries

As the name suggests, consumption-only batteries allow homeowners to store and consume their own solar electricity instead of importing and exporting it from the grid. Also known as non-backup, rate-saver, and many other things, consumption-only batteries are essentially a stripped-down and less expensive version of traditional backup batteries.

By removing the additional equipment (control box and sub-panel), programming, and labor that enables backup capabilities, consumption-only batteries provide all the cost-saving functions of a traditional backup battery at around two-thirds of the upfront cost.

These batteries allow customers of California’s investor-owned utilities (PG&E, SCE, SDG&E) to avoid exporting their solar production to the grid for little-to-no value and avoid buying grid electricity during peak time-of-use rates. However, when the grid goes down their system is shut off just like a solar-only system.

This solar battery type is great for homeowners who are just looking for maximum cost savings and are not bothered (or affected) by grid outages, and will likely become more widespread as more utilities adopt weaker net metering policies.

 

 

AC vs DC-coupled batteries

A third way to categorize solar battery types is by AC-coupled versus DC-coupled batteries. AC-coupled batteries make up a majority of the residential solar battery market, however, DC-coupled batteries are gaining popularity – and for good reason.

The practical difference between AC- and DC-coupled batteries is their round-trip efficiency (i.e., how much of the power that goes into the battery is actually used to power your home). In AC-coupled systems, the solar energy needs to be inverted (changed from AC to DC, or vice versa) multiple times before it’s discharged from your battery into your home. Each time electricity is inverted, a little bit is lost in the process, making for a less efficient system. As such, AC-coupled systems typically have round-trip efficiency of around 85-90%, which means 10-15% of the energy is lost during the inversion processes.

In DC-coupled systems, only one inversion is required, which allows for round-trip efficiency up to 97.5%.

diagram showing the difference between AC and DC-coupled solar battery systems

Are AC or DC solar batteries better?

While DC-coupled batteries are the clear choice in terms of round-trip efficiency, they are notoriously difficult to configure into existing solar systems. That’s because existing solar systems already have inverters that change the DC electricity produced by the panels to AC electricity that’s usable in the home.

So, AC-coupled batteries are typically the primary choice for homeowners adding battery storage to an existing system, while DC-coupled batteries are becoming increasingly desired by homeowners who are installing solar panels and battery storage at the same time.

What’s the best type of solar battery?

Lithium-ion – particularly lithium iron phosphate (LFP) – batteries are considered the best type of batteries for residential solar energy storage currently on the market. However, if flow and saltwater batteries became compact and cost-effective enough for home use, they may likely replace lithium-ion as the best solar batteries.

Regardless of the chemistry, the best solar battery is the one that empowers you to achieve your energy goals. If your goal is to reduce your energy costs as much as possible, consider a smaller, consumption-only lithium-ion battery. If your goal is to install a solar and battery system that can back up your entire home, consider a larger, DC-coupled LFP battery.

Connect with an Energy Advisor to set energy goals and get binding quotes for solar batteries.

 

Frequently Asked Questions about Solar Batteries

What are the different types of rechargeable solar batteries?

The six types of rechargeable solar batteries include lithium-ion, lithium iron phosphate (LFP), lead acid, flow, saltwater, and nickel-cadmium. Currently, lithium-ion and LFP (which is technically a type of lithium-ion) batteries are the primary options for residential purposes, although there are ongoing efforts to make flow and saltwater batteries small and affordable enough for home applications.

What type of battery is best for solar?

Lithium-ion – particularly lithium iron phosphate (LFP) – batteries are considered the best type of batteries for residential solar energy storage currently on the market. However, if flow and saltwater batteries became compact and cost-effective enough for home use, they may likely replace lithium-ion as the best solar batteries.

Regardless of the chemistry, the best solar battery is the one that empowers you to achieve your energy goals.

What is the most common solar battery?

Lithium-ion batteries are the most common type of battery used in residential solar systems, followed by lithium iron phosphate (LFP) and lead acid. Lithium-ion and LFP batteries last longer, require no maintenance, and boast a deeper depth of discharge (80-100%). As such, they’ve largely replaced lead-acid in the residential solar battery market.