Battery storage is here

We can help you make an informed decision about whether battery storage is right for you. 

Customers are looking for ways to consume more of the solar energy they're producing. Battery storage lets customers access backup power and shifts solar generation to peak periods.

Benefits of battery storage

Backup power

In the event of a power outage, battery storage systems can provide power and reliability. Unlike backup generators, battery storage can power critical appliances like your refrigerator.

Bill saving

A battery storage system lets you store excess solar energy generated during the day. You can use this excess energy during peak hours, when electricity is most expensive. This reduces the typical customer’s electric bill, but doesn't factor in the cost of leasing or purchasing the battery. Learn more about our Time-of-Day rates.

Environmental impacts

By shifting your excess solar generation to peak periods, you're reducing your carbon emissions and the demand on the electric grid.

Start your estimate

If you're considering battery storage, use our solar system estimator, which includes a battery storage option, to help you determine the benefits of installing battery storage. Let us serve as your trusted advisor to help you make the choice that's right for you.

You'll see the option to add battery storage on the summary page. You'll need to go through the solar estimation process to get to the summary page.


See if you'll save

Battery storage incentives

We have a variety of battery storage incentives available for residential customers.

As part of our holistic rate redesign, SMUD will launch new battery storage incentives for customers on the Storage and Solar Rate that goes into effect on March 1, 2022. One-time enrollment incentives will range from $500 to $2,500 depending on your preferred level of engagement with SMUD and our clean energy future. Ongoing participation payments will also be available.

  • Max $500 Level: Optimize your battery to our rates.
  • Max $1,500 Level: Configure your system to respond to a signal from SMUD that our clean power resources are limited or the grid is under stress. 
  • Max $2,500 Level: Be a partner to our clean energy future by allowing SMUD to tap into a portion of your battery as we would for any power plant on our grid.  
SMUD adopted the new Solar and Storage Rate in September 2021 with the goal to price energy in a way that’s balanced for all customers and encourage more clean energy solutions, which benefits our entire community. This rate replaces the former net energy metering (NEM) rate.

Qualified residential battery storage customers can receive up to $600 in incentives for your commitment to operate your battery system in a way that reduces your electricity costs and contributes to a healthier environment. Your battery is most likely already operating in this mode.

The battery incentives are based upon the storage unit’s kW rating:

Storage Incentives per site
1kW - 10kW $300
10.1kW and above $600


Enroll in this incentive

Commitment to operate terms and conditions

Solar PV + battery/NEM eligible customers: System owner commits that at least 51% of the proposed battery capacity will be used to shift energy generated from solar to offsetting loads during the on-peak periods. Any incidental energy (kWh) discharge to the grid will be credited at normal Net Energy Metering rates. 

Battery only - non-export /not NEM eligible: System owner commits that at least 51% of the proposed battery capacity will be used to shift energy usage from on-peak periods to off-peak periods. Be aware non-solar connected storage is not eligible for Net Energy Metering and therefore any incidental export will not be compensated.

SMUD customers that install and own their SolarEdge inverter can receive a one-time incentive of up to $1,000 plus $20 monthly bill credits for enrolling in a program where their battery storage system can be managed for maximum efficiency. Devices will be optimized to SMUD’s Time-of-Day (TOD) Rate by charging during the cheapest times of the day and being ready for use during the most expensive.

Occasionally, SMUD will also use day-ahead price signals to optimize devices to consume more renewable energy or lower cost energy. This type of optimization allows customers to take advantage of lower rates without giving up comfort. Your battery storage installer can apply for the program incentive during the interconnection application process. To learn more, email

The battery incentives are based upon the storage unit’s kW rating:

Storage One-time incentive  Monthly bill credit 
1kW - 10kW, not enrolled in CTO $500  $10 per month
10.1 kW and above, not enrolled in CTO $1,000  $20 per month
1kW - 10kW, already enrolled in CTO
$200  $10 per month 
10.1kW and above, already enrolled in CTO  $400  $20 per month


Enroll in this incentive

Smart Energy Optimizer terms and conditions

  • All incentives paid after project completion
  • Monthly bill credits paid for up to 10 years or for the full term of the battery warranty
  • SMUD won’t cycle the battery more than 120 times a year
  • Customers can still have 49% of battery capacity available for backup power
  • Only battery storage systems that install a SolarEdge inverter qualify for the Smart Energy Optimizer incentives

Read Participant Agreement with full terms and conditions

Frequently asked questions

How does a battery storage system operate?
Battery storage systems are a way of storing and releasing electrical energy in a chemical manner. Battery storage systems store the energy in batteries. An inverter converts the battery's DC energy to AC energy your home can use.

The battery is charged using energy from your solar PV system or the electric grid. The battery is discharged to offset energy use during more expensive peak times of the day. This is to reduce your electric bill or for back-up power in the event of an outage.

What is the lifespan of a battery storage system?
Lithium Ion (Li-Ion) battery systems usually last about 10 years. The warranty period for batteries is set by your battery system manufacturer.

Do all battery storage systems provide backup power?
Many battery storage systems can provide backup power if they are configured to do so. A battery can be configured to provide backup power for critical items or your whole home. Be sure to communicate with your contractor about how much, if any, of your battery capacity you want dedicated to backup power.

Is battery storage safe?
Safe installation should follow:

  • National Electric Code (NEC)
  • SMUD’s Electrical Service Requirements
  • Any additional requirements of your local building permitting agency

Follow manufacturer’s care, use and service criteria to ensure safest possible operation.  

Can I add a battery storage system on an existing solar installation?
Yes, you can add battery storage to existing solar installations. Your battery installation contractor will determine what's necessary to complete a retrofit installation.

Can I install battery storage systems without installing a solar system?
Yes, but your battery storage will not qualify for Net Energy Metering (NEM). This means you won't be compensated for exporting stored energy to the grid.

How long will a battery storage system power my home during an outage?
Without solar, batteries usually provide backup power for about 2-3 hours at their peak rated output. When paired with solar generation, the backup period can be extended. The number of appliances powered during an outage will impact the backup power duration.

How much can I save on my SMUD bill by installing a battery storage system?
Generally speaking, energy storage is not cost effective today. The total savings from a battery storage system are usually less than the cost of the battery storage system.

A typical residential battery storage system charging at the lowest price to offset loads at the highest price time period could save a customer between $200-$350 per year on their SMUD bill. Even with these savings, the annual savings would most likely not recover the upfront system costs.

Even a battery operating in this mode (peak shaving) for its 10-year expected life could save a customer up to $4,000, which still would only cover approximately 50% of the total system cost.

What size battery system should I consider for my home?
Your battery installation contractor can help you decide what battery system size is right for you. The typical residential battery storage system installed in SMUD territory is a 5kW / 10kWh unit.

Can I go completely off-grid with a battery storage system?
While it is possible to go completely off-grid with a battery storage system, a modern home is not designed to be disconnected from the grid. A battery storage system is not a generator. It's not realistic to permanently operate off-grid without substantial investment in larger solar and storage systems. Even with solar generation, a storage system would need to be significantly larger to provide enough electricity to power your home 24 hours a day, 7 days a week.

How can I learn more about battery storage systems?
If you're interested in learning more about battery storage systems, please attend a SMUD class to get a better grasp of this new technology. Also, we recommend getting multiple bids before you sign a contract.

Does SMUD have any requirements on how I install my battery?
SMUD requires that the battery storage system installation follows:

  • National Electric Code (NEC)
  • Requirements of your local building permitting agency
  • SMUD’s Electrical Service Requirements for Distributed Generation

The interconnection process for battery storage is very similar to interconnection of solar PV systems. Battery storage systems are processed through the SMUD PowerClerk portal. This step-by-step web tool will make your interconnection process easy and straight forward. Your contractor will most likely handle the process for you.

What is the Commitment to Operate Incentive and how does it work?
Commitment to operate allows customers with battery storage systems to operate 51% of their battery capacity during peak hours. Participants can earn a one-time incentive of $300 or $600 for enrolling in the program and are paid upon installation completion. Participants in the program will contribute to the overall health of the electrical grid and will still have 49% of their battery capacity available for back-up power.


Am I eligible for the commitment to operate incentive if I am currently in the process of installing a battery storage system at my residence?
You are eligible for the commitment to operate incentive once the installation process is complete. To confirm your enrollment into the program, please email

Do battery storage system installations qualify for other incentives?
Battery systems charged by renewable resources may be eligible for:

  • State and federal incentives
  • Tax credits (Federal Investment Tax Credit and California Self Generation Incentive Program)

Check with your contractor and tax advisor for more details.

What is Smart Energy Optimizer?
Smart Energy Optimizer allows customers with battery storage systems to partner with SMUD to optimize energy use through increased Time-of-Day bill savings along with an on-going monthly bill credits. Participants in the program will contribute to the overall health of the electrical grid.

How does Smart Energy Optimizer work?
Two out of three days in a year, SMUD will manage your battery based on Time-of-Day Rates, similar to the Commitment to Operate program. Sometimes, typically one out of three days (no more than 120 cycles per year) SMUD will manage your battery based on SMUD’s grid needs. The battery will continue to be available for customer use, such as back-up power, and SMUD on a temporary basis will manage up to 51% of the battery capacity. The value of this type of optimization allows us to provide ongoing monthly bill credits, which should offset any impact to your bill.

Once enrolled in the Smart Energy Optimizer program participants do not need to change any behavior or configuration of their battery storage system. SMUD has partnered with qualified system installers to manage battery system operation. Smart Energy Optimizer uses the same built-in communications configured in the battery storage system.

What about back-up power?
Smart Energy Optimizer Program participants will have full access to the amount of power available in their battery storage system during a power outage. If a customer has 80% of their battery charged, then 80% capacity will be available to back-up the home. Please see the 'Do all battery storage systems provide back-up power?’ question above.

Why join the Smart Energy Optimizer program?
Your participation in Smart Energy Optimizer will decrease the energy burden on SMUD’s grid during peak hours. This will help maintain a low cost to service and keep electricity rates low. Participants are likely to experience increased bill savings when SMUD shares the portion of the grid benefit value with the customer.