Even the most ardent solar evangelists can agree on one limitation solar panels have: they only produce electricity when the sun is shining. But, peak energy use tends to come in the evenings, coinciding with decreased solar generation and causing a supply and demand issue. The thing is, solar panels often pump out more than enough energy during those lower demand hours when the sun is shining to meet peak demand later in the day. This means that efficient solar energy storage can open up a wealth of possibilities for homeowners and businesses alike.
In this blog, we’ll look at solar energy storage in-depth, its benefits, and even tools for modeling it on your solar installs.
What are the benefits of storing solar energy?
Storing this surplus energy is essential to getting the most out of any solar panel system, and can result in cost-savings, more efficient energy grids, and decreased fossil fuel emissions. Solar energy storage has a few main benefits:
- Balancing electric loads. If electricity isn’t stored, it has to be used at the moment it’s generated. Energy storage allows surplus generation to be banked for peak-use. As far as renewable energy is concerned, storing surplus power allows the lights to stay on when the sun goes down or the wind stops blowing. Simply put, energy storage allows an energy reservoir to be charged when generation is high and demand is low, then released when generation diminishes and demand grows.
- Filling in the gaps. Short-term solar energy storage allows for consistent energy flow during brief disruptions in generators, such as passing clouds or routine maintenance.
- Energy resilience. The energy grid is vulnerable to disruptions and outages due to anything from wildfires to severe weather. Solar power storage creates a protective bubble during disruptive events by decentralizing where we get our energy from.
- Reducing carbon footprint. With more control over the amount of solar energy you use, battery storage can reduce your property’s carbon footprint in areas with fossil fuel-based utility power. Large solar batteries can also be used to help charge electric vehicles and turn any appliance in your home into a “solar-powered” device.
- Savings from electric bills. If you live in a state that has no solar net energy metering, or policies like time-of-use (TOU) rates and variable export rates, battery storage can help lower your utility bills while consuming more of your own power. So, while you may not be compensated as much for excess energy sent to the grid, any additional solar power generated and stored throughout the day can be discharged from a battery at night or on cloudy days in the place of utility consumption.
- California Net Billing Tariff (NEM 3) considerations. One of the big components of NEM 3 is that it has, “notably higher on-peak charges and lower off-peak charges” for electricity. Likewise, the export rate is lowest in the middle of the day, when solar energy is plentiful. Since “peak” hours are from 4pm – 9pm, this means, generally, that customers are exporting power to the grid when the rate they receive is the lowest, and using grid power at peak times, when it’s most expensive. Enter battery storage: Any solar energy that can be stored in a battery during non-peak hours and used during peak times will be much more valuable for the consumer. Learn more details in our blog: Explaining and modeling California’s Net Billing Tariff.
How is solar energy stored?
Solar energy storage can be broken into three general categories: battery, thermal, and mechanical. Let’s take a quick look at each.
What is battery storage?
Batteries are by far the most common way for residential installations to store solar energy. When solar energy is pumped into a battery, a chemical reaction among the battery components stores the solar energy. The reaction is reversed when the battery is discharged, allowing current to exit the battery. Lithium-ion batteries are most commonly used in solar applications, and new battery technology is expanding rapidly, which promises to yield cheaper, more scalable battery storage solutions.
What is thermal storage?
Thermal energy storage uses various mediums — such as water or molten salt — to absorb and retain heat from the sun. This heated medium is stored in an insulated tank until the energy is needed, usually to boil water for energy generation.
What is mechanical storage?
Mechanical energy storage takes advantage of the potential energy of an object to generate electricity. Mechanical storage methods convert surplus electrical power into mechanical power, which is converted back into electricity for later use. There are three prominent mechanical energy storage systems:
- Flywheel. This method uses surplus electricity to spin a flywheel, which later generates electricity to supply quick energy during peak demand times.
- Pumped hydro. With pumped hydro, water is pumped uphill to a reservoir located above turbine generators. The water is allowed to flow through turbines and generate electricity when demand is high.
- Compressed air. With this energy storage system, compressed air is pumped into large vessels such as a tank or underground formation. The air is released to generate electricity during peak demand.
The best way to store solar energy
There’s no silver bullet solution for solar energy storage. Solar energy storage solutions depend on your requirements and available resources. Let’s look at some common solar power storage options for commercial and home applications.
Commercial solar energy storage
Utility companies and other businesses generally have bigger budgets than individual households, making mechanical and thermal storage viable options. Though costs for these storage methods can be high, they help utilities keep up with peak energy demand.
- Utility scale batteries. More than 3.3 gigawatts of storage was installed in the US in just the first quarter of 2026, 2.3 GW of which was utility scale.
- Compressed air. This mechanical storage method can store energy for long periods of time, but can require high strength materials.
- Pumped hydro. Surplus solar energy can be used to pump water uphill, creating a massive amount of potential energy.
Home solar energy storage
Residential solar has many benefits, including resiliency, cost savings, and decentralization of electrical production (otherwise known as “virtual power plants”). But the commercial energy storage methods we discussed above are likely cost-prohibitive for the average homeowner. Thankfully, battery storage can now offer homeowners a cost-effective and efficient way to store solar energy.
Lithium-ion batteries are the go-to for home solar energy storage. They’re relatively cheap (and getting cheaper), low profile, and suited for a range of needs. Other batteries commonly available for residential use include saltwater batteries and lead-acid batteries.
Regardless of the battery type, home backup batteries allow homeowners to save energy during high production, low demand times (i.e. during the workday) for use during high demand periods when generation diminishes. Home solar energy storage inherits the same benefits of large-scale solar energy storage, translating into resiliency, uninterrupted energy, and cost savings. And these benefits go directly to the homeowner.
Technology to help design solar battery storage
Designing a storage system along with a solar installation used to be labor-intensive and include a fair amount of guesswork. Software like Aurora’s includes battery storage as part of its offerings.
Using Aurora’s battery storage functionality, solar installers can analyze load off-set, calculate the projected price of a project, forecast smart battery sizing recommendations based on customer priorities, and present it to the customer in a compelling, easy-to-understand way.
Aurora has also introduced battery self-consumption modeling. You can learn more here.
So, while the technology used for solar energy storage may seem complicated or overwhelming to some customers, Aurora can help you break down the complexities for customers with interactive and easy-to-understand models of performance and savings.
How to Store Solar Energy: FAQ
What is solar energy storage?
Solar energy storage refers to technologies that capture excess electricity generated by solar panels and save it for later use. The most common method for residential installations is lithium-ion battery storage, which stores surplus daytime generation for use during evenings, cloudy periods, or grid outages.
What are the main types of solar energy storage?
The three main categories are battery storage (most common for residential), thermal storage (using mediums like water or molten salt to retain heat), and mechanical storage (such as pumped hydro, flywheels, or compressed air). For residential and small commercial installations, lithium-ion battery systems are the dominant and most cost-effective solution.
How long can solar energy be stored in a battery?
Most residential lithium-ion battery systems can store energy for one to five days depending on capacity and household consumption. They are designed for daily cycling — charging during peak solar production and discharging during evening hours or outages — rather than long-term seasonal storage.
How does solar battery storage affect customer bills in TOU markets?
In time-of-use markets, electricity rates are highest during peak evening hours — typically 4–9 PM. A battery system allows customers to store solar energy generated during lower-rate daytime hours and discharge it during peak periods, avoiding high grid rates. In markets like California under the Net Billing Tariff (NEM 3.0), this strategy is particularly valuable since export rates during midday are low while peak consumption rates are high. As more states adopt NEM 3-like policies, this will apply to more and more people.
How does Aurora help installers model solar battery storage?
Aurora’s battery storage modeling tools allow installers to analyze load offset, forecast smart battery sizing based on customer priorities, and model self-consumption scenarios. Installers can present accurate bill savings and energy previews directly within the customer proposal, making it easier to sell storage with confidence.
What is the best battery for residential solar storage?
Lithium-ion batteries are the industry standard for residential solar storage due to their combination of cost, performance, lifespan, and availability. Lead-acid batteries are cheaper upfront but shorter-lived and less efficient. Newer technologies like LFP (lithium iron phosphate) are gaining ground for their improved safety profile and cycle life.
Conclusion
The sun offers a limitless supply of clean power, but harnessing it can be a challenge. Thankfully, several options for commercial and residential storage offer proven solutions for storing solar energy, and emerging technologies are being developed daily. For commercial applications, mechanical storage options provide effective solutions to harnessing solar energy when it’s needed most, and grid-scale battery storage will likely become available soon. For residential solar, battery storage is the best option, with a variety of affordable units on the market. Together, these solutions provide an effective portfolio for storing solar energy and provide a compelling argument for further solar deployment in commercial and residential settings.
To learn more, visit these resources:
- Aurora battery self-consumption modeling information
- NEM 3.0 resource center
- Explaining and modeling California’s Net Billing Tariff
To see battery self-consumption modeling in action, schedule a quick demo.
NOTE: This blog was updated in July 2026 to reflect the latest information.
