Phase 3 · Sustainable Transitions
Home Battery Arbitrage Calculator
Charge cheap, discharge dear. See whether playing the Time-of-Use power market from your garage actually yields cash — once round-trip losses take their cut.
Is a home battery worth it for time-of-use arbitrage?
Only if the peak-to-off-peak spread beats your round-trip losses. You discharge min(capacity, peak-hour usage) at the peak rate, but must buy back discharged ÷ efficiency at the off-peak rate — so a 90%-efficient battery needs about 1.11 kWh in for every 1 kWh out. Daily gain is the difference; payback is battery cost ÷ annual gain.
- Daily savings = discharged × peak rate − (discharged ÷ efficiency) × off-peak rate. Annual yield is that × 365.
- Worked example (defaults on this page): a 13.5 kWh battery, $0.45 peak, $0.12 off-peak, 90% efficiency yields $4.28/day and $1,560/yr — an $11,000 install pays back in 7.0 years.
- Effective spread here is $0.32/kWh cycled, not the $0.33 headline gap, because the recharge is 11% larger than the discharge.
- Arbitrage stops paying entirely when off-peak rate ÷ efficiency exceeds the peak rate — at 90% efficiency, an off-peak price above 90% of peak makes every cycle a loss.
Under the hood
The math, fully exposed
We cycle the battery once a day, capped by what you actually use at peak, and price the round trip:
Energy discharged = min(capacity, peak-hour usage)
Energy to recharge = discharged ÷ round-trip efficiency
Daily savings = discharged × peak rate − recharge energy × off-peak rate
Annual yield = daily savings × 365
Payback = battery cost ÷ annual yield
- The spread, after losses, is everything: arbitrage only works while peak rate × efficiency exceeds the off-peak rate. A narrow TOU spread can make the round trip a wash or a loss.
- You can only shift what you use: a giant battery earns nothing beyond the peak energy you'd otherwise buy, so capacity above your peak usage sits idle for arbitrage.
- Degradation and one cycle/day: we assume a single daily cycle and ignore capacity fade — real yields drift lower over the battery's life, so treat this as an optimistic ceiling.
Your directives
What to do next, based on your numbers
Adjust the sliders to generate tailored recommendations.
Answers
Frequently asked questions
Can a home battery actually make money on Time-of-Use rates?
Yes, modestly — by charging when electricity is cheap (off-peak) and discharging during expensive peak hours so you avoid buying at the high rate. The profit per cycle is the peak rate you avoid minus the off-peak cost to recharge, after round-trip losses. The bigger the gap between your peak and off-peak rates, the better it works.
What is round-trip efficiency?
No battery returns all the energy you put in — some is lost to heat in charging, storage and inverting back to AC. Round-trip efficiency (typically 85–95%) is the share you get back. At 90%, you must buy ~1.11 kWh off-peak to deliver 1 kWh at peak, which eats into the arbitrage margin.
Will the arbitrage alone pay for the battery?
Honestly, usually not on its own. With realistic rate spreads and a battery costing thousands, pure TOU arbitrage often takes many years to break even — sometimes longer than the warranty. Batteries make far more financial sense when you stack arbitrage with solar self-consumption and the value of backup power during outages.
What's the difference between arbitrage and backup value?
Arbitrage is the cash yield from buying low and using high. Backup value is what you'd pay to keep the lights, fridge and medical equipment running during an outage — hard to price but very real. Many owners justify a battery on backup and solar first, treating arbitrage as a bonus rather than the reason to buy.