How do domestic battery installations help with the retail price of electricity?

1. Time arbitrage of energy. Store energy from times when it is abundant, and put it back when it's more scarce. This is profitable on most grids with at least high single digits of percentage of renewable generation. And to say it's profitable for battery operators is the same thing as saying it's reducing costs, if the grid/utility is operated in a fair way.

2. Location arbitrage of electricity by making use of times with less grid congestion. The grid itself is the only location arbitrage we have had up until grid-sized batteries. But it's expensive, and the costs are not even. Some locations are far cheaper to service than others. Battery storage has long been a "non-wired alternative" that in many cases is cheaper than stringing wires to expand capacity.

There's probably more that I dont understand. Battery storage on the grid is a disruptive technology, because up until now the grid was pretty much the only major system I could think of that doesn't have any storage. (Computer networking is kind of similar, but buffers have always existed. It just turns out that buffering is not tremendously useful in the network itself when the endpoints have tons of storage...)

In the US, transmitting and distributing electricity is more expensive than generating it. That imbalance is going to widen far further as solar and wind get cheaper, which they will for a minimum of a decade, based on the current pace. They could get cheaper for multiple decades. We don't really know what the floor is going to be, but we do know it will be electricity far cheaper than we had imagined from any other technology up until now.

They lose some solar generation during the day that is now going into charging the batteries, but they have too much of that already.

Net result a lower proportion of (more expensive) fossil fuels in the overall mix, meaning total cost of power generation comes down, and retail prices come down.

In most states, the power company cannot seize your home for cancelling your account + not paying your bill. Also, in most states, the power company gets to regulate the design of grid-attached solar. They're artificially driving installation costs up (building codes do too, and are a separate problem).

This means there's a big step function coming. The price of grids (which are subsidizing the AI data center boondoggle, and also legacy fossil fuel plutocrats) are currently a little higher than grid attached battery + PV. We're maybe one more price halving to the point where it makes sense to go off grid.

At that point, a market for off-grid (non-subsidizing) system installations will materialize. In distorted markets, this will drop prices non-linearly (2-4x), and then everyone will act surprised.