In this way, a water heater works like a kind of battery, storing energy in the form of heat. According to Dennis, a 52-gallon water heater can store roughly 12 kWh of energy. The price? A new water heater costs around $1,000, though in many cases an existing water heater can be connected to the grid for $500. By comparison, a Tesla home battery stores just 7kWh of energy and costs more than $5,000 (when factoring in the cost of an inverter).