Cost effective and large scale energy storage is critical to renewable energy integration and smart-grid energy infrastructure. Rechargeable batteries have great potential to become a class of cost effective technology suited for large scale energy storage. In this paper, we report the energy storage characteristics of a newly developed rechargeable solid oxide iron–air battery. Investigations of the battery’s performance under various current densities and cycle durations show that iron utilization plays a determining role in storage capacity and round-trip efficiency. Further studies of the battery's cycle life reveal a unique charge-cycle originated degradation mechanism that can be interpreted by a combined vapor-phase transport and electrochemical condensation model. Overall, the energy capacity of the new solid oxide iron–air storage battery should be properly balanced with the round-trip efficiency at optimized iron utilization.