Achieving decarbonization and promoting clean energy are critical goals in the transition towards a sustainable future. Net-zero energy buildings (NZEBs) play a crucial role in this process by minimizing energy consumption and adopting the use of renewable energy sources (RES). Energy storage is necessary for maximizing local utilization of RES especially in residential buildings and improving their grid interaction. Centralized energy storage (CES) helps share the surplus generation from households to those with deficits. This work investigates how CES with energy sharing protocols can reduce dependency on the grid and achieve a net-zero grid interaction scenario, where the community generates and consumes an equal amount of energy. Simulations results indicate that CES requires a smaller total battery capacity compared to individual systems even when no energy is shared. When energy sharing is also considered, the battery capacity requirement significantly reduces. The grid imports also drastically reduce but the exports cannot be completely eliminated – these help evacuate surplus solar back to the grid. Results based on actual recorded data from India demonstrate how residential communities can reap significant economic benefits by considering CES with energy sharing: a 40% reduction in size with improved battery utilization is presented in the results. The results are promising and provide several insights on grid interaction.