The payback period is the moment your savings equal what you spent. After that, the power is as good as free. It's the most useful number in solar, and you can work out yours on the back of an envelope.
How long do solar panels take to pay for themselves?
About 8 to 12 years for most UK homes. Systems with a battery on a good tariff tend to land near the low end. Systems that export most of their power for a low rate land near the high end. Panels usually carry a performance warranty of around 25 years, so the payback comes well before the panels are done.
What's the simple formula?
Take what the system cost. Divide it by what it saves you each year. The yearly saving has two parts. One is the power you use yourself, which you no longer buy. The other is the power you send to the grid, which you get paid for. That's the whole sum. Our solar savings calculator does it for you from your monthly bill.
Can you show a worked example?
Say a 4 kWp system costs £6,000. It makes about 3,600 kWh a year. You use 40% of that at home. At 26.32p per kWh, that's about £380 saved. You export the rest. At 12p per kWh, that's about £260 earned. Together that's about £640 a year. £6,000 divided by £640 is just over nine years. This is an example, not a quote.
What makes payback faster?
Using more of your own power is the big one. Every kWh you use is worth about 26p. Every kWh you export is worth much less. So run the washing machine and dishwasher in the day. A south-facing roof with no shade helps too. So does a good export tariff, and so does 0% VAT, which applies to installed systems until 31 March 2027.
What makes payback slower?
A poor export rate hurts most. In our example, an export rate of 4p instead of 12p cuts the yearly saving to about £465. Payback stretches to about 13 years. Shade, a north-facing roof and very low electricity use all slow it down as well. So does being out all day with nothing running.
Does a battery make payback shorter?
It can, but not always. A battery lets you use more of your own power, which is worth more than exporting it. It also adds £2,000 to £5,000 to the bill. It helps most on a time-of-use tariff. We go through the numbers in are solar batteries worth it?
Is there a buy-back scheme for solar panels?
Yes. It's called the Smart Export Guarantee, or SEG. Larger energy suppliers must offer to pay you for the power you send to the grid. Rates open to anyone run from about 3p to 13p per kWh, and up to 25p if you buy the system from the supplier, so it's worth shopping around. Our SEG guide explains how to sign up, and our best SEG rates page lists what each supplier pays.
The quick version
- Most UK systems pay back in about 8 to 12 years.
- Payback equals cost divided by yearly savings.
- Using your own power beats exporting it.