Solar ROI and Payback Period

Payback on a standard solar installation is now 6–7 years. Over 25 years, a 4kWp system saves the average household more than £19,000. Add battery storage and lifetime returns push beyond £30,000.

How the payback calculation works

Three things determine your payback: how much electricity you generate, how much of that you self-consume (avoiding grid import at ~28p/kWh), and how much you export (earning SEG payments at 4–15p/kWh). The self-consumed portion is worth far more than the exported portion. Shifting consumption habits — running the dishwasher and washing machine during solar hours — improves the return meaningfully.

Example for a 4kWp system

• Annual generation: approximately 3,800 kWh (south-facing, minimal shading)
• Self-consumed (50%): 1,900 kWh @ 28p = £532/year
• Exported (50%): 1,900 kWh @ 8p = £152/year
• Total annual saving: £684/year
• System cost: £8,000 — simple payback around 11.7 years at static prices

Increase self-consumption to 60% and the annual saving rises to £800–£900, bringing payback to 9–10 years. Factor in energy price inflation of 3–4% annually and the real-terms payback improves further.

Why our headline figure is 6–7 years

That figure applies to households that shift daytime loads to solar hours, have a reasonably sized system relative to consumption, and are on a fair SEG tariff. It is achievable but not automatic. At survey, we model payback based on your actual usage patterns, not a generic average.

What about rising energy prices?

Every penny increase in the unit rate makes solar more valuable — each kWh you self-consume saves more. Payback calculations based on today's prices are conservative. We do not use speculative future prices to inflate projections.