Vicaya GlobalCalculator · Solar · savings and payback
When does a solar system pay for itself?
A 4.0 kWp system in London, costing £5,600 installed. Generation comes from the same physics engine as every other page here; the money comes from an engine pinned by 67 hand-computed reference cases.
What do kWp and kWh mean?
- kWh — kilowatt-hour
- A unit of energy, and the thing your electricity bill charges you for. A 1,000-watt heater running for one hour uses one kWh. A typical home uses somewhere between 2,000 and 10,000 kWh a year depending on where it is and how it heats.
- kWp — kilowatt-peak
- A unit of capacity — how big the solar array is, not how much it makes. It is the output the panels would produce under standard test conditions: bright, cold and perfectly aimed. Real roofs rarely see those conditions, which is why a 4 kWp array does not generate 4 kW for most of the day. One modern panel is roughly 0.4 kWp, so 4 kWp is about ten panels.
- Putting them together
- kWp is the size of the system; kWh is what it produces over time. The ratio between them — kWh generated per kWp installed, per year — is the honest way to compare locations, because it strips out how big the system happens to be. It runs from roughly 700 in cloudy high latitudes to over 1,800 in sunny deserts.
Only 35% of what this system generates is worth the full 27p/kWh you pay for grid electricity.
The rest is exported, and exported energy earns far less. That single gap moves the payback year more than panel choice, tilt or efficiency ever will — which is why a calculator that values every generated kilowatt-hour at your import rate will always tell you a happier story than the meter does.
The cash position, year by year
How much does this depend on what was assumed?
The figures above are one run through one set of assumptions. This is the same calculation run 200 times with the six inputs that matter most drawn from their own distributions — how sunny the year is, how fast the panels degrade, how energy and export prices move, how much of the output is used at home, and what the system actually cost.
Across 200 modelled scenarios, this system pays back as early as 8.0 years and as late as 11.5 years, with the middle at 9.6 years. Eighty per cent of the modelled outcomes fall between those two figures.
The base case is not the middle of the range. It comes out at 8.9 years while the middle of the modelled scenarios is 9.6 years — later. That gap is not a rounding artefact: the cost distribution has a longer tail upwards than downwards, and an array declared unshaded can turn out to be shaded but cannot turn out to be better than unshaded. Both push the middle away from the optimistic end.
Every modelled scenario paid back within 25 years. That is a statement about the spread of these assumptions, not a guarantee about a roof.
| Measure | Base case | Favourable end | Middle | Unfavourable end |
|---|---|---|---|---|
| Payback | 8.9 years | 8.0 years | 9.6 years | 11.5 years |
| Net present value | £3,991 | £4,689 | £2,836 | £1,285 |
What this range is, and what it is not
It is a sensitivity interval, not a forecast. It says that if the assumed distributions are right, 80% of sampled outcomes land between those figures. It does not say those distributions match reality, because they have never been checked against observed installations — nobody has fed this model a few hundred real systems and asked how often the outcome fell where it said. Until that happens the honest phrasing is "80% of modelled scenarios" — which is why nothing on this page calls any outcome probable, expected or typical. Those are claims about roofs, and this is a statement about a model.
- The range is wider than it would be for a shaded-declared system. This page does not ask about shading, so the model treats the array as unshaded and then widens the inputs to cover the possibility that it is not — a one-sided allowance, because an array declared unshaded can only turn out worse.
- Self-consumption is a single share you typed. That is the weakest input in the model, and its spread is held at ±10 percentage points regardless of how confident the figure above looks.
- Import and export prices are modelled as moving together, weakly. Under an export guarantee the export rate is set by each supplier rather than tied to the retail price, so the two are only loosely coupled here. The payback range barely moves if that coupling is changed; the unfavourable end of the net present value does.
- Policy is not sampled. A scheme either continues or it does not, and averaging a binary produces an outcome that cannot happen. Where a rule expires inside the horizon the model runs named branches instead — and this page, which takes your own tariff rather than a scheme, has none to run.
Uncertainty model 0.1.0 · 200 samples, Latin hypercube with a Gaussian copula · seed 3322677785, derived from the scenario rather than a clock, so the same inputs always produce the same range.
Where the generation goes
Show generation as a table
| Month | kWh |
|---|---|
| Jan | 109 |
| Feb | 164 |
| Mar | 327 |
| Apr | 479 |
| May | 519 |
| Jun | 533 |
| Jul | 553 |
| Aug | 480 |
| Sep | 401 |
| Oct | 253 |
| Nov | 151 |
| Dec | 90 |
| Total | 4060 |
Every assumption behind these figures
| Assumption | Value | Why it matters |
|---|---|---|
| System cost | £5,600 | £1,400 per kWp — change it above to match your quote |
| Import rate | 27p/kWh | What you avoid paying for each unit you use yourself |
| Export rate | 7p/kWh | What your supplier pays you. Rates vary enormously between countries and suppliers |
| Self-consumption | 35% | Without a battery or a demand profile, this is an estimate, not a measurement |
| Discount rate | 5% nominal | What the money could earn elsewhere |
| Energy price rise | 3% a year nominal | Nominal throughout — mixing real and nominal overstates the return |
| Panel degradation | 0.5% a year | Output falls slowly over the system's life |
| Inverter replacement | £900 at year 13 | Included, because inverters do not last 25 years |
| VAT | 0% | Not modelled. Sales tax and VAT treatment of domestic solar differs by country |
What these four figures mean
| Figure | Exactly what it is |
|---|---|
| Break even | The year cumulative savings first exceed what you paid. Undiscounted, so it ignores what the money could have earned elsewhere. |
| Year-one saving | Bill reduction in the first twelve months: energy you use yourself valued at your import rate, plus energy you export valued at your export rate. |
| Lifetime savings | The sum of every year's saving, in nominal money, after lifecycle costs such as the inverter replacement — but before the purchase price. It is not profit. Subtract the £5,600 you paid to get the net gain. |
| Levelised cost | Total discounted cost divided by total discounted generation — what each unit this system produces effectively costs you. Compare it against your import rate: below it, the system is cheaper than the grid. |
How much to trust this
The generation figure is the reliable part: it comes from a model measured against PVGIS, and the deviation is published. The money is far less certain, and not because the arithmetic is shaky — it is exact, and pinned by reference cases — but because it rests on guesses about the next twenty-five years. Energy prices, export rates and how much of your own generation you happen to use will each move this answer more than any modelling error could.
That uncertainty is no longer left as advice to be careful about — it is quantified above, by running the same calculation 200 times with those guesses drawn from their own distributions. The honest reading of the break-even figure is the range rather than the single number, and the range is wider than the precision of "8.9 years" suggests.
The figures that deserve most confidence are still the relative ones: that self-consumption matters more than panel efficiency, and that an inverter replacement is worth budgeting for. Those survive every scenario in the range, because they follow from the shape of a solar day rather than from any particular guess about prices.
Frequently asked questions
How long is the solar panel payback period?
The payback time depends on your electricity price, how much of the solar you use as you generate it, and your export rate — which is why this is a calculator rather than a single number. It walks the payback year by year with panel output slowly declining, rather than dividing the cost by the first year’s saving, a shortcut that flatters the answer because later years earn less.
In short, it is a solar payback period calculator: the year the savings add up to the cost of the system.
How much do solar panels save per year?
Two rates, not one. Electricity you use as you make it saves the full unit rate you would have paid; the surplus you export earns a lower export rate. This tool blends the two by the self-use share you set and budgets an inverter replacement, so the saving is honest about midday solar not matching evening demand.
Are solar panels worth it?
It depends on your electricity price, your sun, and what you paid — which is exactly why this is a calculator, not a yes or no. Enter your own figures and it shows the payback period, the annual return and the lifetime net gain in today’s money.
What return on investment (ROI) do solar panels give?
The tool reports the first-year saving over the installed cost as a simple yardstick, plus a degradation-aware lifetime figure. It is not an internal rate of return, and it ignores inflation and the cost of borrowing — which it states plainly rather than flattering the number.