Defaults last checked: October 29, 2026. Results are estimates.
Solar payback depends on three numbers more than any other: what the system costs, how much it generates where you live, and what each kWh is worth to you. That last one is the one people get wrong. A kWh you use yourself saves you the full retail price. A kWh you export may earn a fraction of that, or nothing at all.
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How to use it
- Choose your country. We fill in your electricity price and a typical yearly yield per kWp from the EU’s PVGIS solar model for a reference city.
- Enter your system size in kWp (kilowatts peak). It’s on every quote.
- Check the yield. For a better figure, run your own address through PVGIS or NREL’s PVWatts and divide the yearly kWh by the system size.
- Set the share you use yourself. The default is 37%, the average a University of Oxford study found for UK homes with a typical 2.9 kW system and no battery. If you work from home, run the dishwasher at midday or charge an EV in daylight, yours could be higher.
- Enter your export rate. This varies so much by supplier and state that we don’t prefill it. Under full retail net metering, enter the same price as your import rate.
- Add the installed price and any grant, rebate or tax credit.
The formula
- Yearly generation = system size (kWp) × yearly yield (kWh per kWp)
- Value of self-used power = generation × self-use share × your import price
- Value of exported power = generation × (1 − self-use share) × export rate
- Yearly value = the two added together
- Simple payback = (installed price − incentives) ÷ yearly value
Worked example 1: a 6 kW system in the central US
PVGIS gives about 1,497 kWh per kWp per year for an optimally tilted system near Kansas City, so a 6 kW system makes roughly 8,982 kWh a year. EnergySage’s marketplace data for the first half of 2026 puts the median solar-only quote at $2.62 per watt before incentives, so 6 kW costs about $15,720.
At the EIA’s U.S. average residential price of 18.16 cents per kWh:
- With full retail net metering (every kWh worth 18.16 cents): $1,631 a year, so payback in about 9.6 years.
- With net billing that pays, say, 5 cents for exports and 37% self-use: about $604 from self-used power plus $283 from exports = $886 a year, so payback in about 17.7 years.
Same panels, same roof, and the payback nearly doubles. That’s why the export rate matters so much, and why we explain the end of the federal credit in is solar still worth it without the tax credit.
Worked example 2: a 4 kWp system in London
PVGIS gives about 1,023 kWh per kWp for London, so 4 kWp makes about 4,092 kWh a year. At 37% self-use and Ofgem’s October–December 2026 cap rate of 26.32p:
- Self-used: 1,514 kWh × 26.32p = £398.50
- Exported: 2,578 kWh at, say, a 15p Smart Export Guarantee rate = £386.69
- Yearly value: £785. On an £8,000 quote, simple payback is about 10.2 years.
Check your supplier’s actual export rate, since the range is wide.
What the result doesn’t tell you
- Year-one output only. Panels slowly lose output over the years. Electricity prices also change, in either direction.
- Shading and orientation. A shaded or east-west roof makes less than the reference figure. PVGIS and PVWatts let you model this.
- Maintenance and inverter replacement. These aren’t included.
- Batteries. Adding storage raises self-use but costs money. Run our home battery payback calculator separately.
FAQ
What is a good solar payback period?
There’s no single answer, but compare it with the panel and inverter warranties on your quote. A payback well inside the panel warranty is a reasonable investment. If it’s close to or beyond it, look hard at the price and your export rate.
Why is the self-use default only 37%?
Solar peaks around midday, when many homes use little power. The 37% comes from measured UK data for homes without batteries. Daytime occupancy, an EV, a heat pump or a hot-water diverter can push it higher.
Does the calculator include the federal tax credit?
No. According to the IRS, the US Residential Clean Energy Credit (Section 25D) doesn’t apply to spending after December 31, 2025. If you qualify for a state or utility incentive, enter it in the grant field.
Can I use it for plug-in or balcony solar?
Yes. Enter the kit’s size in kWp (an 800 W kit is 0.8 kWp) and its price. Small kits usually self-consume most of their output. Our guide to plug-in solar rules in the UK and US covers what’s allowed.
Related
- Is solar still worth it in 2026 without the tax credit?
- Best home batteries for solar in the UK
- Plug-in and balcony solar rules
- Home battery payback calculator