Solar Panel ROI Calculator 2026/27
A typical UK 4kWp solar installation costing £8,000 saves approximately £850/year in electricity and export payments. The payback period is around 9 to 10 years, and with panels lasting 25+ years, you're looking at a net profit of £13,000+ over the system's lifetime. Use this calculator to model your specific home.
Calculation method: Unit cost and usage model. This tool runs a model on the figures you enter, so there is no official rate table behind the result.
Calculator
Typical range: £7,000 to £9,000 for 4kw
% of solar generation you use directly. Average: 30 to 50%. Add battery for 70%+.
Ofgem Q1 2025: ~24.5p
SEG rates: ~5 to 20p. Octopus Flux: up to 15p. OVO: 5.6p.
Payback Period: 13 years
£639
estimated savings in year 1
25-Year Total Savings
£15,057
25-Year Net Profit
£7,057
25-Year ROI
88%
Annual CO₂ Saved
792 kg
📊 System: 4 kWp · Annual generation: 3,400 kWh · Panel life: 25+ years with ~0.5%/yr degradation
Adding a battery (£2,500 to £5,000) increases self-consumption from ~40% to 70 to 80%, significantly improving returns. Zero-rated for VAT when installed with panels.
These insights are generated based on your inputs and general UK financial guidelines. They do not constitute personal financial advice. Always consult a qualified accountant or FCA-regulated adviser before making financial decisions.
What this calculation assumes
Cost is usage multiplied by the unit price you enter, plus any standing charge. Where a default is offered it is labelled and can be overwritten with your own tariff.
- Usage is assumed steady across the period unless you vary it
- Any default unit price is a starting point, not your tariff
- Generation, export price and system cost are your inputs; no quote, tariff or irradiance data set is applied
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How Solar Panel ROI Calculator 2026/27 Works
How solar savings are calculated
Savings come from two sources: (1) self-consumption - using the electricity you generate instead of buying from the grid; (2) export - selling surplus electricity via the Smart Export Guarantee (SEG). Most homes self-consume 30 to 50% of generation during the day. A battery can push this to 70%+.
Smart Export Guarantee (SEG)
Since January 2020, all suppliers with 150,000+ customers must offer a SEG tariff to pay you for exported electricity. Rates vary from 5p to 20p/kWh depending on the supplier. Octopus Energy's Flux and Agile tariffs can offer higher rates for smart export.
Panel degradation
Solar panels degrade approximately 0.5% per year. This is factored into the 25-year calculation. Most panels come with a 25-year performance guarantee, ensuring at least 80% of original output after 25 years.
Frequently Asked Questions
Yes, for most homes. With electricity prices elevated (24 to 25p/kWh), a typical 4kWp system costing ~£8,000 saves ~£850/year, giving a payback period of ~9 to 10 years. Panels last 25+ years, so the remaining 15 years is pure profit. South-facing roofs with minimal shading get the best results.
The SEG requires electricity suppliers with 150,000+ customers to offer a tariff paying you for electricity you export to the grid. Rates vary by supplier, typically 5-20p/kWh. You need a smart meter and a certified solar installation to qualify.
In most cases, no. Solar panels on domestic properties usually fall under permitted development rights. Exceptions include listed buildings, conservation areas, and some flat roofs. Always check with your local planning authority.
For a typical UK home using 3,500 kWh/year, a 3 to 4 kWp system is usually appropriate. Larger homes or those with EVs or heat pumps may benefit from 5 to 6 kWp. Installers will assess your roof space, orientation, and shading.
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Sources and method
This calculator has no external rate table behind it. The result comes from the figures you enter and the model described in our methodology.
Method: Unit cost and usage model.
Spotted a figure that looks wrong? Report a correction and we will check it against the source above.
Further reading
Background references used while writing this page. The sources behind the calculated figures are listed above.
Disclaimer: This calculator provides estimates based on standard HMRC rates for 2026/27. Results may vary based on individual circumstances. This is not financial advice. Always consult a qualified accountant or CIMA-qualified financial adviser for personal tax matters.