Solar Panel Payback Time
Solar panels are at their cheapest price since 2010, so even though they’re still a large investment, the solar panel payback time could be shorter than ever.
However, with the Feed-in Tariff, a government scheme that entitles those generating energy from solar panels to 20 years of payments, having closed in March 2019, it could be easy to think that solar panels aren’t worth the investment.
How Much do Solar Panels Cost?
For the average UK home, solar panels will cost £6,000 – £7,000, about 60% cheaper than in 2010. So, despite the Feed-in Tariff (FiT) coming to an end, solar payback time could still be shorter than if you installed solar panels a few years ago.
The size of your home and the demand for electricity will determine the size of solar panel system you’ll need and will ultimately have an impact on the total price.
|Size of Solar Panel System||Average Price|
To give the systems a bit of context, a 3 bedroom house is likely to need a 3-4kW system, coming to a cost of around £5,520 – £6,040.
How Long Do Solar Panels Last?
In addition to the cost of your investment, it’s good to have an idea of how long the solar panels are likely to last. The typical lifetime of solar panels is between 20-25 years but some of the best solar panels might stretch beyond this.
That gives plenty of time for those initial costs to be covered so you can start making a profit on your investment in solar energy.
Solar Panel Payback Time in the UK
To help give you an idea of how long solar panel payback time could be, we’ve used our solar payback calculator, a tool that works out your specific solar payback time using certain criteria.
Solar Panel Payback Time in the South of the UK
In this case, we’ve worked out the solar payback time of a property in London installing a 3kW solar system, as well as the following over a 20 year period:
- Daytime electricity rate of £0.1437 per kWh
- No export meter
- Panel degradation to 80% of year 1 output over 30 years
- Retrofit to an existing building (band D or above)
|Potential Solar Payback Time in London (3kW system)|
|Solar Panel Investment||£4,834.83|
|1st Year Electricity Savings||£187.13|
|Payback Time||11 years and 4 months|
|Total profit over 20 years||£952.26|
Solar Panel Payback Time in the North of the UK
Using the same set of criteria as above but with a south facing roof in Glasgow, a profit from solar panels can also be made over the course of 20 years in Scotland too.
|Potential Solar Payback Time in Glasgow (3kW system)|
|Solar Panel Investment||£4,834.83|
|1st Year Electricity Savings||£167.43|
|Payback Time||12 years and 5 months|
|Total profit over 20 years||£230.93|
This is without any government payments schemes being factored in such as the Feed-in Tariff (ended March 2019) and the Renewable Heat Incentive (eligibility with solar thermal only).
If you had your solar panels installed before the Feed-in Tariff closed in March 2019, then you’ll still receive payments and will have a shorter solar payback time as a result.
Won’t Overcast UK Weather Extend Solar Payback Time?
You might think that it would take a lot longer to see a return on your investment in the UK due to the number of overcast and cloudy days we experience each year. However, just because the sun is hidden behind the clouds, doesn’t mean that your solar panels won’t be generating energy.
While solar panels will be generating high levels of energy in direct sunlight, they still work on cloudy days, meaning that you can enjoy the benefits of solar power all year round.
Further Your Investment with a Solar Battery
By adding a solar battery to your solar panel system, you will be able to store up excess solar energy generated during the day (there’s likely to be quite a bit) to use after the sun sets. This will increase your energy bill savings further because without a solar battery, all the energy used during the night will be provided by the energy supplier.
Solar batteries do come at a price though, somewhere between £500 to £8,000 depending on the make and model.
Smart Export Guarantee
Renewable Heat Incentive
Under the Renewable Heat Incentive, those eligible can earn government payments for the heat being generated by their renewable heating system. When it comes to solar, this means installing a solar thermal system, which uses energy from the sun to heat the water for the central heating system as well as for the hot water taps.
Get Free Solar Panel Installation Quotes
To help get your solar panel installation off to the best possible start, complete our simple online form and you’ll get free installation quotes from up to 3 solar installers in your local area.
Getting multiple quotes gives you the greatest chance of finding the best possible deal, helping you to save money and time on the installation.