What Is the Payback Period of Solar PV Panels in the UK? July 2015

In an earlier article, we talked about how installing solar photovoltaic (PV) panels can reduce your utility bill.  A modestly sized 4 kW system is often enough to reduce your monthly electricity bill by 50%.

Over a long enough time period, those savings combined with earnings from the feed-in tariff will eventually exceed the upfront cost of your solar installation.   Measured in years, this breakeven point is known as the “payback period.”

Once you recoup those upfront costs, you continue receiving the benefits.

In the cloudy United Kingdom, however, how long does it really take for solar to pay for itself?  How many months and years do you have to wait for your accumulated savings to match what you initially paid to install your panels?

Let’s take a look.

Realistic Solar Payback Periods in the UK

Before we dive into payback periods, it’s important to differentiate between solar leasing and solar ownership:

  • If you lease (or rent) your PV panels, you receive a brand-new solar installation for free.  Because there is no upfront cost associated with leasing, those panels never truly “pay” for themselves.  You benefit from cheaper electricity – electricity that just happens to also be pollution-free.  So you’re saving both money and the planet.  However, there is no official breakeven point when you “rent” your solar installation.
  • If you own your panels (using cash or loans), solar becomes an investment – an investment that carries an upfront cost and long-term returns.  There is eventually a point at which the money you save exceeds the money you initially spent.

So if you own your solar installation, what is a reasonable payback period in the UK?

As the infographic above explains, the average payback period for a 4 kWp PV system is just over 9 years under ideal conditions.

However, what does “ideal conditions” mean?

To receive the shortest possible solar payback period, your home should have a South-facing roof that slants at a 40° angle.  It should also receive as much direct sunshine as possible (i.e. zero to little shading).

It’s also worth noting that 9 years is simply a nationwide average:

  • Homes in the Canterbury and Bournemouth region might enjoy payback periods just over 8 years.
  • Residential properties near Shetland, Aberdeen, and Glasgow might have to wait closer to 10 years for their solar investments to pay off.

How long is the payback period for a home that doesn’t have ideal solar conditions?

This varies depending on the size, shape, and orientation of your rooftop.  However, you’re basically guaranteed to make all of your money back provided that your home’s EPC rating is D (or higher) and the installation is performed by an MCS-certified solar professional.

To better understand whether solar panels are really worth investing in, be sure to read our comprehensive overview on Solar Economics in the United Kingdom.

If you’re ready to begin exploring your solar options today, request 3 free quotes today.