Solar panel payback calculator
Solar economics turn on self-consumption: energy you use yourself is worth the retail price, energy you export is worth far less.
kWp
kWh per kWp
%
per kWh
per kWh
%
years
Payback period
10.25years
- Annual saving
- 731.50
- Lifetime saving
- 17 231.18
- Net benefit over the system life
- 9731.18
- Return on investment
- 129.7 %
- Annual generation
- 4750 kWh
- Levelised cost of the electricity
- 0.0670
- Exported to the grid
- 2850 kWh
Show the working
- Installed cost = 7500
- System size = 5
- Specific yield = 950
- Self-consumption = 40
- Import price = 0.28
- Export price = 0.07
- Annual degradation = 0.5
- System life = 25
- Annual generation = 5 * 950 = 4750
- self_used = 4750 * 40/100 = 1900
- Exported to the grid = 4750 - 1900 = 2850
- Annual saving = 1900 * 0.28 + 2850 * 0.07 = 731.5
- Payback period = 731.5 > 0 ? 7500 / 731.5 : 0 = 10.2529
- degradation_factor = 0.5 > 0 ? (1 - (1 - 0.5/100)^25) / (0.5/100) : 25 = 23.556
- Lifetime saving = 731.5 * 23.556 = 17 231.2
- Net benefit over the system life = 17 231.2 - 7500 = 9731.18
- Return on investment = 7500 > 0 ? 9731.18/7500*100 : 0 = 129.749
- Levelised cost of the electricity = 4750 * 23.556 > 0 ? 7500 / (4750 * 23.556) : 0 = 0.067 029 7
Values are shown to six significant figures here; the arithmetic itself runs on exact fractions and is only rounded where a number is printed.
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The formula
- annual saving = self-consumed kWh x import price + exported kWh x export price
- degradation factor sums a geometric series over the system life
A battery raises self-consumption from around 35% to 65 or 70%, which is usually the largest lever on the payback.
This ignores inflation in electricity prices, which historically shortens the payback considerably.