How it works
Payback is how long the money solar saves you takes to add up to what the system cost. We estimate what the system produces each year, split it into the power you use at home (worth the full price you pay) and the power you export (worth only your export credit), and add up the savings year by year until they pass the cost after rebates.
Each year we raise your electricity price by the rate you choose and reduce panel output by 0.5% for ageing. Self-use matters most: power you use yourself is usually worth several times more than power you export.
The formula
net cost = kW × 1,000 × cost per watt − rebates
production, year = kW × sun hours × 365 × 0.8 × (1 − 0.005)^(year − 1)
saving, year = production × self-use × price that year
+ production × (1 − self-use) × export credit
payback = the year cumulative savings pass the net cost
Worked example
An 8 kW system at $2.60 per watt with no rebates, 4.5 sun hours, 18.2¢ per kWh and a 5¢ export credit. Kept simple: flat prices and no ageing.
| Step | Working | Result |
|---|---|---|
| Cost | 8,000 W × $2.60 | $20,800 |
| Yearly production | 8 × 4.5 × 365 × 0.8 | 10,512 kWh |
| Saving, all used at home | 10,512 × $0.182 | $1,913 a year |
| Payback, all used at home | $20,800 ÷ $1,913 | 10.9 years |
| Saving, half exported | 5,256 × $0.182 + 5,256 × $0.05 | $1,219 a year |
| Payback, half exported | $20,800 ÷ $1,219 | 17.1 years |
More on what changed in 2026: Is solar still worth it in 2026?
Frequently asked questions
What is a good solar payback period?
Under about 10 years is good: panels typically carry 25-year performance warranties, so you get 15 or more years of low-cost power afterwards. Over about 15 years is marginal, because an inverter replacement and repairs eat into the gain.
Does this include the 30% federal tax credit?
No. The US residential credit ended for homeowner-owned systems placed in service after December 31, 2025. Enter any state or utility rebate you qualify for in the rebates box. UK prices include 0% VAT on solar (until March 31, 2027); Australian defaults already subtract the STC rebate.
Why does the share of solar I use matter so much?
Each kWh you use yourself saves the full price you pay, while each kWh you export earns only your export credit, which is often a quarter or less of that. Running dishwashers, laundry and EV charging during sunny hours raises your self-use.
Should I add a battery?
A battery raises self-use and gives backup in an outage, but it adds several thousand to the cost. It pays best where export credits are low and evening prices are high. See our backup power guide for cheaper backup options.
How accurate is this estimate?
It is a planning estimate. Your real payback depends on your roof's direction and shading, your tariff and how your prices change. Use the cost and production figures from a written installer quote for the closest answer.
Sources
- Default costs: National average quote before incentives, EnergySage 2026; About £1,500–1,800 per kW installed (MCS data, 2026) (UK); About $0.95 per watt installed after the STC rebate, 2026 (Australia).
- Default prices: US average residential price, EIA 2026 forecast (checked Oct 2026); Ofgem price cap unit rate, 1 Oct – 31 Dec 2026, Direct Debit (VAT on electricity is 0% until 31 Mar 2027).
- EnergySage, federal solar tax credit in 2026.
Related guides
Estimates are for planning only and are not financial advice. Get written quotes before you buy.