Solar Panel Payback Calculator
Work out how many years solar panels take to pay for themselves, with the share you use yourself, what you export and the decline in output.
Pays for itself after
13 years and 5 months
Saving in the first year
$385.00
Saving over the lifespan
$9,069
Net result
$4,069
Return in the first year
7.7 %
Savings against the investment
- Total savings
- Investment
Show the table
| Year | Total savings | Investment |
|---|---|---|
| 0 | $0 | $5,000 |
| 1 | $385 | $5,000 |
| 2 | $768 | $5,000 |
| 3 | $1,149 | $5,000 |
| 4 | $1,528 | $5,000 |
| 5 | $1,906 | $5,000 |
| 6 | $2,281 | $5,000 |
| 7 | $2,655 | $5,000 |
| 8 | $3,027 | $5,000 |
| 9 | $3,397 | $5,000 |
| 10 | $3,765 | $5,000 |
| 11 | $4,131 | $5,000 |
| 12 | $4,495 | $5,000 |
| 13 | $4,858 | $5,000 |
| 14 | $5,218 | $5,000 |
| 15 | $5,577 | $5,000 |
| 16 | $5,934 | $5,000 |
| 17 | $6,290 | $5,000 |
| 18 | $6,643 | $5,000 |
| 19 | $6,995 | $5,000 |
| 20 | $7,345 | $5,000 |
| 21 | $7,693 | $5,000 |
| 22 | $8,040 | $5,000 |
| 23 | $8,385 | $5,000 |
| 24 | $8,728 | $5,000 |
| 25 | $9,069 | $5,000 |
Please note: This is an example calculation, not financial advice. Personal circumstances, changes in rules and rates, and additional costs are not included. If in doubt, talk to a financial adviser.
Changing electricity prices, maintenance, a new inverter and taxes are not included.
How this number is calculated
The blocks use your input. Change a value above and they update with it.
Step 1 · Used yourself
Step 2 · Exported
Step 3 · Saving in the first year
Step 4 · Payback in years
Step 5 · Saving over the lifespan
Step 6 · Net result
How the calculation works
Work out how many years solar panels take to pay for themselves. Enter the cost and the output, the share you use yourself and what you get for exporting, and see the payback period and the saving over the whole lifespan.
Electricity you use yourself does not have to be bought: it saves the full electricity price. For electricity you export, you get the export rate. Together that is the saving in the first year. Panels produce a little less every year, so the saving drops each year by the decline. The calculator adds up the savings and works out when they have paid back the cost of the system.
Formula
Saving in year 1 = used yourself × electricity price + exported × export rate. With a decline d per year: total after t years = saving in year 1 × (1 − (1 − d)^t) ÷ d. Payback t = ln(1 − cost × d ÷ saving in year 1) ÷ ln(1 − d).
Assumptions
- The electricity price and the export rate stay the same. If electricity gets more expensive, the panels pay back sooner.
- The share you use yourself stays the same every year.
- Maintenance and a new inverter are not included. An inverter often lasts 10 to 15 years; add its cost to the system cost if you want to include it.
- Taxes and grants are not included separately; enter the cost after any grant or credit.
- The payback period is rounded to whole months, amounts to whole units.
Example calculations
The button fills in the calculator above, so you can carry on from there.
-
Low export rate
Pays for itself after
11 years and 9 months
System cost $5,000.00 · Output per year (kWh) 3,500 · Used yourself (%) 30 · Electricity price per kWh $0.30 · Export rate per kWh $0.05 · Decline per year (%) 0.5 · Lifespan (years) 25
-
Using more yourself
Pays for itself after
7 years and 3 months
System cost $5,000.00 · Output per year (kWh) 3,500 · Used yourself (%) 60 · Electricity price per kWh $0.30 · Export rate per kWh $0.05 · Decline per year (%) 0.5 · Lifespan (years) 25
-
Large roof
Pays for itself after
8 years and 1 month
System cost $9,000.00 · Output per year (kWh) 7,000 · Used yourself (%) 40 · Electricity price per kWh $0.30 · Export rate per kWh $0.07 · Decline per year (%) 0.5 · Lifespan (years) 25
Frequently asked questions
What difference does net metering make?
With full net metering, every exported kWh is worth the full electricity price. With the default values, the panels then pay back after 4 years and 10 months, against 11 years and 9 months with a low export rate of 0.05 per kWh.
How can solar panels pay back faster?
By using more of the electricity while the sun shines, for example by running appliances or charging a car during the day, or with a home battery. With 60% used yourself instead of 30%, the payback with the default values drops to 7 years and 3 months.
What if I pay to export?
Some tariffs charge for exported electricity. If the export rate is below zero, enter a negative amount.
How much do solar panels produce?
It depends on where you live, the direction and tilt of the roof, and shade. In the UK and northern Europe often 850 to 1,000 kWh per kWp a year, and more in sunnier places. The quote gives the expected output for your roof.
What if the payback is longer than the lifespan?
Then, with these assumptions, the system does not pay for itself within its lifespan and the net result is negative. Check whether you can use more yourself, whether the output is right, or whether the system can cost less.
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