Methodology

How Solar Payback Calculator calculates its estimates, where the data comes from, and when each source was last checked.

What the calculator estimates

For a home solar system, the calculator estimates the yearly electricity it generates, the money that saves on electricity you would otherwise buy, and how many years those savings take to add up to the installed price. It looks 25 years ahead. Everything runs in your browser from the figures on the page.

The model

For each year y from 1 to 25:

generation(y) = system size × specific yield × (1 − degradation)^(y − 1)

price(y) = electricity price × (1 + yearly price change)^(y − 1)

used directly(y) = min(generation(y) × share used directly, annual use)

surplus(y) = generation(y) − used directly(y)

from battery(y) = min(surplus(y) × round-trip efficiency, capacity × 365 × round-trip efficiency, annual use − used directly(y))

savings(y) = (used directly(y) + from battery(y)) × price(y)

Then, over the whole period:

installed cost = system size (kW) × 1,000 × price per watt + battery price

cumulative savings(y) = savings(1) + … + savings(y)

net gain = cumulative savings(25) − installed cost

return over 25 years = net gain ÷ installed cost × 100%

Payback is the first year in which cumulative savings reach the installed cost. To give a figure with a decimal, the calculator assumes that year’s savings arrive evenly and works out how far into the year the crossover falls:

payback = (year − 1) + (installed cost − savings up to the previous year) ÷ savings in that year

If cumulative savings never reach the cost within 25 years, the result is “not within 25 years”.

System size. If you leave it blank, the system is sized so its first-year generation equals your annual use: size = monthly use × 12 ÷ specific yield.

A total quoted price is turned into a price per watt by dividing it by the system size in watts, so the two ways of entering a price give the same result.

What each input means and where its starting value comes from

Specific yield (kWh per kW per year)

How much electricity one kW of panels generates in a year at a location. Starting values for each listed city come from two public solar tools, run with the same settings in both countries: a 1 kW system, 14% system losses, mounted on a roof, tilted at 30° and facing due south.

• United States: PVWatts version 8 from the National Laboratory of the Rockies (formerly NREL), annual AC output, using typical-year weather from the National Solar Radiation Database.
• United Kingdom: PVGIS 5.3 from the European Commission Joint Research Centre, average yearly production, using the PVGIS-SARAH3 solar radiation database for 2005 to 2023.

Your own roof may differ: shade, a steeper or shallower pitch, or a roof facing east or west all change the figure. You can enter your own yield for any address using either tool.

Electricity price

• United States: the average residential price for the whole country from the US Energy Information Administration’s Electric Power Monthly (Table 5.6.B, year to date). Prices vary a lot between states and utilities.
• United Kingdom: Ofgem’s average electricity unit rate under the energy price cap for people paying by Direct Debit in England, Scotland and Wales, for the current cap period. The cap limits default tariffs; it is not every household’s rate. Northern Ireland is not covered by the cap.

Only the price per kWh is used. Fixed daily or monthly charges are left out because you pay them whether or not you have solar.

Electricity use

• United States: the average yearly electricity bought by a residential customer, from the US Energy Information Administration, divided by 12 and rounded to whole kWh.
• United Kingdom: Ofgem’s typical domestic consumption value for a medium user on a single-rate meter, divided by 12.

Installed price

• United States: no starting value. A national installed-price figure has not yet been verified against a primary source, so you enter the price from your quote. Until you do, the calculator shows generation and savings only.
• United Kingdom: the median cost per kW from the Department for Energy Security and Net Zero’s solar PV cost data for the 2025/26 financial year, which is based on the MCS installation database. The calculator picks the size band your system falls in (0–4 kW, over 4 to 10 kW, or over 10 to 50 kW) and converts the cost per kW to a cost per watt. Above 50 kW there is no starting value.

All prices are used exactly as the source publishes them.

Panel degradation

The starting value of 0.5% a year is the median of nearly 2,000 reported degradation rates in Jordan and Kurtz, “Photovoltaic Degradation Rates — An Analytical Review” (NREL, 2012). Our degradation guide explains it further.

Yearly electricity price change

The starting value is a rise of 3% a year. This is a scenario for you to change, not a forecast and not a published figure. Try several values to see how sensitive your result is.

Share used directly

The share of solar generation your home uses as it is produced. The starting value of 100% means all generation up to your annual use replaces electricity you would otherwise buy. Lower it if you are out during the day; a battery can then make up part of the difference.

Battery

Usable capacity, installed price and round-trip efficiency are all entered by you from the battery’s datasheet and quote. There are no starting values.

Simplifications

• Electricity sent to the grid is valued at zero. No export payments, grants or similar payments are included.
• The battery runs at most one full cycle a day, is worked out from yearly totals rather than day by day, does not lose capacity and is not replaced within 25 years. This makes battery savings an upper limit.
• No maintenance, inverter replacement, insurance or financing costs are included.
• Future savings are not discounted to today’s money.
• The installed price is paid in full at the start.
• No carbon savings are shown. Grid emissions figures for each country have not been verified yet, and the calculator does not use an unverified factor.

Every figure in use

Each value below is stored with the page it came from and the date it was checked. Values marked “not available yet” are never replaced with an estimate; the calculator disables that option or asks you for the figure.

Data sources

2 data points are awaiting verification. Until verified, they are not used in any result.

Limitations

Estimates depend on your inputs and on averages from published sources. Real prices vary by provider, location and timing. Treat results as a starting point, not a quote.

Corrections

If you find a figure that is wrong or out of date, please let us know.