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Guide 10 of 107-minute read · short version 1 minute

Solar costs, savings and payback

What solar panels, plug-in kits and batteries cost in the UK, where the savings come from, and how to work out how long they take to pay for themselves.

Looking for a specific answer? Our FAQ page Costs, savings and payback answers 4 questions, each with its source.

Start here

The short version

  1. The Energy Saving Trust puts a typical home system at around £7,600 for about 4.5 kWp. Plug-in kits start from about £450. Batteries are around £5,000 to £8,000.
  2. The saving comes from two things: electricity you no longer buy, and payments for what you export.
  3. Using more of your own solar saves more, because each unit you use is worth about twice a unit you export.
  4. Payback is the cost divided by the yearly saving. In our example below, it is about 11 years for rooftop panels.
  5. Allow for a new inverter after about 12 years. Installation has 0% VAT until 31 March 2027.
How payback worksIllustrative example over 25 years. Without solar, the cost of the electricity the panels would replace adds up year by year. With solar, you pay upfront, then gain each year. The point where the two lines cross is the payback point, here about 11 years. A step at year 12 shows an inverter replacement.Illustrative example: what you pay over time£0k£5k£10k£15k£20kPayback: about 11 yearsinverter replaced in year 120510152025yearsBills the panels replaceCost of solar£7,600 system, £700 a year saved: example figures only.
Payback is where the money saved catches up with what you paid.

Layer 2

In more detail

Costs, a worked example of the savings, and the extra costs people forget.

What it costs

Rooftop system, about 4.5 kWpAround £7,600 (Energy Saving Trust)
Plug-in kitFrom around £450 (Energy Saving Trust)
Home batteryAround £5,000 to £8,000; around £4,600 for a 5 kWh system (Energy Saving Trust)
Replacement inverterUsually needed after around 12 years
VAT on installation in a home0% until 31 March 2027, then 5% unless extended

Prices vary with roof access, scaffolding, the equipment and whether your consumer unit needs upgrading, so get at least three quotes. See Choosing a good installer.

Where the savings come from

Where a year's solar saving comes fromExample: a 4.5 kWp system making 3,800 kWh a year. If 40% is used at home, that is 1,520 kWh worth about £400 at 26.32p. The other 2,280 kWh exported at 12p earns about £274. Total about £674 a year.Example: 4.5 kWp making 3,800 kWh a yearUsed at home1,520 kWh (40%)Exported2,280 kWh (60%)1,520 kWh × 26.32p (bills avoided)£4002,280 kWh × 12p (export payments)£274Total yearly benefitabout £674Using more yourself raises the saving, because each unityou use is worth about twice a unit you export.Example figures. Use your own quote, usage and tariff.
A worked example. Your own split between used and exported will differ.

In the example, a 4.5 kWp system makes 3,800 kWh a year, within the usual range of around 750 to 1,100 kWh per kWp. The household uses 40% as it is made and exports the rest. At Ofgem’s average cap rate of 26.32p and a typical export rate of 12p, that is worth about £674 a year, in line with the Energy Saving Trust’s examples of around £600 to £750.

With a cost of £7,600 and a saving of about £700 a year, simple payback is about 11 years. Panels should last 25 years or more, so the later years are profit, less the cost of a new inverter.

How to work out your own payback

  1. Get the system cost from a written quote.
  2. Estimate the yearly generation, from the quote or our generation estimator.
  3. Estimate how much you will use yourself. Out at work all day, it may be 30% or less; at home, or with a battery, much more.
  4. Yearly saving = used kWh × your unit rate + exported kWh × your export rate.
  5. Payback = cost ÷ yearly saving. Compare it with the 25-year life of the panels, and allow for a replacement inverter.

Plug-in kits

At around £450 and a saving of £70 to £100 a year, a plug-in kit takes roughly 4.5 to 6.5 years to pay back, using the Energy Saving Trust’s figures. Try our plug-in savings calculator.

Batteries

A battery’s payback depends on how much it shifts each day and the gap between your cheap and normal rates. It can be longer than its typical 10 to 12-year life, so do the sums first. See Home batteries and our battery calculator.

Costs and checks people forget

Key words

Payback
How long until the savings add up to what you paid.
Self-consumption
The share of your solar electricity you use as it is made.
Export rate
What your supplier pays for each kWh you send to the grid.
Layer 3For the technically mindedBeyond simple payback

What simple payback leaves out

  • Price changes: the price cap is reset every quarter, and export rates change. The 26.32p rate excludes VAT, which has been removed from domestic electricity bills from 1 October 2026 to 31 March 2027; if VAT returns, each unit you use yourself is worth more. Rising prices shorten payback; falling prices lengthen it.
  • Ageing: panel output falls slowly over the years; check what the manufacturer’s performance warranty guarantees.
  • The cost of money: for a fairer comparison with savings or a loan, discount future savings (net present value), or work out the internal rate of return.
  • Standing charges: these don’t change with solar, so bill savings come only from the unit rate.

Self-consumption in practice

Self-consumption depends on when you use electricity, not just how much. Half-hourly smart meter data and a generation estimate for your roof give the best figure. Typical levers are daytime use of appliances, a hot water diverter, daytime car charging and a battery.

Frequently asked questions

How much do solar panels cost?

The Energy Saving Trust puts the average home solar system at around £7,600 for about 4.5 kWp, roughly 12 panels. Installation in a home currently has 0% VAT, under the relief scheduled to run until 31 March 2027. Prices vary with roof access, scaffolding and the equipment chosen, so compare at least three quotes.

Full answer with sources

How much does a home battery cost?

The Energy Saving Trust says battery storage tends to cost around £5,000 to £8,000. Its battery guide gives a wider range of £1,500 to £10,000 and around £4,600 for a 5 kWh system.

Full answer with sources

How long do solar panels take to pay for themselves?

It depends on the cost, how much the panels generate, how much of the electricity you use yourself and what you are paid for exports. The Energy Saving Trust publishes payback estimates for different parts of the UK and for people who are home all day, half the day or out. Divide the cost by your realistic yearly saving, and allow for the inverter, which usually needs replacing after around 12 years.

Full answer with sources

How long do solar panels last?

The Energy Saving Trust says solar panels should last 25 years or more, and that an inverter usually needs replacing after around 12 years.

Full answer with sources

Can I get paid for the electricity plug-in solar exports?

Not normally. Citizens Advice says that under the current rules you cannot be paid for unused power from a plug-in kit, so you use it or lose it. Smart Export Guarantee payments need an MCS-certified (or equivalent) installation, which a plug-in kit will not normally have, although you can ask your supplier what it offers.

Full answer with sources

Do I need to tell my home insurer before installing solar panels?

You should. Insurers such as LV= say fitting panels is a major change to your home that could affect your cover and premium, and the Energy Saving Trust advises contacting your buildings and contents insurer before installing. For plug-in solar the government specification makes the user responsible for checking whether it affects their insurance.

Full answer with sources

Are solar panels covered by buildings insurance?

Often, if they are fixed to the home. Some insurers, for example LV=, say they cover panels as part of the permanent fixtures of the property, but every policy has limits. Check that your sum insured is enough to rebuild the home including the panels, and read the policy wording for exclusions. Free-standing or plug-in kits may be treated differently, so ask your insurer.

Full answer with sources

What if a company offers free solar panels in return for renting my roof?

Rent-a-roof deals involve granting a long lease of your roof space. UK Finance's lender template shows lenders expect to be asked to consent to the installation, to the lease and to its registration, and that the borrower must tell their buildings insurer and be warned that the lease is a long-term, legally binding agreement. Speak to your lender and take independent legal advice before you sign.

Full answer with sources

Want to check the numbers for your home? SolarBot can talk you through the sums with your own figures.

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Official sources

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Written 2 October 2026. General information, not legal, electrical or financial advice.