Solar Panel Payback Calculator
How many years solar panels take to pay for themselves, and what they save over 25.
Good to know. Panels earn the most on the power you use yourself: every kWh you don’t buy is worth more than one you sell.
Not financial advice. Uses only the numbers and rates you enter — no live data.
How it works
In plain words
The panels produce the size in kW times the yearly output per kW, falling 0.5% a year as they age. Power you use yourself saves the full electricity price; power you export earns the export rate. Add up the savings year by year, with electricity prices rising, until they pass the cost.
The formula
output = kW × kWh per kW × 0.995^(year − 1) saving = output × (self-use × price + (1 − self-use) × export rate) payback = the year the savings add up to the cost
Worked example
A 4 kW system makes about 3,800 kWh a year. Using half and exporting half saves 1,900 × 0.25 + 1,900 × 0.08 = 627 in the first year. With prices rising 2% a year, the 7,000 cost is paid back in 10.6 years.
Sources
- European Commission Joint Research Centre, PVGIS Yearly solar output per kW for any location in Europe, Africa and Asia.
- NREL, PVWatts Calculator Yearly solar output for locations in the US and worldwide.
- Jordan and Kurtz, Photovoltaic Degradation Rates: An Analytical Review, NREL, 2012 A median loss of about 0.5% of output a year.
Sources checked September 30, 2026. 3 automated tests check its answers on every change.
About the solar panel payback calculator
Solar panels pay for themselves by cutting your electricity bill. How fast depends on four things: what the system costs, how much sun your roof gets, what you pay for electricity, and how much of the power you use yourself rather than send to the grid.
The last one matters more than most people expect. Every kilowatt-hour you use yourself saves the full price you would have paid, often 25 to 35 cents or pence. Every one you export earns only the export rate, often a fraction of that. A household that is home in the day, runs the dishwasher and washing machine at noon, or has a battery or electric car uses more of its own power and pays back sooner.
For the yearly output, a good rule is 850 to 1,000 kWh per kW of panels in the UK, Ireland and northern Europe, 1,200 to 1,400 in southern Europe and much of the US, and more in deserts. A south-facing roof at about 30 to 40° does best; east and west roofs make 15 to 20% less. The free PVGIS tool from the European Commission and NREL’s PVWatts give the figure for an exact address.
The calculator assumes panels lose 0.5% of their output a year, a typical figure, and last at least 25 years. Inverters often need replacing once in that time, at around 10% of the system cost. Most systems in sunny places pay back in 6 to 10 years, and in cloudier ones in 8 to 14.
Questions people ask
How long do solar panels take to pay for themselves?
Usually 6 to 14 years, depending on the cost, your sunshine, your electricity price and how much of the power you use yourself.
How much electricity does a 4 kW solar system produce?
About 3,400 to 4,000 kWh a year in the UK and northern Europe, and 5,000 to 6,000 in sunnier places.
Is it better to use solar power or sell it?
Use it, when you can. Power you use saves the full retail price, while exported power usually earns much less.