Solar Panel ROI Calculator

How the solar panel ROI calculator works

Most solar quotes you will see in the UK lead with one seductive number: "save up to £X a year". This calculator works backwards from your actual roof and your actual tariffs, so the number it produces is yours rather than a national average with a marketing gloss. The maths is deliberately simple, and every assumption is visible in the inputs above, because the biggest risk in solar is not the technology — it is a quote built on sunshine you will never see.

The core calculation is annual generation: system size in kilowatts-peak multiplied by your region's typical yield in kWh per kWp per year, adjusted for roof orientation and shading. A south-facing, unshaded 4 kWp system in the South East generates roughly 4 × 1,050 = 4,200 kWh a year. Move that same system to Scotland facing east with light shading and you are looking at roughly 2,600 kWh — a 38% difference before a single tariff enters the picture. This is why regional yield matters far more than most brochures admit.

Self-consumption and the Smart Export Guarantee

Your savings come from two streams. The first is self-consumption: electricity you generate and use yourself, which saves you the full import tariff — currently around 24p per kWh for a typical UK household, though time-of-use tariffs vary widely. The second is export: surplus electricity you send back to the grid under the Smart Export Guarantee (SEG), the scheme that replaced the old Feed-in Tariff in 2020.

SEG rates are a postcode lottery of supplier choice. Ofgem requires licensed suppliers to offer an export tariff, but the rate is theirs to set: in 2026 the spread runs from under 4p to around 15p per kWh, with Octopus's outgoing tariffs and similar competitive offers at the top end. This calculator defaults to 8p as a realistic middle, but if you can access a 15p export tariff your payback drops noticeably — change the input and watch what happens. The honest default assumption for self-consumption is 40%: a household that is out during the day uses far less of its own generation than one where someone is home with a washing machine on a timer. A battery can push this to 60–80%, but batteries have their own payback maths — see our solar battery payback calculator, which is blunt about the fact that they rarely pay for themselves at current prices.

Orientation and shading: the reality check

A perfect south-facing roof at the optimum tilt (around 30–40 degrees in the UK) is the gold standard, but most real roofs are not perfect, and that is fine. South-east or south-west loses only about 5%; east or west loses roughly 15% — and an east-west split across two roof faces can actually be attractive, because it spreads generation across the morning and evening when you are more likely to be home using power. North-facing roofs are the one genuinely poor option: at 60% of south-facing output the maths usually fails.

Shading deserves more respect than it gets in sales pitches. A single chimney casting a shadow across one panel can drag down a whole string of older panels unless the system uses optimisers or micro-inverters, which isolate each panel's performance. If your roof has dormers, a neighbouring extension, or a tree that will keep growing, price optimisers in from the start. The "heavy shading" factor in this calculator (0.75) is deliberately conservative; some shaded roofs do worse. Any quote that ignores an obvious shadow is a quote to bin.

Costs: what should solar actually cost in 2026?

The default of £1,600 per kWp reflects a fair 2026 UK price for a quality installation by an MCS-certified company: panels, inverter, mounting, scaffolding, and paperwork. A 4 kWp system at £6,400 is a reasonable benchmark; prices below £1,300/kWp should prompt questions about panel quality and aftercare, while prices above £2,000/kWp need justifying with premium kit or difficult access. Get at least three quotes, and make sure each one states the panel and inverter brands, the projected annual generation in kWh, and the warranty terms separately for panels (typically 25-year performance warranty) and the inverter (typically 10–12 years — the inverter is the part most likely to need replacing).

Battery pairing and the 25-year picture

The 25-year profit figure uses a 22.5 multiplier rather than 25, which is our shorthand for 0.5% annual panel degradation — panels lose a small fraction of output each year, guaranteed in writing by the manufacturer. Even so, most systems are still generating 85–90% of day-one output at year 25. One cost not in the calculator is the likely inverter replacement around year 12–15 (roughly £800–£1,200); mentally subtract that from the 25-year profit for the full picture. Pairing a battery raises self-consumption and therefore annual savings, but at £4,000–£6,000 installed, the battery's own payback is typically 15–20+ years — longer than its warranty. Batteries make sense for high import-tariff households or backup needs, not as a default add-on.

MCS certification and paperwork

Insist on an MCS-certified installer and an MCS certificate on completion. It is your gateway to SEG payments, and it matters for the property's paperwork when you sell: buyers' solicitors increasingly ask for it. Your installer should also handle the DNO (distribution network operator) notification — systems under 3.68 kW per phase need only notification, larger ones need prior approval, which can take weeks. Plan for this in your timeline.

Getting quotes: red flags and green flags

Green flags in a solar quote: the panel and inverter brands are named, the projected annual generation is stated in kWh (not just "up to £X savings"), scaffolding and DNO notification are itemised, and the salesperson leaves you a written quote to consider rather than pushing a same-day discount. Red flags: pressure tactics ("this price expires today"), generation estimates far above what this calculator shows for your inputs, vague "tier 1 panels" branding without a manufacturer name, and any suggestion you do not need MCS certification. A reputable installer will also ask about your consumer unit's age and your roof's condition — anyone who quotes without seeing the roof, even via satellite imagery, is guessing.

Planning permission and conservation areas

Most UK solar installations are permitted development and need no planning permission, provided panels do not protrude excessively above the roof slope and are not on a listed building. The main exceptions are flats, listed buildings, and some conservation areas and Areas of Outstanding Natural Beauty, where the local planning authority may refuse or require panels on non-visible roof faces. Check with your council before paying a deposit if any of these apply — installers in these areas will know the local rules.

When solar is a bad idea

Solar is not for every roof, and a trustworthy calculator should say so. Skip it — for now — if your roof is north-facing, heavily shaded, needs replacing within a decade (re-roof first; removing and refitting panels costs thousands), or is a listed building or in a conservation area where planning permission is likely refused. Renters obviously cannot install, though the grant finder may show support for your situation. Everyone else: run the numbers honestly above, and let the payback — not the brochure — decide.