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What The Solar Panel Savings Calculator Works Out
- Annual generation: system size x about 850 kWh per kilowatt-peak, the UK average for an unshaded south roof. A common 4kWp roof produces around 3,400 kWh a year.
- Annual benefit: every kWh used in the house avoids buying one at the import rate (defaults to the current Ofgem price cap unit rate); every kWh exported earns the Smart Export Guarantee rate, typically half or less of the import price. At 50% self-use, standard rates and a mid-range SEG, a 4kWp system returns roughly GBP 700 a year.
- Simple payback: system cost divided by the annual benefit, usually inside a decade against panels warranted for 25 years. Zero-rated VAT and falling hardware prices have steadily improved the arithmetic, and the marginal panels are the cheap ones, so boldly sized systems earn the strongest returns.
- Self-use percentage: the lever that moves everything. An empty daytime house may use 25% to 35% of its generation; home workers, timer-shifted appliances and a hot-water diverter dumping surplus into the immersion push toward 70%, each step converting cheap export into expensive avoided import.
- Yield, orientation and shading (advanced): edit the kWh per kWp for your region (nearer 950 on the south coast, 750 in Scotland), apply an orientation factor (east-west splits lose 15% to 20% but spread generation across the day, often raising self-use) and a shading loss for chimneys and trees, which deserve optimisers or honest downgrading.
- Lifetime benefit and net profit (advanced): a year-by-year sum over the panel life with generation falling by the degradation rate (about 0.5% a year) and optionally the import price rising, less the install cost and one inverter replacement, the component expected to fail once. Shown with the simple annual return on the install.
- Adding a battery (advanced): the extra annual benefit from lifting self-use to the battery figure, and the battery's own payback. Batteries add several thousand pounds and are strongest for high evening users and those pairing cheap overnight tariffs with solar; EV owners effectively get a battery on wheels.
- Generation in the final year (advanced): what the panels still produce at the end of the period, typically about 88% of year one after 25 years.
- Carbon saved (advanced): generation x 0.207 kg CO2 per kWh of grid electricity displaced. MCS certification unlocks SEG payments, whose rates vary several-fold between suppliers and deserve an annual shop-around; most domestic installs proceed under permitted development.
Further reading: Energy Saving Trust: solar panels.