What you need to know about the payback period with solar panels.
When it comes to solar panels most people are pretty clued up when it comes to the environmental benefits.
Less fossil fuels to power your home = Better for the environment. Simple.
But it’s the financial side of solar panels that isn’t always so black & white.
One of the burning questions we get as solar panel installers in London & Kent, is ‘How long is the payback period for solar panels?’. This refers to how long it will take your the cost of your system to be covered by it’s savings.
And we get why people people ask it – solar panels are expensive, and there’s very little data shared by installers on exactly how much and when you’d make your money back from them.
The truth is that we actually CAN tell you exactly what your estimated savings & payback time will be, it just is very dependent on the system size, and your electricity usage.
Let’s dive a little deeper into this shall we…
The Numbers
According to Ofgem, the UK’s energy regulator, the average annual electricity usage sits at around 2,700 kWh.
This puts the average home’s electricity cost at £926.18 over the course of a year.
Now for a lot of people considering installing solar panels, this may be a little lower that what your usage & bills actually are.
Take a look at this chart below which shows the typical usage and cost for many common living arrangements in the UK:
| Property Type | Electricity Usage | Annual Electricity Bill |
| Ofgem Average | 2,700kWh | £926.18 |
| 1 Bedroom Flat | 2,000kWh | £686.06 |
| 2 Bedroom Flat | 2,000kWh | £686.06 |
| 2 Bedroom House | 3,000kWh | £1029.09 |
| 3 Bedroom House | 4,750kWh | £1,629.39 |
| 4 Bedroom House | 6,000kWh | £2,058.18 |
Now no matter your current usage or the size of system you get, solar panels will reduce the amount you have to pay annually.
How much exactly, depends on the number of panels and how much they generate.
A fairly standard solar setup in the UK is 8 panels, each with a peak power of 350W.
The size of this solar system is then 2.8kW (350×8=2800W).
In perfect conditions, this would mean an annual generation of 2,800kWh, which going off the country average, would more than cover an annual electricity bill.
However, most systems in the UK will generate around 80% of their peak output.
This then means a standard 8 panel system would generate around 2,240kWh of electricity per year.
That’s 83% of the current UK average, which translates to a huge £768 of energy bill savings.
So if year on year your raking in an extra £768 in savings, to know what your payback time is for your solar panels will depend on cost of the installation itself.
The Problem with Some Installers
We speak about this often, but more often than not you pay for quality in solar.
Many cheap firms may offer to install a system of this size for as little as £6,000, which would offer an attractive payback time of less than 8 years.
However, more often than not cheaper installers come with a low quality product, making it way more likely for costly issues to arise such as system faults and replacement parts needed.
This pushes that payback period way up.
A high quality solar installer will ensure that you not only receive high quality service at the point of installation, but also ongoing customer service which will allow you to maximise your returns.
This quality service may come at a higher premium of between £8,000 – £10,000, but will mean that your payback time is guaranteed between 10-13 years.
Meaning that for the remaining 12-15 years of the systems life, you won’t be paying anything for your solar energy.
This means your eventual savings will be 3x what you originally paid for the system.
Not bad if you ask us!
Going with a high quality installer can also offer numerous other benefits which can grow that payback period even more.
For example, during the bright summer months, solar panels will typically generate more electricity then your home actually needs.
This doesn’t have to go to waste.
A high quality installer will hook you onto what’s called a Solar Export Tariff, which allows you to sell that excess energy back to the grid.
This will further add to your annual savings and mean that your payback period could come much sooner than expected.
At JD Allen Solar, we hook all of customers onto the Export Tariff as standard with our installations.
Conclusion
In conclusion, the payback period is very dependent on three important factors – your current electricity usage, your solar panel system size and the quality of installer you use.
Taking the average electricity usage, with an average system from a high quality installer, you’d be looking at paying off your system entirely after 10-13 years,
At JD Allen Solar, we take pride in delivering high quality service that sees our customers go one step further.
The quality systems we install, coupled with our ongoing support and advice gives our installations an average payback time of 9-10 years, which is much better than average.
If you’d like to find out more about the type of system you can have installed,
And the payback period you can expect
Ask us today and get an instant response for our team.
