Are Solar Panels Worth It in 2026? UK Payback by System Size
Short answer: yes, and the maths is stronger than it has been in years. Electricity is 26.11p/kWh. SEG export rates are up to 16p. 0% VAT runs until March 2027. A typical 4kW system saves roughly £750 a year and pays for itself in 6-9 years. After that, it is free electricity for another 15-20 years. Here are the real numbers for every system size.
The question everyone asks: is solar actually worth it right now?
It is the first thing anyone Googles before they even look at panel brands. And fair enough: solar is a four-figure purchase that sits on your roof for 25 years. You want to know the numbers before you commit.
The short version: at today's electricity price of 26.11p/kWh, a solar panel system in the UK pays for itself in 6-9 years. After that, the electricity is effectively free. Over a 25-year panel lifetime, a 4kW system saves roughly £18,000-£23,000 compared to buying all your electricity from the grid.
That is the headline. The rest of this article is the working, broken down by system size, so you can run the numbers against your own roof and your own usage.
The three things working in your favour right now, and none of them are permanent: high electricity prices (26.11p/kWh, up 13% from the previous cap), decent SEG export rates (12-16p/kWh), and 0% VAT on solar equipment and installation until 31 March 2027. If any two of those three weaken, the payback gets longer. Right now, all three are aligned.
How much do solar panels save? Payback by system size
The table below assumes a south-facing roof in the UK Midlands, unshaded, with panels tilted at 35 degrees. Generation figures are real-world UK averages from the MCS PV database. Installation costs include 0% VAT at current 2026 market rates. SEG is calculated at 15p/kWh (a realistic middle-ground rate - you can get 16p from Ecotricity if you are their customer, 12p from Octopus, 15p from British Gas or EDF, or less from others).
| System Size | Panels | Annual Generation | Installed Cost | Annual Saving | Payback | 25-Year Net Saving |
|---|---|---|---|---|---|---|
| 2kW | 5-6 | 1,900 kWh | £3,500-£4,500 | £362-£409 | 8.5-12 years | £9,100-£10,200 |
| 3kW | 7-8 | 2,850 kWh | £4,500-£5,500 | £543-£614 | 7.5-10 years | £13,600-£15,300 |
| 4kW Best Value | 9-11 | 3,800 kWh | £5,500-£7,000 | £724-£810 | 7-9 years | £18,100-£20,300 |
| 5kW | 12-14 | 4,750 kWh | £7,000-£8,500 | £905-£1,013 | 7-9 years | £22,600-£25,300 |
| 6kW | 15-16 | 5,700 kWh | £8,000-£10,000 | £1,086-£1,216 | 6.5-9 years | £27,200-£30,400 |
A few things worth pointing out in that table. First, the "sweet spot" for UK homes is 4kW: it fits on most roofs, the cost-per-watt is good, and it does not trigger G59/G99 fast-track limits (stays under 3.68kW inverter output, which is G98 notification-only territory). Second, bigger systems pay back faster because the fixed costs (scaffolding, labour, inverter) spread over more panels. Third, those 25-year net saving figures assume electricity prices rise 3% a year, which is roughly the 10-year average. If they rise faster, you save more.
With a battery the numbers shift. Adding a 5kWh battery (£3,000-£4,500) pushes self-consumption from 50% to roughly 70%, saving an extra £200/year on a 4kW system. The battery pays for itself in 7-8 years, on top of the panels. Combined payback: 8-10 years. After that, you have both free daytime electricity and a full battery for the evening. Run your own numbers in the solar savings calculator.
Is solar worth it without SEG? The import-only maths
Some people argue SEG rates are too low to matter. Fair. Let us strip SEG out entirely and look at import avoidance alone: every solar kWh you use yourself is a kWh you do not buy from the grid at 26.11p.
| System | Self-Consumed (50%) | Import Saving/Year | Payback (no SEG) |
|---|---|---|---|
| 2kW | 950 kWh | £248 | 14-18 years |
| 3kW | 1,425 kWh | £372 | 12-15 years |
| 4kW | 1,900 kWh | £496 | 11-14 years |
| 5kW | 2,375 kWh | £620 | 11-14 years |
| 6kW | 2,850 kWh | £744 | 10-13 years |
Even without a single penny of SEG income, a 4kW system pays for itself in 11-14 years from import savings alone. And that is assuming you only use half of what you generate. If you work from home or shift your washing machine, dishwasher, and immersion heater to run during the day, you can push that to 60-70% and cut the payback to 8-10 years, SEG or no SEG.
The real money in solar has always been not buying electricity, not selling it. SEG is the bonus.
What affects solar payback? The four numbers that matter
1. Your electricity rate
This is the biggest lever. At 26.11p/kWh every solar kWh you use yourself is worth 26.11p. At 17p/kWh (2021 prices) that same kWh was worth 17p. The price cap has effectively added £173/year to the value of a 4kW system without you lifting a finger. If the cap rises again in October, your solar gets more valuable.
2. Your SEG export rate
Ecotricity pays 16p/kWh if you are their customer. Octopus pays 12p. British Gas and EDF pay 15p. Non-customer rates drop to 3-12p. The difference between 15p and 4p on 1,900kWh of exports is £209/year. Pick your export tariff the same way you would pick a savings account: look for the highest rate.
3. Your self-consumption ratio
How much of your solar generation you use yourself, versus export to the grid. 50% is typical for a household where people are in and out during the day. Work-from-home households hit 60-70%. Retired households with someone home all day can hit 80%. Every 10% you push from export to self-consumption on a 4kW system is worth an extra £49/year at 26.11p/kWh.
4. Your installation cost
Get three quotes. Seriously. The spread on a 4kW system is £5,500-£7,000. That £1,500 difference is two years of payback. Panels, inverters, and mounting systems are commodity products. The installer's labour rate and margin is where quotes diverge. If you can get scaffolding done separately (mates rates, or you are already having roof work done), you can knock £600-£800 off.
Solar vs grid: the difference over 25 years
Solar panels degrade about 0.5% per year. Inverters last 10-15 years and need one replacement. Electricity prices rise, on average, about 3% a year (the 10-year UK average; they have risen faster since 2021). Here is the rough comparison for a 4kW system, assuming mid-range pricing:
| Stay on Grid | Install 4kW Solar | |
|---|---|---|
| Upfront cost | £0 | £6,500 |
| Inverter replacement (year 12) | - | £800 |
| Electricity costs (25 years) | ~£32,000 | ~£15,600 |
| SEG income (25 years) | - | +£5,700 |
| Net position after 25 years | -£32,000 | -£9,200 |
| Saving over grid-only | - | ~£22,800 |
Roughly twenty-three thousand pounds, in today's money. That is the gap between putting panels on your roof and doing nothing for 25 years. Every time the price cap goes up, that gap gets wider.
The arguments against solar, and why most of them are out of date
"Solar takes 15 years to pay back." This was written when electricity was 14p/kWh and SEG was 3p. The world moved on. At 26.11p/kWh and 12-16p SEG, a 4kW system pays back in 7-9 years. That is a 10-13% tax-free annual return. Find an ISA paying that.
"The SEG rate is too low to matter." The SEG is supplementary, not the main event. Import avoidance is worth 26.11p/kWh. On a 4kW system with 50% self-consumption, import savings alone are £496/year. SEG adds £228-£314 on top. Even at 4p/kWh from the worst SEG tariff, you still clear £572/year total, paying back in 11 years. The SEG is a nice-to-have, not a must-have.
"Panels degrade and break." They degrade 0.5% a year. After 25 years they still produce 87% of their original output. Most Tier 1 panels come with a 25-year performance warranty and a 10-12 year product warranty. Inverters are the component that fails, not panels, and a replacement costs £600-£1,000 in year 12-ish. Budget for it and move on.
The real question: can you use enough of it yourself?
The single biggest variable in solar payback is not panel efficiency, inverter brand, or roof angle. It is how much of the generation you use yourself.
If you are out of the house from 8am to 6pm every weekday, nothing on timers, no EV to charge, no immersion heater on a diverter - your self-consumption will be low (maybe 30-40%) and your payback will be longer (10-14 years). Still worth it over 25 years, but slower.
If you work from home, run the washing machine and dishwasher during the day, have an EV you charge from solar, and put the immersion heater on a Solar iBoost or similar diverter - your self-consumption can hit 70% and your payback drops to 6-8 years.
The difference between those two scenarios on a 4kW system is about £200/year and 4-6 years of additional payback. Before you spend a penny on panels, think about whether you can shift your electricity use into daylight hours. It is the single most effective thing you can do to make solar worth it.
What about the 0% VAT deadline?
0% VAT on solar panels, batteries, inverters, and installation labour runs until 31 March 2027. On a £7,000 installation, that saves you £1,167 compared to paying 20% VAT. After that date, unless the government extends it (they might, they might not), the cost of solar jumps by a fifth overnight.
If you are on the fence, the deadline is real. Between now and March 2027, solar is literally 20% cheaper than it will be afterwards. Combined with high electricity prices and decent SEG rates, it is the strongest buying window the UK has seen since the Feed-in Tariff closed in 2019.
Run your own numbers
Every roof is different. The table at the top of this page uses UK averages. If your roof faces east-west, or you have shading from a neighbour's extension, or you use much more or less electricity than average, your numbers will differ.
Use our solar savings calculator to plug in your own postcode, roof direction, system size, and electricity usage. It calculates generation from real UK irradiance data, subtracts your consumption pattern, and gives you a personalised payback estimate. Takes about 30 seconds.
If you want to understand the costs before you get quotes, our solar panel costs guide breaks down what a fair quote looks like for every property size from 1-bed flat to 4+ bed detached, including regional variations. And if you want to understand what grants and schemes can bring the cost down further, the UK solar grants guide covers ECO4, the Warm Homes Plan, and 0% VAT.
Rather have it installed?
Tell us about your roof and timeline and we will pass it to local installers who can quote for the job. We do not install anything ourselves, and your details go to installers for that purpose only. See our privacy policy for the details.
Get quotes from local installers →Frequently asked questions
Are solar panels worth it in the UK in 2026?
Yes, and the maths is stronger than it has been in years. With electricity at 26.11p/kWh, 0% VAT on solar until March 2027, and SEG export payments at 12-16p/kWh, a typical 4kW system saves £700-£800 per year and pays for itself in 6-9 years. Over 25 years that is roughly £18,000-£23,000 in net savings compared to staying on the grid.
How much do solar panels save per year in 2026?
A 4kWp system on a south-facing UK roof generates roughly 3,800kWh per year. With 50% self-consumption you use 1,900kWh yourself (saving £496 at 26.11p/kWh) and export 1,900kWh (earning £228-£314 at 12-16p/kWh SEG). Total annual saving: £724-£810. A 2kW system saves roughly £360-£410/year. A 6kW system saves roughly £1,090-£1,230/year. The exact figure depends on your roof direction, shading, and how much you use during daylight hours.
What is the payback period for solar panels in the UK?
At current electricity prices (26.11p/kWh) and typical installation costs, payback is 6-10 years depending on system size. A 4kW system costing £6,000-£7,000 and saving £724-£810/year pays back in 7.5-9.5 years. Larger systems (5-6kW) achieve slightly faster payback at 6-8 years because the cost per watt is lower. With a battery the payback extends but self-consumption rises, adding resilience. After payback, you get 15-20+ years of effectively free electricity.
Is solar still worth it without SEG payments?
Yes, even without SEG. A 4kW system with 50% self-consumption saves £496/year just from avoided imports at 26.11p/kWh, paying back in 11-14 years. Self-consumption is where the real money is: every kWh you use yourself is worth 26.11p. SEG is the bonus on top. If you can shift heavy loads (washing machine, dishwasher, EV charging) to daylight hours, you push self-consumption higher and payback gets even faster.
Does 0% VAT on solar panels still apply in 2026?
Yes. The 0% VAT rate on solar panels, batteries, inverters, and installation labour runs until 31 March 2027. This saves 20% on the total cost. On a £7,000 installation that is £1,167 in your pocket. After March 2027, standard 20% VAT returns. If you are thinking about solar, the window between now and then is the cheapest it will be.
How long do solar panels last?
Good quality solar panels last 25-30 years before output drops below 80% of the original rating. Annual degradation is about 0.5%. Inverters typically last 10-15 years and need one replacement during the panel lifetime, costing £600-£1,000. Most manufacturers offer a 25-year performance warranty and a 10-12 year product warranty. After the payback period (6-9 years), you have 15-20 years of near-zero-cost electricity generation.