- Payback = kit cost ÷ yearly savings. Typical results range from 3 to 10+ years.
- Electricity price is the biggest lever, followed by orientation, shade and self-consumption.
- Panels last 25+ years and microinverters are often warrantied for 10-15, so a 6-8 year payback still leaves years of profit.
- It is not worth it on a shaded, north-facing balcony or with very cheap electricity.
In this article
The basic math
Payback (years) = total kit cost ÷ yearly savings
Yearly savings = kWh produced × share you use × price per kWh (plus any export payment, usually zero)
Three example households
| Renter, Maine | Homeowner, Utah | Flat, London | |
|---|---|---|---|
| Kit | 800 W vertical, south | 800 W tilted, south, yard | 800 W vertical, south-west |
| Cost | $900 | $850 | £750 |
| Output | ~690 kWh | ~1,250 kWh | ~560 kWh |
| Self-use | 75% | 65% | 80% |
| Price | $0.30 | $0.13 | £0.26 |
| Savings/year | ~$155 | ~$105 | ~£116 |
| Payback | ~5.8 years | ~8 years | ~6.5 years |
Note how the sunny Utah kit, producing almost twice as much, pays back more slowly than the Maine kit because electricity is cheap.
What makes it worth it
- Electricity above ~$0.20/kWh (or £0.20).
- South, south-east or south-west facing space with 5+ hours of direct sun.
- Someone home during the day, or big daytime loads like a fridge-freezer, home office or AC.
- A certified kit bought at a reasonable price per watt.
When to skip it
- North-facing or heavily shaded space (more than half the day).
- Electricity under ~$0.12/kWh and no plans to stay.
- Local law does not allow it and you do not want a grey-area setup.
Beyond payback
Many buyers also value lower exposure to price increases, a smaller carbon footprint, and learning how solar works before a bigger investment. Those are real benefits, but make the decision with honest numbers first. Run them in the calculator.
Lifetime view
Payback is only half the story. A kit that pays back in six years and keeps working for 20 years (with perhaps one inverter replacement) returns roughly three times its cost over its life at today’s prices. A kit that pays back in 12 years barely breaks even once you account for an inverter replacement.
| Payback | Verdict |
|---|---|
| Under 5 years | Excellent |
| 5-8 years | Good |
| 8-12 years | Marginal; improve placement or wait for lower prices |
| Over 12 years | Poor, unless you value other benefits |
Your five-minute decision
- Find your real price per kWh from a recent bill.
- Check your space: which direction, how many hours of direct sun.
- Enter both in the calculator with a realistic kit price.
- If payback is under 8 years and plug-in solar is legal where you live, it is likely worth it.
- If payback is over 10 years, improve placement (tilt, less shade) or wait for cheaper kits.
Non-financial reasons people buy
- Protection against future price increases.
- Lower carbon emissions: each kWh of solar displaces grid electricity, which in most regions still includes fossil generation.
- Learning how their home uses energy, which often leads to other savings.
- A first step before a larger rooftop system.
Frequently asked questions
Does a battery shorten payback?
Usually not; it lengthens it unless you have high evening prices and large midday surplus. Battery math.
What if I move in two years?
Take the kit with you. Payback continues at the new home if plug-in solar is legal and the site is good.
Should I wait for prices to fall?
Kit prices have been falling, but waiting a year also means losing a year of savings. If your site is good and the kit is legal where you live, waiting rarely pays.
Sources
- Electricity rates by state (EIA data, June 2026), Choose Energy.
- Electric Power Monthly, Table 5.6.A: average price of electricity by state, U.S. Energy Information Administration.
- Changes to energy price cap between 1 October and 31 December 2026, Ofgem.
- PVWatts Calculator, National Laboratory of the Rockies (formerly NREL).
- Photovoltaic degradation rates: an analytical review (Jordan and Kurtz), NREL / National Laboratory of the Rockies.
Sources checked in September 2026. Laws, prices and product details change; if you spot something out of date, tell us.