Solar panel calculator
Ask a solar installer about payback and you'll get a number. It's usually a good one.
This works it out independently, including two things installer calculators tend to leave out.
The two numbers that change the answer
The buy-back rate. Power you generate and don't use gets sold back to the grid, and what you're paid for it is a fraction of what you pay to buy power. Buy-back rates vary a lot between retailers, and a payback calculation that assumes you use everything you generate will be optimistic.
Opportunity cost. The money you spend on an install could have been invested instead. A system that "pays for itself in nine years" hasn't really, if that money would have grown meaningfully somewhere else over the same nine years. That's the comparison the calculator makes, and it's the one nobody selling panels is going to volunteer.
What else moves it
When you use power. Solar generates during the day. If the house is empty from 8 until 5, you export most of it at the low buy-back rate rather than using it at the retail rate.
Your retailer's plan. Some have specific solar plans; buy-back rates differ substantially.
A battery, which changes the maths considerably and usually not in favour of payback.
How long you'll stay. Payback periods run to years. If you sell before then, you're relying on it adding to the sale price, which is far less certain than the power bill saving.
I put solar on my own house
In the process of building our house in 2023 we had a decision to make, like many home owners do, of whether to have solar panels installed on our house. We went back and forward quite a bit about whether to do it, and finally made the decision at the last hour to have them installed. During this process I found the available calculators lacking in detail so built my own to help us with our decision from a financial perspective. I am hoping it can help you with your decision too from the point of view from someone who has no skin in the game and no incentive whether you have them installed or not. You can read more about our thought process and decision here.
We are now over two years in and are pleased with the results. They have actually very closely mirrored the results of what the calculator provided before we began the install. Things looking slightly better due to us using a bit more solar than I assumed we would. We are on track to have the solar install paid off by around year 8. You can read the most recent update here.
What it can't tell you
Power prices over the next fifteen years. Nobody knows those, and the payback period depends heavily on them. If power gets more expensive, solar looks better, and vice versa.
It also can't price the reasons that aren't financial. Some people want panels because of what they think about emissions, and that's a perfectly good reason that doesn't need to show up in a payback calculation.
Thinking about it?
I don't sell solar and I don't take referral fees from anyone who does. If you'd like a second opinion on the numbers before you commit, get in touch for a free 30 minute chat.