How to calculate solar panel savings UK

Solar savings formula

Annual bill saving = self-used solar kWh multiplied by your import unit rate. Annual export income = exported solar kWh multiplied by your export rate. Add those two figures to get the annual solar benefit.

Simple payback years = total installed cost divided by annual solar benefit. Keep the bill saving and export income visible rather than hiding them inside one unexplained result.

The common mistake is valuing every kWh of generation at the import unit rate. That only works if you use every kWh at home, which most households won't without the right demand pattern or storage.

Step 1: estimate generation

Start with annual generation in kWh. If you only know the system size, a rough early planning range is 800 to 1,000kWh per kW installed each year. A 4kW system might be modelled around 3,200 to 4,000kWh before roof-specific checks.

PVGIS or an installer design should replace the shortcut once you have roof direction, pitch, shading and location details.

Step 2: split self-use and export

Self-consumption is the share of solar electricity used in the home. Export is the rest. If a system generates 3,600kWh and you use 35% at home, that is 1,260kWh self-used and 2,340kWh exported.

Daytime occupancy, smart appliance scheduling, EV charging and batteries can change that split. So can a strong export tariff, because exporting isn't always a bad outcome.

Step 3: apply current rates

For import value, use your actual electricity tariff if you know it. The calculator currently uses 26.1p/kWh as a rounded default because Ofgem's Direct Debit average for 1 July to 30 September 2026 is 26.11p/kWh.

For export value, use the SEG or export tariff you can actually access. Ofgem says SEG licensees choose the tariff rate and contract terms, but the rate must be above zero.

Step 4: calculate annual benefit and payback

Take 3,600kWh of annual generation, 35% self-consumption, a 26.1p/kWh import rate and a 15p/kWh export rate. Self-used solar is worth about £329 a year. Exported solar is worth about £351 a year. The annual benefit is about £680.

If the installed cost is £7,000, simple payback is about 10.3 years. Change the export tariff, generation estimate or self-consumption figure and the answer changes quickly.

Check the result before relying on it

Run a lower-generation case and use only an export tariff you can actually access. If the quote includes a battery, calculate solar-only first, then compare the battery's extra cost with the extra annual benefit it creates.

Simple payback is a useful comparison, not a full investment forecast. It does not automatically include finance, maintenance, inverter replacement, panel degradation or future tariff changes.

Use the method with real numbers