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Calculating the ROI of solar panels and batteries over 10 years in the UK

By Volt Renewables

We hope you find this article helpful. Remember that examples provided are for illustration purposes only and may not reflect your unique circumstances.

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Snapshot

Curious about the return on investment (ROI) of solar panels and batteries for your UK home? This article breaks down the numbers, including installation costs, annual savings, and payback periods, to help you understand how much you can save over a decade.

Why understanding ROI matters

Investing in solar panels and battery storage for your home is a big decision. While the upfront costs can seem high, understanding the financial benefits over time can make the choice much clearer. For UK homeowners, solar energy offers substantial savings on energy bills, protection against rising costs, and an impressive return on investment over the years.

But how much can you realistically save, and when will you see a return? Let’s dive into the key factors that determine your solar Return on Investment (ROI), including installation costs, annual savings, and long-term payback periods.

How much do solar panels and batteries cost?

The cost of installing a solar panel system in the UK depends on the system size and whether you include battery storage. For an average home:

A 3kW solar system costs between £4,500 and £6,000.
A 4kW solar system (the most common size) ranges from £5,500 to £7,500.
Adding a battery storage system typically costs between £2,000 and £4,500, depending on capacity.

For a combined system, the average total investment is between £7,000 and £11,000.

While this may seem significant, these costs are offset by savings on energy bills, export earnings, and the long-term benefits of energy independence.

How much can you save annually with solar?

Annual savings depend on several factors, such as your system size, energy consumption, and the use of battery storage. For example:

A 3kW solar system can save around £400 to £500 per year on electricity bills.
A 4kW system typically saves £500 to £700 annually.
Homes with battery storage can increase their savings by 20-30%, reducing reliance on expensive grid energy during peak hours.

Additionally, under the Smart Export Guarantee (SEG), you can earn money by exporting excess electricity back to the grid. Depending on your provider, export rates range between 4p and 15p per kWh, adding another £70 to £150 per year to your savings.

What is the payback period for solar?

The payback period is the time it takes for your energy savings to cover the initial cost of your solar panel and battery system. In the UK, the typical payback periods are:

Without battery storage – around 6-8 years for an average 4kW solar system.
With battery storage – between 8-12 years, depending on battery size and energy usage.

For example, if you invest £7,500 in a 4kW system and save £600 annually, you would recoup your investment in about 7 years. With battery storage, the savings are higher over time, but the upfront cost extends the payback period slightly.

What are the savings over 10 years?

To understand the full ROI, let’s calculate savings over 10 years:

A solar panel system without battery storage can save you between £6,000 and £8,000.
Adding battery storage increases savings to around £9,000 to £11,000 over the same period.

When combined with export earnings and the rising cost of grid electricity, the long-term financial benefits of solar energy become clear. Plus, solar panels typically last 25-30 years, meaning the savings continue well beyond the first decade.

Factors that influence your ROI

Your return on investment depends on several key factors:

Energy usage – homes with higher daytime energy consumption save more since they use more of their solar energy directly.
Battery storage – storing excess energy increases savings by reducing grid reliance at night.
Roof orientation – south-facing roofs generate the most energy, though east and west-facing roofs still perform well.
Energy prices – as grid electricity costs rise, your solar savings increase proportionally.
Export tariffs – higher SEG rates boost earnings from excess energy sent to the grid.

Is solar worth it in the long run?

For UK homeowners, the answer is clear: solar panels and battery storage offer excellent long-term value. Over 10 years, a combined system can save you upwards of £10,000 while providing energy security and independence.

With energy prices continuing to rise, solar panels act as a hedge against unpredictable costs, giving you control over your energy future. Once you pass the payback period, the savings are effectively free for the remaining lifespan of the system.

Take the next step toward solar savings

Switching to solar has never been easier. With transparent pricing, expert installation, and long-term savings, a solar system from Volt Renewables is a smart investment in your home’s future.

Get your personalised quote today – no pressure, just clear, honest pricing tailored to your energy needs.

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