How we calculate your savings
Your annual savings come from two streams:
- Self-consumption savings — electricity your panels produce that you use directly, replacing power you'd otherwise buy from the grid at the import rate.
- SEG export income — surplus electricity you export to the grid, paid at the Smart Export Guarantee rate.
The formula
annual generation (kWh) = system size (kW) × regional sun hours × 0.7
The 0.7 factor accounts for real-world losses — inverter efficiency, shading, temperature and panel degradation.
self-consumed = generation × self-consumption rate (45% without a battery, 75% with one), capped at your annual usage (estimated from your monthly bill — you can't self-consume more than you use)
self-use savings = self-consumed × import rate (26.11p/kWh, Ofgem cap Q3 2026)
SEG income = (generation − self-consumed) × SEG rate (13p/kWh typical)
payback = system cost ÷ annual savings
25-year profit = Σ annual savings (with 0.5% degradation + 3% rate inflation) − system cost
Where the data comes from
- Sun hours — regional averages from NREL PVWatts / Solar Energy UK, 2026.
- Electricity rate — Ofgem default-tariff price cap, 26.11p/kWh (1 Jul–30 Sep 2026, England/Scotland/Wales avg, incl. 5% VAT). Reviewed quarterly.
- SEG rate — typical 13p/kWh. Supplier-set, ranges 3–15p (e.g. Octopus Outgoing, E.ON Next Export, OVO). Quoted as supplier-dependent.
- System cost — ~£1,600/kW installed. 0% VAT on residential solar & storage in Great Britain until 31 March 2027 (Northern Ireland also applies 0% from 1 May 2023 under the Windsor Framework, but rules may differ — confirm with your installer).
- Battery — ~£4,000 for a 5 kWh LiFePO4 system, raises self-consumption to ~75%.
Is solar worth it in the UK?
For most homes, yes. A typical 4 kWp system in southern England generates 3,400–4,400 kWh per year, pays back in 8–12 years, and delivers £15,000–£18,000 of total savings over 25 years. With 0% VAT on installations (until 31 March 2027) and SEG tariffs paying for your surplus, the economics are stronger than at any point in the past decade.
It's most valuable if you use electricity during daylight hours (working from home, EV charging, heat pump) or add a battery to shift daytime generation into the evening.