Solar panels and batteries: real payback for UK homes

What solar panels cost in 2026

The Energy Saving Trust puts the average home system at around 4.5kWp, costing about £7,600. Industry price guides for 2026 put a 4kW system at roughly £5,200–£8,500 installed, depending on roof access, scaffolding and equipment. Residential solar and batteries currently have 0% VAT.

A 4kW system in the UK typically generates around 3,400–4,200 kWh a year – more in the south, less in the north and Scotland, and less on east/west or shaded roofs.

How solar saves you money

Solar saves money in two ways. Every unit you use yourself avoids buying electricity at around 26.32p/kWh (the October 2026 price cap). Every unit you don't use can be sold to the grid under the Smart Export Guarantee (SEG), typically for around 12p/kWh, with rates ranging from about 3p to 25p depending on supplier and conditions.

Because using your own electricity is worth about twice as much as exporting it, the more you use during the day (or store), the better the payback.

Worked example: solar on its own

Take a 4kW system generating 3,400 kWh a year. Without a battery, a typical home uses around 30–40% directly. At 35%, that's about 1,190 kWh used at home (worth about £313) and 2,210 kWh exported at 12p (about £265) – roughly £580 a year in total.

At an installed cost of £6,600–£8,500, that's a payback of roughly 11–15 years. With a higher export rate, more daytime use or rising electricity prices, it comes down. Panels typically carry 25-year performance warranties, though an inverter replacement during that time is likely.

Do batteries pay back?

A battery lets you store daytime solar for the evening, typically raising self-use to 70–80%. In our example, that would add roughly £170 a year compared with exporting. On that alone, a battery costing £2,800–£6,000 would take a long time to pay back.

The bigger opportunity is pairing a battery with a time-of-use tariff: charging from the grid overnight at well under 10p/kWh and using that electricity at peak times instead of paying 26p or more. Shifting 2,000 kWh a year this way could be worth several hundred pounds. Industry estimates put typical battery payback at around seven to twelve years when this is factored in.

When solar and batteries make most sense

• You have a south, east or west-facing roof with little shading.
• You plan to stay in your home for many years.
• Someone is at home in the day, or you have an EV or heat pump to soak up extra electricity.
• You're willing to switch to a smart export tariff and, with a battery, a time-of-use import tariff.

How long do solar panels take to pay back in the UK?

Typically around 9–15 years for a 4kW system in 2026, depending on cost, location, how much electricity you use yourself and your export rate.

How much can I earn from the Smart Export Guarantee?

SEG rates range from roughly 3p to 25p per kWh in 2026, with around 12p typical for standard fixed export tariffs. A 4kW system might export 1,400–2,200 kWh a year.

Is a solar battery worth it?

On solar savings alone, batteries often take a long time to pay back. Paired with a time-of-use tariff to charge cheaply overnight, typical payback estimates fall to around seven to twelve years.

Is there VAT on solar panels?

Residential solar panels and batteries are currently zero-rated for VAT in Great Britain.