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As a general rule a PV system (see our solar products page) will pay for itself in approximately 8 to 10 years. The FIT, or Feed in Tariff, which guarantees a price for the electricity you produce, lasts for 25 years. Not only that, but it is linked to the Retail Price Index, unlike all…

An example of a domestic grid connected PV system

Size of system 2.5kWp (roughly 18m² of roof space), retro fit, South facing no shading and located in the Midlands (based on irradiation of 850 kWh/kWp per annum)

Cost of system including all system components and installation£10,500
Electricity generated per year2,266kWh
FIT income from generated electricity£981 per year
Export tariff payment (supplying electricity to the grid)£35 per year
Electricity bill saving (assuming 50% home use, 14p/kWh)£137 per year
Income£1153 per year
Lifetime (25 years) income£28,825
Annual Carbon benefit1.2t Co2 per year

The payment for the FIT is RPI linked and the income from the exported electricity along with the savings will in effect this lifetime income. The detail of what the true return is on the initial investment needs to take into account other issues such as the cost of the money used to buy the system. However it can be seen from this example that the system pays for itself in just over 10 years. The return on investment in the first year is just over 9.9%. It should also be noted that due to the benefits the system will increase your property value.