Commercial solar payback period

What payback period actually measures

Simple payback is capital cost divided by annual saving — how many years until the system has paid for itself, before accounting for financing cost, degradation, or the time value of money. It's a useful first filter, not a full financial case.

What moves the number the most

• Self-consumption assumption. A kWh you use yourself is worth roughly your import rate; a kWh you export is usually worth much less. A proposal assuming 80% self-consumption will show a shorter payback than one assuming 50% — check which is realistic for your actual operating hours and load profile.
• Which electricity rate is used. Valuing every generated kWh at your full all-in import rate (including standing charges and network costs that don't scale with consumption) can overstate savings. See our proposal review for how we flag this.
• What's included in the capital cost. A payback calculated on a price that excludes scaffolding, DNO fees or roof repairs will look better than one that includes them — until those costs turn up separately.
• Degradation and maintenance. A payback figure that ignores gradual output decline and ongoing O&M cost is optimistic by construction.

A better question than "what's the payback?"

Ask each installer to show the assumptions behind their number — self-consumption %, which tariff components are included, and whether O&M is netted off. Two proposals with the same headline payback can be built on very different assumptions, and the more conservative one is often the more trustworthy one.

Want a rough first estimate? Try the calculator. Already have proposals quoting a payback period? Get them independently reviewed.