How Solar Panels Save You Money

Every kWh your panels generate that you use directly is a kWh you do NOT buy from the grid. At 24.5p/kWh (Ofgem Q1 2026), each self-consumed kWh saves 24.5p.

A 4kW system generates ~4,000 kWh/year. At 50% self-consumption: 2,000 kWh × 24.5p = £490 saved on bills. At 80% self-consumption (with battery): 3,200 kWh × 24.5p = £784 saved.

This is the PRIMARY way solar saves money — direct bill reduction through self-consumption.

Source: Ofgem Q1 2026.

When your panels produce more than you use, surplus flows to the grid. Under the Smart Export Guarantee, your supplier pays you:

2,000 kWh exported at 4.5p = £90/year (fixed SEG) 800 kWh exported at 4.5p = £36/year (with battery — less surplus)

SEG income is smaller than bill savings but still meaningful. Better tariffs (Octopus Flux: 8-24p) can triple this income.

Source: SEG rate data.

4kW system without battery: £490 (bills) + £90 (SEG) = £580/year 4kW system with battery: £784 (bills) + £36 (SEG) = £820/year 4kW + battery + Octopus Flux: £784 + £300 arbitrage = £1,084/year

Over 25 years: £14,500-£27,100 in total savings.

Source: Financial modelling; Ofgem; Octopus Flux.