Detailed ROI Calculator

What is the real ROI of solar panels?

Solar panel ROI — detailed financial analysis (4kW system, £7,000): SIMPLE PAYBACK: £7,000 ÷ £780/yr = 9.0 years. SIMPLE ROI (25yr): (£19,500 savings - £7,000 cost) ÷ £7,000 = 179%. INTERNAL RATE OF RETURN (IRR): 11.2% (comparable to long-term equity returns, but with near-zero risk). NET PRESENT VALUE at various discount rates: At 3% discount: NPV = £7,800 (strongly positive). At 5%: NPV = £5,200. At 7%: NPV = £3,100. At 10%: NPV = £900. At 12%: NPV = -£400 (only breakeven at 12% discount). SENSITIVITY: If electricity rises 3%/yr: IRR increases to 14.5%. NPV at 5%: £8,600. If electricity falls to 20p: IRR decreases to 8.8%. NPV at 5%: £3,100. COMPARISON: Cash ISA 4.5%: IRR 4.5%. S&S ISA: IRR 7-10% (with volatility). Solar: IRR 8-15% (near-zero risk). Solar delivers equity-like returns with bond-like risk. Sources: Ofgem (ofgem.gov.uk), PVGIS (re.jrc.ec.europa.eu), financial analysis methodology.