Do solar panels pay off?

Production starts from PVGIS, which models a 1 kWp system at this city's exact coordinates and returns a figure for each month. That is scaled by the size of the array you set. The PVGIS figure already includes a 14% system loss, and it is queried at your own slope and direction whenever you supply them.

first-year total — produced 3,403 kWh

Under this arrangement the surplus is lost. With no payment for exports, electricity you neither use nor sell is either turned away by the inverter or handed to the grid for nothing. It earns no money and it saves no carbon, so the model counts it as neither a saving nor a carbon benefit. It also makes every kilowatt-hour you do use more expensive, because the same system cost is now spread over less useful energy.

produced 3,403 kWh — useful 1,141 kWh, wasted 2,262 kWh

If this figure is large, a smaller array, a battery, or an export arrangement is worth more than adding panels. For this household the numbers point to about 3 kWp.

The consumption bars are your annual household use spread across the year, which is why the shape is flatter than production. The gap between the two is the whole problem: summer surplus you export for less than it saves you, winter shortfall you still buy at the full rate. How much of your own output you actually use is the single largest source of error here, and it is set by the simultaneity factor rather than measured. Switch on Work it out hour by hour to replace the factor with a simulation.

Every panel you add produces electricity at the same cost, but the house can only absorb so much of it. Once production covers the demand that happens at the same time of day, the rest has to be exported, and exported electricity is worth a fraction of the electricity you avoid buying. With no export arrangement it is worth nothing at all. So the value of each extra panel falls even though its cost does not, and past some point another panel takes money away rather than adding it.

best in present value — 3 kWp at €3,571, against your 3 kWp at €3,407

That is found by evaluating every size from 1 to 20 kWp on your own prices, tariff, export arrangement and battery.

What it maximises needs saying plainly, because the site gives you two figures that measure the same system differently. Net gain over 25 years simply adds the money up: a euro saved in 2051 counts the same as a euro spent today. Net present value does not. It treats money you get back later as worth less than money in your hand now, because money in your hand can be doing something else in the meantime, and because prices rise. So it shrinks each future year before adding it, and how much it shrinks is the rate under Show the awkward assumptions, currently 3.0%.

The recommendation uses net present value, because paying out today for a return spread over 25 years is exactly the kind of decision that measure exists for. Note the word has nothing to do with a discount in the shop sense; nothing is being marked down.

The two measures disagree here, and that is real. The plain total favours a larger array, because a bigger system does return more euros in the end; it just returns them later, and spends more today to do it. Neither number is wrong. If you care about the total money eventually in your pocket, use the plain total. If you care whether this is a good use of the money right now, use present value.

best in present value 3 kWp — best as a plain 25 year total 3 kWp

If you would rather ignore the timing of the money, set the rate to zero under Show the awkward assumptions and the two will agree.

A battery raises the answer, because it lets the house use production that would otherwise leave. Its own capacity has a best size for the same reason, though this is not worked out for you: each extra kWh catches less surplus than the one before, so a smaller battery often pays better, and it is worth trying one.

The line starts at what the system costs you on day one and falls by each year's benefit: the electricity you no longer buy, plus whatever the exported surplus earns. It reaches zero in the year the system has paid for itself. A battery replacement adds its cost back on, so with a battery the line can return above zero; the payback given is the last time it reaches zero, after which it stays there.

day one €3,600 outstanding → after year 1 €3,263

Later years are not simply the first year repeated, because several things are moving underneath the line.

The electricity price is assumed to rise. That matters more than it sounds: it is what the system saves you, so a higher rate shortens the payback and a rate of zero lengthens it. The rate is a setting, under Show the awkward assumptions, and nobody knows the real figure for the next 25 years.

electricity assumed to rise 2.0% a year — €0.327 today becomes about €0.526 in year 25

Panel output degrades. Output is taken to fall 0.5% a year, so year 25 produces about 89% of year one. This one is fixed in the model rather than adjustable.

Upkeep is charged every year. The model deducts 1% of what the system cost, covering cleaning, inspection and the odd repair. It is subtracted from every year's saving and it is included in the cost per kWh shown below.

upkeep — €36 a year, which is €900 over 25 years

No replacements are charged. Neither an inverter nor a battery is replaced on the settings above. Real inverters usually need replacing once in a 25-year life, and batteries are commonly warranted for about 10 years, so treat this payback as the optimistic end of the range.