Solar, battery or heat pump: how long to pay back?
How long until it pays for itself? Solar panels, a battery or a heat pump cost a lot up front and save a little each year. See the yearly saving, the payback and what you'd gain over 20 years.
Your answer
Choose what you're fitting and enter the cost to see how long it takes to pay back.
About this calculator
For homeowners weighing up solar panels, a home battery or an air source heat pump. It's a rough guide to the money, not a survey of your home.
What happens to your answers
We don’t keep them. Your answers go to our server to do the sums and aren’t stored or logged. If you copy a link to your answers, they’re in the link itself, so only share it with people you trust.
How it’s worked out
Solar: we multiply the system size by what each kWp makes in a year. What you use at home saves the electricity price; what you export earns the export rate. A battery raises the share you use. A battery on its own saves by charging overnight at a cheap rate.
Heat pump: we take the heat your boiler makes from your gas (assuming it's 85% efficient), divide by the heat pump's efficiency for the electricity it needs, and compare the bills. The £7,500 Boiler Upgrade Scheme grant comes off the cost. If it costs more to run than gas, it never pays back.
Payback is the cost after any grant ÷ the first year's saving. The 20-year gain adds each year's saving with prices rising, less the cost. We leave out standing charges, which stay the same unless you give up gas altogether. Installing these in a home has no VAT until 31 March 2027, then 5%.
Worked example
On these figures, your solar panels would pay for themselves in about 16.5 years, saving about £424 a year.
solar panels · 4 kWp · 850 kWh per kWp · export 5p a kWh · electricity 26.32p a kWh · prices +3% a year · standing charges left out
| 4 kWp × 850 kWh per kWp = electricity made a year | 3,400 kWh |
|---|---|
| 35% used at home: 1,190 kWh at 26.32p a kWh you no longer buy | £313 |
| 2,210 kWh sold to your supplier at 5p a kWh (Smart Export Guarantee) | + £111 |
| Yearly saving | £424 |
| Cost of installation | £7,000 |
| Net cost £7,000 ÷ yearly saving £424 = simple payback | 16.5 years |
| Saved over 20 years with prices rising 3% a year, less the net cost | £4,385 |
Yearly saving at today's prices; simple payback = net cost ÷ yearly saving. The 20-year gain adds each year's saving with prices rising at your rate, less the net cost. Default prices are Ofgem's price cap averages for 1 October to 31 December 2026.
Questions people ask
Is there VAT on solar panels or a heat pump?
Not when they're installed in a home before 1 April 2027: the installation is zero-rated, batteries included. From then it's 5%. A business pays the normal rate but can usually reclaim it if it's VAT-registered.
Can my business claim tax relief on solar panels?
Yes, on panels for business premises. They're a special rate asset for capital allowances, but the Annual Investment Allowance usually lets the business deduct the full cost in the year it buys them. Talk to us about how this fits your accounts.
Can I get the heat pump grant in Scotland or Northern Ireland?
No. The Boiler Upgrade Scheme is for England and Wales. Scotland has its own support, and Northern Ireland's scheme has closed. Choose No for the grant to see the payback without it.
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