Rooftop solar panels are paying for themselves in just over six years, leaving a likely remaining lifespan of 19 years when the electricity generated is essentially free, according to analysis commissioned by the Energy and Climate Intelligence Unit (ECIU) and published on 13 December 20221. The same analysis puts the cost of solar farms at £54 per MWh, against a predicted 2025 price for gas power stations of £85 per MWh1.
At grid scale, the ECIU figures show solar plus battery storage at £82/MWh, which it says is already cheaper than gas prices even before Russia's invasion of Ukraine, falling to under £66/MWh for solar plus storage in 20261. For homes, the analysis finds payback on rooftop solar combined with a domestic battery reducing from nine to seven years, with the batteries reducing bills and, as with some electric cars, providing households with electricity even during power cuts1. The savings and payback periods figures sit alongside the report's finding that UK consumers are driving a surge in demand for solar based solely on seeking cheap, secure power, with 8,000 installations a month1.
The report also covers European deployment, saying summer 2022 saw solar generate a record 12% of the EU's power, up from 9% in summer 2021, breaking records in 18 member states and generating nearly a quarter of the Netherlands' power and nearly a fifth of Germany's, displacing €29 billion of gas for power generation1. It cites Ember analysis that raising the EU's 2030 renewable energy target to 45%, as required by the REPowerEU plan, from the 40% previously agreed in its Green Deal would halve EU gas imports and avoid a cumulative €200 billion in gas costs between 2025 and 20301.
Gareth Redmond-King, International Analyst at ECIU, said:
"The story of solar in Britain is one part of a much bigger story of global momentum behind the net zero transition. Putin's war against Ukraine has turbo-charged Europe's efforts to get off Russian gas and led to record levels of solar generation in some countries this summer. And the two biggest economies in the world are spending big on cheaper, cleaner renewables. Markets are driving this boom, and consumers can be the big winners."
Matt Williams, Land Use Analyst at ECIU, said it appeared the government was rowing back on restrictions for large-scale solar farms, which he described as good news for consumers and for the grid, and said on-farm renewables have a huge potential to lower bills1.
| Measure | Cost or payback |
|---|---|
| Solar farms | £54/MWh |
| Gas power stations, predicted 2025 | £85/MWh |
| Gas, day ahead prices since the crisis | in excess of £200/MWh |
| Solar plus battery, grid scale | £82/MWh |
| Solar plus storage, 2026 | under £66/MWh |
| Rooftop solar payback | just over six years |
| Rooftop solar plus domestic battery payback | nine to seven years |
Why it matters for households
The payback figure is the part that bears directly on a home's energy independence: the analysis treats the electricity generated after the payback period as essentially free for a likely remaining 19 years of panel life1. Adding a battery changes the arithmetic in two ways the report sets out, shortening payback from nine to seven years and allowing a household to draw on stored electricity during power cuts1. The comparison between solar and gas at grid scale matters less directly, but it is the backdrop to household bills: the report argues that curbing solar deployment on poorer quality farmland would have led to household energy bills being even higher1. How a battery is added to an existing array, and whether a battery is worth fitting at all, are separate questions the report does not address; the battery storage and solar without a battery guides cover those trade-offs.
What happens next
The report points to Bloomberg revising its global estimates for new solar build this decade up by 39%, and to International Energy Agency forecasts that solar power capacity worldwide will outstrip gas in 2026 and coal in 2027 to become the biggest single source of electricity generation1. It also notes the EU is in the process of increasing its renewable ambition, with a potential rise in the 2030 target to 45%1. No UK policy decision on large-scale solar farms is dated in the material, and no date is given for when the government's position will be set out.