Is solar worth it in 2026?

For most owner-occupied homes with a decent south-facing roof, yes. A typical 5 kW system costs around £7,500–£10,000 fitted in the UK, saves roughly £800–£900 in year one, and pays itself back in eight to ten years. After that it runs at near-zero cost for another fifteen or more. The answer changes sharply depending on five things you can check today, so read those before trusting a headline number.

The five things that decide it

What you pay for the system. In 2026, fitted prices for a residential system run near £1,500–£2,000 per kW in the UK (Heatable, 2026; Checkatrade, 2026), €1,100–€1,800 per kW across residential Europe (SurgePV, 2026), and US$2.50–$3.50 per watt before state incentives in the United States (EnergySage, 2026). A 5 kW system therefore costs a UK household roughly £7,500–£10,000 fitted. Quotes for identical kit vary by thousands, so the price you negotiate moves your payback by years.

Your tariff. Every kilowatt-hour your panels feed straight into your home saves you the full retail rate. In the UK that runs around 24–28p depending on the quarter (Ofgem Q2 2026; Ofgem Q3 2026); in Germany around €0.37/kWh (BDEW, 2026). A high daytime retail rate makes solar pay fast. A cheap flat tariff stretches the wait.

Your sun. Your latitude, your roof's pitch, and which way it faces all set how much you generate. A south-facing roof in Seville produces close to double what the same panels make on a north-east slope in Aberdeen. We pull this number from PVGIS and NASA climate records rather than guessing, because a 20 per cent swing in yield is a 20 per cent swing in your savings.

Export rules. You will not use everything you generate. The surplus flows to the grid, and what you get for it varies. The UK's Smart Export Guarantee pays anywhere from 4p to over 20p per kWh depending on your supplier, with most flat-rate tariffs around 12–15p (Which?, 2026; Heatable, 2026). Net metering in parts of the US still credits you near the full retail rate in several states (Florida, New York, and Massachusetts all retain near-retail net metering in 2026 (SEIA, 2026)), though California's NEM 3.0 now pays avoided-cost rates well below retail. The Netherlands ends its 1-for-1 net metering scheme on 1 January 2027. Australia's feed-in tariffs have fallen to a few cents in most states. Read your country's rule before you size the system.

Incentives. In the UK, residential installations attract 0% VAT until 31 March 2027, after which the rate reverts to 5% (HMRC, 2026). The US federal 30% residential solar tax credit (§25D) expired on 31 December 2025 under the One Big Beautiful Bill Act (Enphase, 2026; SEIA, 2026), so homeowners buying a system outright in 2026 cannot claim it. Leases and PPAs may still access the §48E commercial credit through 2027. Several EU states offer grants or tax deductions. See our European incentives guide for country-by-country detail.

How the numbers compare across markets

Market	Typical installed cost	Retail rate (approx.)	Key 2026 incentive
UK	£1,500–£2,000/kWp	24–28p/kWh	0% VAT to 31 Mar 2027
Germany	€1,100–€1,500/kWp	~€0.37/kWh	0% VAT (open-ended)
Netherlands	€1,200–€1,500/kWp	~€0.27/kWh	0% VAT; net metering ends Jan 2027
United States	$2.50–$3.50/W	~$0.18/kWh (national avg)	No federal residential credit in 2026; state credits vary
Australia	A$0.88–$1.50/W (post-STC)	~A$0.33/kWh	STC rebate (~30% upfront discount)

Sources: Heatable, SurgePV, EnergySage, BDEW, Ofgem. Australia post-STC range from Solar Choice Price Index, Jun 2026. All figures 2026.

A worked payback: UK Midlands, 5 kW system

Take a UK home in the Midlands with a south-facing roof and modest shading.

System: 5 kW, fitted price £7,500 (mid-market quote)
Annual generation: ~4,500 kWh (PVGIS estimate for that latitude and roof pitch)
Self-consumption: 45% = 2,025 kWh used at home directly
Import tariff avoided: 28p/kWh (Ofgem cap, Jan–Mar 2026, Ofgem; modelled flat for simplicity, see note below)
Export: 2,475 kWh at a 10p SEG rate (conservative flat-rate tariff; typical rates now run 12–15p)

Year-one saving: 2,025 × £0.28 = £567 (avoided import) + 2,475 × £0.10 = £248 (export income) = £815/year.

Divide the £7,500 cost by £815 and you get a simple payback of 9.2 years. Most sites stop there. Three things push further in your favour, though.

First, electricity prices rise. If your tariff climbs 4 per cent a year, the savings grow with it, and your real payback lands closer to nine years. Second, the panels keep working long after they are paid off. With a 25-year warranty and roughly 0.5 per cent annual degradation, this system delivers around £20,000 of undiscounted lifetime savings at flat prices against its £7,500 cost (more if tariffs rise). Third, the cash you spent has a return: over 25 years this case shows an internal rate of return near 9 per cent, tax-free (UK residential solar IRR typically falls in the 8–13 per cent range depending on location, tariff, and price growth (SurgePV, 2026; Spirit Energy, 2026)), which beats most savings accounts available today.

Note on the unit rate: the 28p figure is the Ofgem cap for January–March 2026. It fell to 24.67p in Q2 and rose to 26.11p in Q3 2026 (Ofgem). The worked example uses 28p as a round reference; our calculator uses the current quarter's cap for your region.

Run the same panels on a north-east roof in Scotland and generation drops to around 3,000 kWh (south-facing Aberdeen yields roughly 860–890 kWh/kWp per year per PVGIS; a north-east orientation at typical pitch reduces this by around 30–40%, giving an indicative 2,600–3,200 kWh for a 5 kW system), payback stretches past thirteen years, and the answer for you might be no. The hardware is identical; the economics are not.

Where a battery changes the sum

If your export rate is poor, a battery lets you store self-generated power and use it at peak, lifting self-consumption from 45 per cent toward 70 or 80 per cent. That extra self-use is worth the full retail rate instead of the export rate. The trouble is cost: a 5 kWh battery runs £2,500–£6,000 fitted in the UK depending on whether it is added alongside a new solar installation or retrofitted to an existing one (Heatable, 2026; Checkatrade, 2026), and on its own it often adds three to five years to payback. The case for storage rests on your export rate, your peak tariff, and whether you value backup during outages. See when a solar battery pays off for a full model.

What you can do that the market cannot

Get three quotes. Installers price identical kit differently, and the spread often runs into thousands.
Size for your usage, not your roof. A system you mostly self-consume beats a giant array dumping cheap exports to the grid. See how to size a solar system.
Shift load into daylight. Run the dishwasher, the immersion heater, and the EV charger while the sun is up and you convert export pennies into retail-rate savings. See charging your EV with solar.
Check your roof's age. If it needs replacing within ten years, do that first. Pulling panels off and back on is expensive.

Getting multiple quotes and load-shifting both cost nothing and can knock a year or two off your wait.

The honest verdict on solar in 2026

Solar pays for the household that owns its home, stays put for a decade, gets a fair price, and uses a good share of what it makes. It pays slower, and sometimes not at all, for a north-facing roof in a cloudy region with a rock-bottom export rate and a cheap flat tariff. Both homes tend to get sold the same enthusiastic "yes" by sites that want your contact details before they show you a number.

We do it the other way round. We run the real economics on free, resale-permitted government data from PVGIS, NASA, and NREL, and we show you the payback, the NPV, and the IRR for your roof and your tariff before you give us anything. For a deeper look at the calculations, see how we model payback, NPV, and IRR.

Frequently asked questions

Is solar worth it in the UK in 2026?

For most owner-occupied homes with a south-facing or south-west-facing roof, yes. A 5 kW system typically costs £7,500–£10,000 fitted, saves around £800–£900 per year at current Ofgem-capped tariffs, and pays back in eight to ten years. After that it runs largely free. North-facing or heavily shaded roofs have longer paybacks and need case-by-case calculation.

What is the payback period for solar panels in 2026?

For a typical UK home in the Midlands with a south-facing roof, simple payback runs seven to ten years. With a 4 per cent annual rise in electricity prices, the real payback is closer to nine years. Systems in less sunny or less favourably oriented locations can take twelve to fifteen years, so location matters as much as the hardware.

Is there still a solar tax credit in the US in 2026?

No federal residential solar tax credit exists in 2026 for homeowners who buy a system outright. The 30% §25D credit expired on 31 December 2025 under the One Big Beautiful Bill Act. Third-party-owned systems (leases and PPAs) may still access §48E through 2027. Several states offer their own credits. New York's 25% credit (capped at $5,000) remains in place.

Does 0% VAT on solar panels still apply in 2026?

Yes. UK residential installations attract 0% VAT on panels, inverters, batteries, and labour until 31 March 2027, after which the rate reverts to 5%. Germany and the Netherlands also apply 0% VAT on residential solar under their own schemes. The saving is already embedded in the fitted prices installers quote.

How much does a 5 kW solar system save per year in the UK?

At current UK tariffs, a 5 kW system on a south-facing Midlands roof generates roughly 4,500 kWh per year. Using 45 per cent at home saves around £567 in avoided import costs; exporting the rest at a 10p SEG rate earns around £248, bringing the total to roughly £815 per year in year one. Self-consumption and your export tariff are the two biggest levers you can move.

Estimate your roof →

Estimate only, not a quote. Figures use local climate data and average tariffs; your installer's quote will be exact.