2 kW system returns

The following tables show estimated returns for a 2 kW (8-panel) system on a south-facing roof. The returns will vary for different roof directions and slopes as shown on the benefits and payback summary page, where other assumptions and values used for these estimates are also given. Returns will obviously vary with differing levels of sunlight and with the amount of electricity you use during the day when generating from solar.

Savings are shown below for two scenarios with low and high daytime electricity use, which give the ranges shown on the summary page for benefits and payback. The low scenario may apply to a household with no-one at home during week days and the high scenario to a household with someone at home during most week days.

LOW DAYTIME ELECTRICITY USE – Benefits for household using 25% of solar generation and exporting 75% (but with FiT paid at deemed export of 50%).

COSTS
Installation cost (inc VAT) £3,679
Inverter replacement (approx. after 10-15 years) £1,000
ANNUAL BENEFIT*
• Feed-in Tariff (paid for 20 tears) £326
• Electricity bill savings £65
• Total annual income and savings £391
• Annual generation (first year) 1,942 units (kWh)
• Carbon reduction (CO2 equivalent) 1.0 tonnes
PAYBACK period (time for income to cover installation cost) 9.7 years
TOTAL BENEFITS OVER 25 YEARS
• Feed-in Tariff (paid for 20 tears) £6,040
• Electricity bill savings £1,493
• Total income and savings £7,532
• Carbon reduction (CO2 equivalent) 22 tonnes
ANNUAL RETURN (Average over 20 years)** 2.8%

HIGH DAYTIME ELECTRICITY USE – Benefits for household using 50% of solar generation and exporting 50%. The more solar electricity you use, the more you save in electricity costs, providing it replaces electricity that you would have otherwise used from the grid.

COSTS
Installation cost (inc VAT) £3,679
Inverter replacement (approx. after 10-15 years) £1,000
ANNUAL BENEFIT*
• Feed-in Tariff (paid for 20 tears) £326
• Electricity bill savings £130
• Total annual income and savings £456
• Annual generation (first year) 1,942 units (kWh)
• Carbon reduction (CO2 equivalent) 1.0 tonnes
PAYBACK (time for income to cover cost) 8.3 years
TOTAL BENEFITS OVER 25 YEARS
• Feed-in Tariff (paid for 20 tears) £6,040
• Electricity bill savings £2,985
• Total income and savings £9,025
• Carbon reduction (CO2 equivalent) 22 tonnes
ANNUAL RETURN (Average over 20 years)** 4.1%

* Panel performance is expected to reduce by about 0.8% each year, which will similarly reduce solar output and electricity savings.

** The annual return shown is simply the total return less total costs over 20 years, then divided by 20 (to make annual) and shown as % of the total cost. This is lower than other rates of returns sometimes shown, but should be simpler to understand and compare to other investments. The Feed-in Tariff is paid over 20 years and so only electricity bill savings will be achieved after 20 years, but panels are expected to continue generating for 25 years or more.

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