19 years of free electricity from solar panel payback – analysis

Markets and global crises are driving global momentum on renewables - including rooftop solar with ever-shorter payback periods, and grid-scale solar that is cheaper than gas.

By Tricia Curmi


Last updated:

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

At the same time, the cost of solar farms has reached just £54 per MWh (megawatt hour), compared to a price for gas power stations of £85 per MWh in 2025, as predicted before the current crisis [2]. Since the crisis, commodities traders have put the cost for gas in excess of £200/MWh, in ‘day ahead’ prices.

If true, recent speculation that Ministers were to curb solar deployment on poorer quality farmland would have led to household energy bills being even higher.

The analysis, commissioned by the Energy and Climate Intelligence Unit (ECIU) also found that solar farms combined with battery storage will cost £66/MWh in just four years’ time. These batteries will enable a solar farm to supply electricity even after dark.

With the gas price crisis keeping household bills high, UK consumers are driving a surge in demand for solar based solely on seeking cheap, secure power, with 8,000 installations a month.

The report also finds that costs for rooftop solar panels combined with a domestic battery are set to fall, with payback on the initial investment reeducing from nine to seven years. These batteries reduce bills and, as with some electric cars, provide households with electricity even during power cuts.

Commenting 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.”

The analysis shows that at grid-scale, solar is much cheaper than gas in the UK – with and without accompanying battery storage. Previously, gas power has been favoured for being ‘despatchable’ - able to be switched on when power demand goes up - but now batteries are enabling solar energy to be ‘despatched’ at night.

The report finds that, at £82/MWh solar plus battery is already cheaper than gas prices, even before Russia’s invasion of Ukraine, and that costs are set to fall sharply in coming years, to under £66/MWh for solar plus storage in 2026.

Matt Williams, Land Use Analyst at ECIU, said: “It appears that the government is rowing back on restrictions for large-scale solar farms. This is good news for consumers and for the grid, as they’ll help both lower bills and make our power system more resilient.

“Renewables like solar can also help hard-pressed farmers, who have been hit by both soaring energy costs and higher prices for fertilisers, as on-farm renewables have a huge potential to lower bills.” [3]

Solar deployment has also surged in Europe, with summer 2022 seeing solar generate a record 12% of the EU’s power (up from 9% in summer of 2021), breaking records in 18 EU member states, and generating nearly a quarter of the Netherlands’ power and nearly a fifth of Germany’s. This displaced €29 billion of gas for power generation.

The bloc is in the process of increasing its renewable ambition, making it easier to deploy clean technology, and potentially increasing the 2030 renewable energy target to 45% - as required by the REPowerEU plan - from the 40% previously agreed in its Green Deal. Analysts Ember have calculated that doing this would slash EU gas imports in half, avoiding a cumulative €200 billion in gas costs between 2025 and 2030. [4]

Notes to editors:

1. The report, Global Momentum on Clean Transition: The energy price shock and the low-carbon transition - solar power surge, is available here: https://eciu.net/analysis/reports/2022/solar-power-charge-global-momentum

2. The levelised cost of energy (LCOE) calculations are published in BEIS’ Electricity Generation Cost Report 2020 - https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/911817/electricity-generation-cost-report-2020.pdf

3. ECIU analysis: Farmers could be denied almost £900 million from solar generation: https://eciu.net/media/press-releases/2022/farmers-could-be-denied-1-billion-from-solar-generation

4. Small Step Up for Renewables, Giant Fall for Gas: https://ember-climate.org/insights/research/small-step-up-for-renewables-giant-fall-for-gas/

5. Bloomberg revises its global estimates for new solar build this decade up by 39% and the International Energy Agency forecasts solar power capacity worldwide will outstrip gas in 2026, and coal in 2027 to become the biggest single source of electricity generation.

For more information: