Four things have lined up for UK solar in 2026. Here's what they are, what could shift them, and where the maths is strongest.
Four favourable factors at once
- Panel prices at multi-year lows: Tier-1 modules are around 18% cheaper than their 2024 peak
- SEG export rates at all-time highs: the best fixed tariff is 15–16.5p/kWh, with agile tariffs hitting 20p+ at peak demand
- Grid retail prices stable in a 27–32p/kWh band for over 18 months, so your savings rate is predictable
- 0% VAT on qualifying installs until 31 March 2027, with a guaranteed price increase after that date
The closest the UK has come to this was 2018, just before the Feed-in Tariff closed to new applicants in March 2019.
Payback compared across years
For a typical 4kW + 10kWh install in southern England, household usage 3,500 kWh/year:
- 2018 (FiT era): ~£8,500 install, FiT + savings ≈ £750/yr → ~11-year payback
- 2022 (post-COVID peak): ~£12,500 install, SEG + savings ≈ £550/yr → ~22-year payback
- 2024: ~£12,000 install, SEG + savings ≈ £720/yr → ~17-year payback
- 2026: ~£10,500 install, SEG + savings ≈ £950/yr → ~11-year payback
The 2026 payback is in the same ballpark as the Feed-in Tariff era, without a closed-window subsidy.
What could shift this
Three things to watch. First, VAT reverts to 5% on 1 April 2027, adding £400–£800 to the typical install. Second, if wholesale gas keeps dropping, retail electricity could fall too. That lengthens payback (good for bills, less good for the solar maths). Third, SEG rates could compress if more households export at the same time of day. The best protection is a battery and an agile-friendly tariff.
The verdict
2026 isn't a "now or never" moment, and any installer pitching it that way is exaggerating. It's as good as it's likely to get for a while. If you've been thinking about solar for 12 months and waiting for a sign, the maths is the sign.
