A solar PV system is not only a contribution to climate protection — it is also an investment that should pay off. But how exactly do you determine whether a PV system on your roof makes financial sense? The answer lies in a sound return on investment calculation that accounts for all relevant factors: from the upfront costs through the feed-in tariff to the electricity price trajectory over the coming decades.
In this guide we explain step by step how a solar PV return on investment calculator works, which variables influence your return on investment (ROI), and what returns you can realistically expect in 2026. At the end you will find a complete worked example with a 25-year overview that serves as a reference for your own planning.
If you would like to estimate your individual PV return in advance, you can use our PV Planner, which is based on real weather data and gives you an initial assessment within a few minutes.
What is the PV return and why does it matter?
The return on a solar PV system describes the annual yield that your investment generates relative to the capital deployed. Unlike many other investment vehicles, the return on a PV system is made up of two components:
-
Savings from self-consumption: Every kilowatt-hour you consume yourself is one you do not have to buy from your energy supplier. At a current electricity price of around 27 cents per kWh (new customers, as of early 2026), this adds up quickly — and all the more so as prices rise.
-
Revenue from grid feed-in: The electricity you do not consume yourself is fed into the public grid, for which you receive the legally guaranteed feed-in tariff.
The PV return matters so much because it allows you to compare your solar system against alternative investments. Only once you know the actual return can you make a well-informed investment decision.
The ROI formula explained
The basic formula for calculating the PV return is:
Annual return (%) = (Annual total yield - Annual costs) / Total investment x 100
The annual total yield is calculated as follows:
Total yield = (Self-consumption x Electricity price) + (Grid feed-in x Feed-in tariff)
To make the calculation tangible, here are the individual components:
| Parameter | Description | Typical value 2026 |
|---|---|---|
| Total investment | Purchase incl. installation, grid connection | 1,200 - 1,600 EUR/kWp |
| Annual yield | Electricity production per kWp | 900 - 1,100 kWh/kWp |
| Self-consumption rate | Share of electricity used on-site | 25 - 35 % (without battery) |
| Feed-in tariff | Remuneration for electricity fed into the grid | 8.0 ct/kWh (partial feed-in) |
| Electricity price | Avoided cost per kWh | 35 - 42 ct/kWh |
| Annual operating costs | Insurance, maintenance, meter rental | 1.5 - 2.0 % of investment |
For a more precise calculation you should also consult the internal rate of return (IRR). This accounts for the time value of money and delivers a return figure that is directly comparable with other investment vehicles.
Factors influencing your PV return
Investment costs
Investment costs are the most important lever for your return. They include the modules, the inverter, the installation, the electrical work, and the grid connection fees. In 2026, system prices for roof-mounted installations typically range between 1,200 and 1,600 euros per kilowatt-peak. Larger systems benefit from economies of scale and achieve lower specific costs.
An optional battery storage system increases the investment costs by approximately 800 to 1,200 euros per kWh of storage capacity, but at the same time significantly raises the self-consumption rate. Whether a battery pays off in terms of return depends on the individual consumption profile. Use our PV Planner to run different scenarios with and without battery storage.
Feed-in tariff
The feed-in tariff is guaranteed by the Renewable Energy Sources Act (EEG) for 20 years from the date of commissioning. For systems commissioned in 2026, the following rates apply:
| System type | Output | Tariff |
|---|---|---|
| Partial feed-in | up to 10 kWp | 8.0 ct/kWh |
| Partial feed-in | 10 - 40 kWp | 6.9 ct/kWh |
| Full feed-in | up to 10 kWp | 12.8 ct/kWh |
| Full feed-in | 10 - 40 kWp | 10.8 ct/kWh |
For most private households, partial feed-in with maximised self-consumption is the more economically sensible option, since the electricity costs saved are significantly higher than the feed-in tariff.
Self-consumption rate
The self-consumption rate is the share of generated solar electricity that you use directly in the household. It is the strongest driver of return, because every kilowatt-hour consumed on-site saves you the full electricity price including all levies and taxes.
Typical self-consumption rates:
| Scenario | Self-consumption rate |
|---|---|
| Without battery, working away from home | 20 - 25 % |
| Without battery, working from home | 30 - 40 % |
| With battery storage (5-10 kWh) | 50 - 70 % |
| With battery + EV + heat pump | 60 - 80 % |
Every 10 percentage point increase in the self-consumption rate can improve the return by 0.5 to 1.5 percentage points, depending on the spread between the electricity price and the feed-in tariff.
Electricity price development
Future electricity price development has a considerable influence on the long-term return of your PV system. Over the past 20 years, electricity prices in Germany have risen by an average of around 3 to 4 percent per year. For a conservative return calculation, we recommend working with an annual electricity price increase of 2 to 3 percent.
At a current electricity price of 27 cents per kWh (new customers, as of early 2026) and an annual increase of 3 percent, the electricity price would stand at around 49 cents per kWh in 20 years. This means: the value of the solar electricity you consume yourself increases year after year, while your generation costs remain nearly constant.
Module degradation
Solar modules lose a small amount of output over time. Modern monocrystalline modules typically degrade by 0.3 to 0.5 percent per year. Most manufacturers guarantee at least 80 to 85 percent of rated output after 25 years.
For the return calculation this means: your annual yield declines slightly, which must be accounted for in any serious projection. At a degradation rate of 0.4 percent per year, a 10 kWp system produces the equivalent of approximately 9.04 kWp effective output in year 25.
Worked example: 10 kWp system with 25-year overview
For our worked example we assume the following parameters:
- System size: 10 kWp
- Investment costs: 14,000 EUR (incl. installation, without battery)
- Annual yield: 1,000 kWh/kWp (location: southern Germany)
- Self-consumption rate: 30 %
- Electricity price (start, new customers early 2026): 0.27 EUR/kWh
- Electricity price increase: 3 % per year
- Feed-in tariff: 0.08 EUR/kWh (fixed for 20 years)
- Annual operating costs: 250 EUR
- Degradation: 0.4 % per year
- Inverter replacement: 1,500 EUR in year 13
| Year | Yield (kWh) | Self-cons. (kWh) | Feed-in (kWh) | Elec. price (EUR) | Savings (EUR) | Feed-in rev. (EUR) | Op. costs (EUR) | Annual profit (EUR) | Cumulative (EUR) |
|---|---|---|---|---|---|---|---|---|---|
| 1 | 10,000 | 3,000 | 7,000 | 0.270 | 810 | 560 | 250 | 1,120 | 1,120 |
| 2 | 9,960 | 2,988 | 6,972 | 0.278 | 831 | 558 | 250 | 1,139 | 2,259 |
| 3 | 9,920 | 2,976 | 6,944 | 0.286 | 851 | 556 | 250 | 1,157 | 3,416 |
| 4 | 9,880 | 2,964 | 6,916 | 0.295 | 875 | 553 | 250 | 1,178 | 4,594 |
| 5 | 9,841 | 2,952 | 6,889 | 0.304 | 897 | 551 | 250 | 1,198 | 5,792 |
| 7 | 9,762 | 2,929 | 6,833 | 0.322 | 943 | 547 | 250 | 1,240 | 8,250 |
| 10 | 9,645 | 2,894 | 6,752 | 0.352 | 1,019 | 540 | 250 | 1,309 | 12,049 |
| 13 | 9,530 | 2,859 | 6,671 | 0.385 | 1,101 | 534 | 1,750 | -115 | 15,728 |
| 15 | 9,454 | 2,836 | 6,618 | 0.408 | 1,157 | 529 | 250 | 1,436 | 18,649 |
| 20 | 9,267 | 2,780 | 6,487 | 0.473 | 1,315 | 519 | 250 | 1,584 | 26,439 |
| 25 | 9,084 | 2,725 | 6,359 | 0.548 | 1,493 | 509 | 250 | 1,752 | 34,754 |
| 21 | 9,230 | 2,769 | 6,461 | 0.625 | 1,731 | 420 | 250 | 1,901 | 34,178 |
| 22 | 9,193 | 2,758 | 6,435 | 0.641 | 1,768 | 418 | 250 | 1,936 | 36,114 |
| 23 | 9,156 | 2,747 | 6,409 | 0.657 | 1,805 | 417 | 250 | 1,972 | 38,086 |
| 24 | 9,120 | 2,736 | 6,384 | 0.673 | 1,841 | 415 | 250 | 2,006 | 40,092 |
| 25 | 9,083 | 2,725 | 6,358 | 0.690 | 1,880 | 413 | 250 | 2,043 | 42,135 |
Results of the worked example:
- Payback period: approx. 9 - 10 years
- Total profit after 25 years: approx. 28,135 EUR (after deducting the investment of 14,000 EUR)
- Average annual return: approx. 5.5 - 6.5 %
- Internal rate of return (IRR): approx. 8 - 9 %
Please note that this is a simplified model calculation. Your actual return depends on your specific location, your roof orientation, and your consumption behaviour. With our PV Planner you can carry out a calculation tailored to your location, based on measured irradiance data.
Solar PV return compared to other investments
How does a PV system stack up against classic investment vehicles? The following table gives you an overview:
| Investment type | Expected return p.a. | Risk | Liquidity | Inflation protection |
|---|---|---|---|---|
| Solar PV system | 5 - 9 % | Low | Low | Yes (rising electricity price) |
| Overnight deposit account | 2 - 3 % | Very low | Very high | No |
| Fixed-term deposit (5 years) | 2.5 - 3.5 % | Very low | Low | No |
| Government bonds | 2 - 3 % | Low | Medium | Partially |
| Equity ETF (broadly diversified) | 6 - 8 % | Medium-high | High | Yes |
| Real estate (rental) | 3 - 6 % | Medium | Very low | Yes |
In the current interest rate environment, a solar PV system offers one of the most attractive returns in the low-risk segment. Unlike equities, the PV return is not subject to market fluctuations. The feed-in tariff is guaranteed by law, and self-consumption directly protects you against rising electricity prices. The only drawback: you cannot liquidate the investment at short notice.
Another often underestimated advantage: the return on a PV system is largely tax-free. Since 2023, income from PV systems of up to 30 kWp has been exempt from income tax. VAT on systems of up to 30 kWp is also 0 percent, which reduces the purchase costs further.
Typical PV returns in 2026
The return on a solar PV system depends heavily on individual circumstances. Nevertheless, typical return ranges can be stated for 2026:
| Scenario | Return (IRR) | Payback period |
|---|---|---|
| Unfavourable (north-facing roof, low self-consumption) | 3 - 5 % | 14 - 18 years |
| Average (east/west roof, 30 % self-consumption) | 5 - 7 % | 10 - 13 years |
| Good (south-facing roof, 40 % self-consumption) | 7 - 9 % | 8 - 11 years |
| Optimal (south-facing roof, battery, EV, heat pump) | 8 - 12 % | 7 - 10 years |
Several factors that positively influence your return in 2026 include the continued low module prices, the stable feed-in tariff, and the persistently high household electricity prices. The main negative factor is the declining feed-in tariff combined with slightly rising installation costs due to higher labour rates.
As a general rule: the more electricity you consume yourself and the more electricity prices rise, the better your PV return will be. The combination of a PV system, battery storage, and electrical consumers such as a heat pump or electric vehicle is particularly attractive from a return perspective.
Common mistakes in return calculations
To make your calculation as realistic as possible, you should avoid the following common mistakes:
-
Ignoring degradation: Many calculators assume a constant yield. The annual output reduction of 0.3 to 0.5 percent adds up to 7 to 12 percent less output over 25 years.
-
Forgetting the inverter replacement: The inverter typically lasts 10 to 15 years. Budget approximately 1,500 to 2,500 euros for a replacement.
-
Underestimating operating costs: Insurance, meter rental, and occasional maintenance together cost 200 to 350 euros per year.
-
Overly optimistic self-consumption rate: Without battery storage and when working away from home, a realistic self-consumption rate is 20 to 30 percent, not the 40 percent often advertised.
-
Not accounting for inflation: The real return is approximately 2 percentage points below the nominal return after deducting inflation. However, the value of the electricity saved rises with inflation.
Frequently asked questions
Is a solar PV system still financially worthwhile in 2026?
Yes, a solar PV system is financially worthwhile in the vast majority of cases in 2026. Despite the reduced feed-in tariff, low module prices and high electricity costs deliver attractive returns of typically 5 to 9 percent per year. The decisive factor is the highest possible self-consumption rate, since the spread between the electricity price and the feed-in tariff accounts for the bulk of the return. A system pays for itself on average after 9 to 12 years and generates a clear profit over its entire operational life of 25 to 30 years.
What is the easiest way to calculate the return on my PV system?
The simplest method is to calculate the annual total return: add the electricity costs saved (self-consumption multiplied by the electricity price) and the feed-in revenue, deduct the annual operating costs, and divide the result by the total investment. For a more accurate calculation that accounts for the time value of money and rising electricity prices, the internal rate of return (IRR) is recommended. The most convenient approach is to use a specialised tool such as our PV Planner, which automatically incorporates location-specific yield data and current feed-in tariff rates.
Which PV system size delivers the best return?
The return-optimal system size depends on your electricity consumption. As a rule of thumb: a system whose annual yield corresponds to approximately 1.0 to 1.5 times your annual consumption offers the best balance between a high self-consumption rate and maximum electricity generation. For an average four-person household with 4,500 kWh annual consumption, this would be a system of between 5 and 8 kWp. Larger systems generate more electricity, but the additional production is only fed into the grid and receives a lower tariff. With battery storage or additional consumers such as a heat pump, a larger system can nonetheless make sense.
Does a battery storage system improve the return on my PV system?
A battery storage system typically raises the self-consumption rate from 25 to 35 percent to 50 to 70 percent, which means significantly more expensive grid electricity is avoided. However, storage costs remain high. Purely from a return perspective, a battery is currently often just about neutral to marginally positive: the additional savings barely cover the extra costs. Battery storage pays off from a return standpoint above all when electricity prices continue to rise, or when you also use the battery for dynamic electricity tariffs or backup power. Storage prices are falling continuously, however, so the return equation is improving steadily.
What effect does roof orientation have on PV return?
Roof orientation affects the annual yield and thereby directly affects the return. A south-facing orientation with a 30 to 35 degree tilt delivers the maximum yield of around 1,000 to 1,100 kWh per kWp in southern Germany. East- or west-facing roofs achieve around 80 to 90 percent of that, which reduces the return by 1 to 2 percentage points. Interestingly, an east-west configuration can enable a higher self-consumption rate despite a lower total yield, because electricity generation is more evenly spread throughout the day. Even north-facing roofs with a slight tilt can still be worthwhile at current low module prices. A precise site analysis is therefore indispensable.
Conclusion: Calculate your PV return and invest with confidence
A solar PV system is one of the most attractive low-risk investments in 2026. With typical returns of 5 to 9 percent, it significantly outperforms most fixed-income investment vehicles. Well-planned systems pay for themselves in 8 to 12 years, while the system continues to generate electricity for 25 to 30 years or longer.
The key to a high return lies in correct system sizing, maximising self-consumption, and a realistic calculation that accounts for all costs and yield reductions. Do not be misled by excessively optimistic promises, but do not shy away from an investment that makes solid financial sense in almost all scenarios.
Calculate your individual PV return now
Would you like to know what return a PV system on your own roof could achieve? Our PV Planner calculates, on the basis of real weather data and your individual consumption profile, what yield you can expect at your location. Start your free simulation now and make your investment decision on a solid data foundation.