Before installing solar, most people ask: how many years until it pays for itself? This is the payback period. You can estimate it yourself with a few numbers.
The basic formula
Payback period (years) = total system cost ÷ annual savings
Step 1: Total system cost
Include panels, inverter, structure, wiring, installation, metering/application fees and any batteries. Get written quotes from at least two installers.
Step 2: Estimate annual generation
A rough rule for Pakistan: each 1 kW of panels produces about 3.5–4.5 units per day on average across the year, depending on location, orientation, shading and dust.
A 10 kW system ≈ 10 × 4 × 365 ≈ 14,600 units per year.
Step 3: Split generation into self-use and export
- Self-consumed units save you the full grid price (including adjustments and taxes).
- Exported units earn the net billing buyback rate (reported at around Rs 11 per unit in 2026) for new connections.
Step 4: Calculate annual savings
Example (illustrative):
- Self-consumed: 9,000 units × Rs 50 = Rs 450,000
- Exported: 5,600 units × Rs 11 = Rs 61,600
- Annual savings ≈ Rs 511,600
Step 5: Divide
If the system costs Rs 1,500,000: 1,500,000 ÷ 511,600 ≈ 2.9 years.
Things that change the result
- Self-consumption share: higher self-use = faster payback.
- Tariff changes: rising grid tariffs shorten payback; changes to buyback rates affect export value.
- Batteries: add cost but increase self-consumption.
- Panel degradation: output declines slowly over time (often around 0.5% a year for good panels).
- Maintenance: cleaning, inverter replacement after some years.
- Financing costs if you take a loan.
A realistic approach
Use your last 12 months of bills to see how many units you buy and when. Ask your installer for a generation estimate for your roof, then calculate payback for both a conservative and an optimistic case.
This is a planning estimate, not financial advice. Prices and policies change, so verify current buyback rates and tariffs before deciding.