What electricity price makes solar stop making sense?
Everyone models solar getting better as prices rise. Nobody models the other direction. On our figures a household using 14% of its generation on the median export rate already needs electricity at 31.6p to break even over 25 years — which is above the current cap.
The question nobody asks, with the answer that surprises people.
At the median open untied export rate of 4.1p, the import price needed to break even over 25 years is:
| Self-consumption | Break-even import price |
|---|---|
| 14% — out all day | 31.6p |
| 19% — in half the day | 24.4p |
| 23% — home all day | 20.8p |
| 40% — with storage or an EV | 13.7p |
| 60% | 10.5p |
Today’s price cap unit rate is 26.11p. So the 14% household is already below break-even at current prices, and the 19% household is only just above it.
At the best open untied rate of 12p, export income alone very nearly returns the capital over 25 years, and the import price stops being decisive at all.
Why this direction matters
Every solar calculator in the country models rising electricity prices. It is the industry’s favourite variable, because it only ever improves the answer.
The honest position is that prices move both ways, and that a decision made on an assumed upward path is a bet rather than a calculation. So this page asks the other question: how far would prices have to fall before this stops working?
For most households the answer is “a long way”. For the household that most needs to know — low self-consumption, poor export rate — the answer is “they already have”.
Look at what happens between the two export rates.
At 4.1p, the value of the system rests on avoided import, so the import price is everything. At 12p, the exported units carry so much of the return that the import price could fall substantially without the case collapsing.
That makes an export tariff something more useful than extra income: it is diversification. The two halves of solar’s value respond to different prices, and a household on a good export rate is exposed to both rather than to one.
Switching is free. See every SEG tariff.
What would actually push import prices down
We are not forecasting. But the mechanisms people cite are worth naming so the risk is concrete rather than vague:
- Wholesale gas prices falling, since gas still sets the marginal price much of the time
- Policy costs moving off electricity bills and onto general taxation or gas, which has been proposed repeatedly
- Standing charge rebalancing, which changes the split between fixed and unit costs — a higher standing charge and a lower unit rate is worse for solar, even at the same total bill
That last one is the underrated risk in this section, and it is specifically a risk to solar rather than to households generally. Solar reduces the units you buy, not the daily charge you pay — see does solar reduce your bill or your consumption.
What would push them up
For completeness, and with the same disclaimer:
- Wholesale prices rising, for any of the usual reasons
- Network reinforcement costs landing on bills
- Electrification of heat and transport raising demand
If any of those dominate, every figure on this page improves.
How to use this
If you are at the bottom of the table, the sensible response is not to abandon the idea — it is to move up the table. Raising self-consumption and switching export tariff both change your row, and neither requires different panels.
If you are in the middle, the case is real but not enormous, and it turns on prices nobody controls.
If you are at the top, prices would have to fall by more than half before the question became interesting.
Sources
- Energy price cap unit rates and standing charges
- Solar photovoltaic (PV) cost data
- Smart Export Guarantee Annual Report — SEG Year 5
Contains public sector information licensed under the Open Government Licence v3.0.
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