Payback
How long does solar take to pay for itself in South Africa?
Payback is your installed price divided by the yearly bill saving, and the saving depends on your own tariff block and how much solar you use yourself. On 2026/27 Cape Town Home User rates, cutting a household from 800 kWh to 400 kWh of monthly grid use saves about R1 650 a month, roughly R19 800 a year. Divide your quote by that kind of figure, not by a salesperson’s best case.
Updated 26 October 2026 · Tariffs quoted are the 2026/27 municipal year (from 1 July 2026) unless stated.
The honest formula
- Find your top-block rate on your bill (see 2026 tariffs by metro).
- Estimate how many kWh you will stop buying each month. This is solar you use yourself, plus battery energy you use at night.
- Value exports separately at your distributor’s feed-in rate, if you are registered to export at all.
- Payback in years = installed price ÷ yearly saving. Add a little for battery replacement or inverter repairs over the life of the system.
Worked example on real 2026/27 Cape Town rates
| Before solar | After solar | |
|---|---|---|
| Grid kWh bought per month | 800 | 400 |
| Energy: first 600 kWh at 355.95c | R2 135.70 | R1 423.80 (400 kWh) |
| Energy: above 600 kWh at 469.06c | R938.12 | R0 |
| Services and wires charge | R424.30 | R424.30 |
| Monthly bill (incl. VAT) | R3 498.12 | R1 848.10 |
The saving is R1 650.02 a month, or about R19 800 a year. Both totals match the City’s own published example bills for 800 kWh and 400 kWh. The R6.80 AMI meter fee is left out because it applies on both sides.
Example only: if a quote for that system came to R120 000 installed, simple payback would be about 6 years (R120 000 ÷ R19 800). That R120 000 is an illustrative number to show the maths, not a price we have checked. Use your own quote.
What stretches payback
- Oversized systems that export most of their power. Cape Town credits residential exports at 124.18c/kWh (incl. VAT) in 2026/27, about a third of what you pay to buy a kWh.
- Small bills. A household using 250 kWh a month in Cape Town pays about R1 314; there is little top-block cost to remove.
- Batteries sized for outages rather than savings. Backup is useful, but extra kWh that sit full most nights do not lower your bill.
- Cheap kit that fails early. A battery that needs replacing in year 5 wipes out several years of savings. Long field life matters more than sticker price.
What shortens it
- Running pool pumps, geysers and washing during the day.
- High monthly use that sits in the top tariff block.
- Annual tariff increases. NERSA approved 9.01% for municipal bulk supply in 2026/27.
- Registering your system so you can legally export the surplus you cannot avoid.
Quick questions
What is a good payback period for home solar in South Africa?
There is no single number, but a well-sized system on a high metro bill is usually designed to pay back well within its panel and battery warranty period. Be wary of quotes that only work if tariffs rise sharply every year.
Does exporting power shorten payback?
A little. Exported kWh earn far less than they cost to buy, for example 124.18c versus 355.95c to 469.06c per kWh on Cape Town’s 2026/27 Home User tariff, so using your own solar saves much more.
Should I include the battery in the payback?
Yes, and separately. Work out what the battery saves by shifting daytime solar to the evening, then compare that with its price and expected life.
Sources
- City of Cape Town: The cost of electricity (Home User 2026/27)
- City of Cape Town 2026/27 tariff book: consumption and generation tariffs
- City of Cape Town: sell surplus SSEG electricity
- NERSA media statement: Eskom retail tariffs 2026/27 (5 March 2026)