Solar panel yield and payback period

When considering a solar electricity system, it is of course important to know how much solar panels produce in Finnish conditions and how quickly the system pays for itself.

There can be many reasons for installing a solar panel system such as environmental friendliness, energy independence, or economic benefit which is probably the most common reason. If financial return is your primary motive it is wise to start by finding out what monetary value is generated and in what time frame.

Solar panel yield depends on many factors

The amount of electricity solar panels generate depends on many things:

• Which panel type has been selected?
• How many panels are installed in the system?
• Which direction the panels face?
• What tilt angle the panels have?
• Whether there is shading on the roof?
• And what the weather conditions are?

In Finland solar panel output is often 75 to 90 percent of the nominal peak power. As a guideline panels with 400 watt peak output tend to generate around 350 to 380 kilowatt hours of electricity per year under Finnish weather conditions.

A typical residential solar system consists of 10 to 20 panels. For example a fifteen panel system would likely produce around 5250 to 5700 kilowatt hours annually.

Read more about solar panel sizing.

Solar panel yield in Finland

Finland’s northern location may cause concern but solar panels still generate electricity effectively. The typical production season in Finland runs from March to September though year to year differences exist and location also affects yield.

It is important to remember that although winter in Finland is dark there is ample sunshine during other seasons. In addition Finland’s cool climate is actually optimal for solar panel performance. In hot climates panels can perform worse than in cooler conditions.

How solar panel output varies across Finland

Finland is a long country but panels still perform reasonably well in northern regions. Southern Finland receives more solar radiation, though the difference is relatively small. According to Motiva a 1 kWp system yields around 800 to 1000 kilowatt hours in southern Finland and 700 to 900 kilowatt hours in northern Finland.

Solar panel yield in winter

Solar panels require light so their winter output is minimal. Temperature also affects output but sunlight is the main factor. Finnish winters are known for low light levels though late winter can still feature bright days. While daylight is limited during winter the higher production in summer compensates for this.

If the system is mounted on the ground panels can be cleaned of snow late in the season for some extra production though we do not recommend clearing snow for just a few hours of sunlight.

Despite limited winter yield solar power remains a sensible investment even in Finland. It pays to look at annual yield rather than seasonal fluctuations when evaluating cost effectiveness.

We recommend energy solutions to reduce winter power use alongside solar such as using a heat pump for heating.

Payback period for solar panels is approximately 10 to 12 years

The financial benefit of solar panels is measured through electricity savings from avoided purchase and grid usage plus compensation for surplus sold to the grid. Once savings equal the initial investment the system has paid for itself.

The payback period is difficult to predict precisely because savings depend heavily on your electricity purchase contract, grid fees, and especially the system’s potential production. The monetary value of energy sold to the grid is based on Nord Pool hourly spot prices which also vary over time.

There are many variables so any projections made today are estimates.

A properly sized and cost efficient solar system typically pays for itself in about 10 to 12 years under current electricity prices. Over its lifetime the investment should yield approximately two and a half times its initial cost. Long warranty periods on components also protect the investment.

Greatest benefit when solar electricity is used at home

When evaluating solar investment it is important to consider system sizing. When the priority is economic benefit, rather than purely eco values, sized systems typically cover about one third of home electricity usage.

This ensures that most of the electricity is used on site rather than excess sold to the grid. Oversized systems produce significant surplus in summer which may not be consumed.

Solar electricity’s economic value is highest when used directly at home. This avoids grid and tax costs associated with purchased electricity
Selling surplus electricity to the grid is generally less profitable.

Exception: If your home has a cheap fixed price contract but spot prices are high you might earn a temporarily high price for sold electricity. However speculative attempts to profit from that are not usually recommended. Best practice remains using produced energy at home

Multiple factors affect solar investment value

Remember solar installation can offer indirect benefits such as increased property value. While that cannot be measured directly it is clear that energy independent and efficient properties perform better in the real estate market.

Solar systems usually come with long warranties. For example Hehku systems include a 25 to 30 year performance guarantee that ensures panels produce around 85 to 90 percent of nominal power during warranty period. Of course production continues after warranty period as well.

If solar panel payback is around 10 to 12 years the system continues to generate electricity for your property for years, even decades beyond that.