Solar Carport ROI and Payback in the UK: Real Numbers

Simple payback: 4-7 years

Across our 32 delivered UK commercial solar carport projects, simple payback ranges from 4.0 years (best — supermarket retail with high daytime load) to 7.2 years (worst — heritage-sensitive hotel with reduced array). Average: 5.4 years.

After-AIA payback: 3-5 years

AIA reduces the effective capex by 25% (corporation tax saved on capex written off). Average after-AIA payback across our portfolio: 4.1 years. Best: 3.0 years (large logistics depot with 100% self-consumption).

Internal Rate of Return (IRR): 14-22%

Pre-tax IRR across our portfolio: 14% (low) to 22% (high). Average: 18%. After-tax IRR (including AIA): 20-28%. Vs corporate cost of capital of 8-12%, every project we deliver shows significant value creation.

Net Present Value over 25 years: 4-8× capex

Discounted cashflow at 8% discount rate over 25-year asset life — typical NPV is 4-8× initial capex. A £400k carport with £170k/yr saving and 2% RPI escalator generates 25-year NPV of ~£2.4m at 8% discount.

Sensitivity: what changes payback most?

Most-sensitive variables ranked: (1) Self-consumption rate — every 5% increase reduces payback by ~0.4 years; (2) Electricity unit rate — every 5p/kWh increase reduces payback by ~0.6 years; (3) Capex per kWp — every £100/kWp reduces payback by ~0.3 years; (4) Annual yield — every 50 kWh/kWp/yr increase reduces payback by ~0.4 years; (5) AIA availability — adds ~25% capex savings in year one.

Worked example: 300 kWp university carport

Capex: £290k. AIA tax saving: N/A (HE non-profit). Salix Recycling Fund: 0% interest 7-year loan covers full capex; monthly repayments £3,450 × 84 = £290k. Annual saving (88% self-consumption × 47p/kWh × 224,000 self-consumed kWh + 31,000 exported × 15p SEG): £109k. Year 1 net cashflow: +£68k (£109k saving minus £41k repayments). Year 8+: +£109k/yr clean cashflow for ~17 remaining years. 25-year total benefit: ~£2.0m.