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Switching to cleaner energy options such as solar panels is becoming increasingly popular among UK homeowners. According to the latest government data[1], there were 15,563 solar panel installations in the UK in April 2024, more than in the previous three months combined.
Our experts have consulted many solar panel manufacturers, installers and industry professionals and conducted in-depth analysis of market trends to provide reliable, up-to-date information for homeowners considering adopting solar power.
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Understanding the costs and potential savings involved with solar panels is crucial for making an informed choice. Current market trends show a steady increase in solar panel adoption in the UK, driven by technological advancements, growing environmental awareness and the introduction of a zero rate VAT for energy-saving materials by the UK government.
When assessing solar panel costs, homeowners should consider the panels’ specifications, such as their power output, product warranty and efficiency rating. They should also take into account the available roof space for installing solar PV panels.
| Property size | Solar panel cost | String inverter cost (included in panel costs) | Battery cost | Labour cost | Total |
|---|---|---|---|---|---|
| 1 bedroom | £4,700-£4,900 | £900 | £1,000 | £300-£500 | £6,000-£6,400 |
| 2 bedroom | £5,700-£5,900 | £1,000 | £2,000 | £300-£500 | £8,000-£8,400 |
| 3 bedroom | £5,900-£6,500 | £1,200 | £2,500 | £600-£1,200 | £9,000-£10,200 |
| 4 bedroom | £7,000-£8,000 | £1,500 | £4,000 | £1,800-£3,000 | £12,800-£15,000 |
There are several types of solar panels: monocrystalline panels, which cost around £1 per watt; polycrystalline panels, at around £0.90 per watt and thin-film panels, priced at £0.80 per watt.
Inverters are typically included in the solar installation price and cost between £900 and £1,500, depending on the type of inverter and size of your system.
A solar panel inverter works by converting the direct current (DC) generated by the solar panel into alternating current (AC), which is used for electrical appliances.
Solar storage batteries are an optional extra. However, you can increase your savings by including one in your system. Depending on which size you require, they will cost anywhere between £1,000 and £4,000.
| House size | Number of panels | Solar battery size | Battery cost |
|---|---|---|---|
| 1 Bedroom | 4 | 1.5kWh | £1,000 |
| 3 Bedrooms | 12 | 3kWh | £2,000 |
| 4+ Bedrooms | 16 | 5kWh | £4,000 |
The size and complexity of the installation dictates labour costs, with a small one-bedroom property costing between £300 and £500 to install a solar system (up to £3,000 for a large four-bedroom home). The installation cost includes scaffolding, the electrical system, documentation and labour.
The chart below breaks down the cost components of a solar panel installation.
Several factors will influence the overall cost of your solar panel system.
The three main types of solar panels are:
Whatever type of panel you choose, you should balance their upfront costs with the return on your investment.
The average UK household uses between 8 and 10 kWh of electricity per day. Your chosen solar panel installer will determine the system size that is right for your household based on several factors, including on your energy consumption, roof size and budget.
However, if you want to find this out for yourself so you can get an accurate estimate for your solar panel system, we’ve broken down the calculation into five easy steps.
Step 1: calculate your daily electricity usage by dividing the total kWh on your energy bill by the number of days it covers. Repeat this for several bills to get an average daily estimate
Step 2: decide how much of your electricity you want your panels to produce. More power generation means higher initial costs but lower energy bills
Step 3: determine the power output rating of your chosen solar panels. For most residential panels, this will typically range from 200W to 450W
Step 4: multiply the panel’s output by 4.19 (average UK sunlight hours) and then by 0.75 to account for efficiency losses. This gives you the daily energy your panel will produce
Step 5: divide your daily energy use by the energy each panel generates to determine how many panels you need
The type and condition of your roof will significantly influence the efficiency of your solar panels, and thus your potential savings.
Once you connect with a solar panel installer, they will begin the installation process. This consists of:
The cost of installing solar panels can vary significantly depending on the region. Installation costs are generally higher in urban areas such as London and the South East due to higher labour rates and operational expenses. Conversely, regions, such as the North East and Wales, often benefit from lower installation prices because of reduced labour costs and overall living expenses.
The availability of local installers also contributes to regional cost differences. Areas with a higher concentration of solar panel installers, such as the big cities or in the South West, may experience more competitive pricing, whereas remote areas might have fewer options, potentially leading to higher costs due to travel and logistical challenges.
Local government incentives and regional energy policies can also impact the overall cost. Some regions may offer more substantial subsidies or grants, making solar panel installations more affordable for homeowners in those areas.
By choosing a certified solar panel installer, you can ensure the company’s quality and compliance with industry standards. Start by checking for accreditation from the government’s Microgeneration Certification Scheme (MCS), which guarantees the installer meets rigorous standards and allows you to benefit from the Smart Export Guarantee (SEG) scheme.
Look for memberships in trade associations such as the Renewable Energy Consumer Code (RECC) or the Solar Trade Association (STA), which indicate adherence to high ethical standards.
A number of things can help you reduce the cost of your solar panel installation.
How much do solar panels cost throughout the UK? Find out how much they would cost for your home by answering a few quick questions
At the current energy prices, a typical three-bedroom house with a 4.5kW system could save up to £871 per year, allowing homeowners to break even in approximately eight years.
Sell excess energy through the SEG scheme
Generating your own energy with solar panels can save you money, and you can increase your annual savings by selling any surplus energy to the National Grid. The Smart Export Guarantee scheme (SEG) is a UK initiative that requires electricity suppliers to compensate households and small businesses for any excess renewable energy they generate and export to the grid. This is one of the reasons many people choose to add a solar battery to their solar system.
Below are the payments you could expect to receive through the SEG scheme, with or without a solar battery.
Potential savings without a solar battery, based on someone being at home for half the day
| Number of solar panels | Annual energy bill saving | SEG payment | Approximate total annual savings |
|---|---|---|---|
| 4 | £117 | £90 | £207 |
| 12 | £203 | £333 | £536 |
| 16 | £251 | £452 | £703 |
Potential savings with a solar battery, based on someone being at home for half the day
| Number of solar panels | Annual energy bill saving | SEG payment | Approximate total annual savings |
|---|---|---|---|
| 4 | £324 | £0 | £324 |
| 12 | £796 | £75 | £871 |
| 15 | £951 | £148 | £1,099 |
Energy suppliers with 150,000 or more customers must supply at least one SEG tariff to customers in England, Scotland and Wales. Some tariffs have better prices per kW than others, so it’s advisable to shop around before making a decision.
You’ll also need to decide between fixed and variable tariffs:
You don’t need to be an existing customer to sign up for any of the energy tariffs in the table below, and you don’t need to switch to opt into their SEG tariff. However, existing customers tend to be offered better rates, so bear this in mind.
Potential savings and payback period for a 4.5kW solar system according to SEG tariff rates. Prices updated as of May 2024.
| Supplier | SEG tariff | Rate per kWh | Variable/fixed | Potential total savings | Payback period |
|---|---|---|---|---|---|
| Octopus Energy (own customers) | Intelligent Octopus Flux | Average 27.1-36.1 | Variable | £1,094 | 10 years |
| Octopus Energy (own customers) | Octopus Flux | Average 24 | Variable | £970 | 9 years |
| OVO Energy (own customers with battery) | OVO SEG tariff | 20 | Fixed for 12 months | £941 | 10 years |
| So Energy (panels and battery installed by company) | So Export Flex | 20 | Variable | £941 | 10 years |
| E.ON Next (own customers) | Next Export Exclusive | 16.5 | Fixed for 12 months | £920 | 10 years |
| OVO Energy (own customers with solar panels only) | OVO SEG tariff | 15 | Fixed for 12 months | £905 | 10 years |
| British Gas (own customers) | Export & Earn Plus | 15 | Variable | £905 | 10 years |
| Octopus Energy (own customers) | Outgoing fixed | 15 | Fixed for 12 months | £905 | 10 years |
| Scottish Power (customers whose panels were installed by the company) | Smart Gen+ | 15 | Variable | £905 | 10 years |
| Scottish Power (customers whose panels were installed by another company) | Smart Gen | 12 | Variable | £883 | 10 years |
| So Energy | So Export Flex | 7.5 | Variable | £854 | 11 years |
| British Gas (non-customers) | Export & Earn Flex | 6.4 | Variable | £840 | 11 years |
| EDF Energy (own customers) | Export Variable Value | 5.6 | Variable | £840 | 11 years |
| Utility Warehouse (own customers) | UW SEG tariff | 5.6 | Variable | £840 | 11 years |
| Pozitive Energy | SEG tariff | 5 | Variable | £833 | 11 years |
| Octopus Energy (non-customers) | Outgoing Go | 4.1 | Fixed for 12 months | £825 | 11 years |
| OVO Energy (non-customers) | OVO SEG tariff | 4 | Fixed for 12 months | £825 | 11 years |
| EDF Energy (non-customers) | Export Variable | 3 | Variable | £818 | 11 years |
| E.ON Next (non-customers) | Next Export | 3 | Fixed for 12 months | £818 | 11 years |
| SSE (existing customer) | Smart Export tariff | 3.5 | Variable | £818 | 11 years |
| Shell Energy | SEG V1.1 tariff | 3.5 | Variable | £818 | 11 years |
| Utilita Energy | SEG tariff | 3 | Variable | £818 | 11 years |
| Utility Warehouse (non-customers) | UW SEG tariff | 2 | Variable | £811 | 11 years |
| E | SEG January2020v.1 | 1 | Variable | £804 | 11 years |
The best solar panels could save you hundreds of pounds annually. Exactly how much your household could save with solar panels depends on:
You’ll save more if you spend more time at home. When your solar panels are generating electricity, that’s a good time to use electrical appliances, such as the dishwasher and washing machine. This will allow you to avoid paying to use them when you’re using grid electricity.
| Property size | System size | Number of panels | Estimated costs (including installation and battery) | Approximate annual savings on electricity bill, including SEG payments | Approximate savings after 25 years |
|---|---|---|---|---|---|
| One bedroom | 1.5kW | 4 | £6,200 | £324 | £8,100 |
| Three bedrooms | 4.5kW | 12 | £9,100 | £871 | £21,775 |
| Four bedrooms | 6kW | 16 | £12,000 | £1,099 | £27,475 |
The break-even point refers to the time it takes for the savings from your reduced electricity bills and any SEG payments received to surpass the initial investment cost of the solar panels. This critical figure indicates when you will begin seeing a tangible return on your investment.
Solar panels typically break even around eight to 12 years after installation. However, this varies based on the system size, SEG payments, current electricity prices and your electricity usage, so only use our estimates as a rough guide.
Taking the system cost and balancing it against any savings, when does a solar system break even?
| Property size | System size | Number of panels | System cost (including installation and battery) | Approximate savings (including SEG) | Break-even point |
|---|---|---|---|---|---|
| One bedroom | 1.5kW | 4 | £6,200 | £324 | 19 years |
| Three bedrooms | 3kW | 12 | £9,100 | £871 | 10 years |
| Four bedrooms | 5kW | 16 | £12,000 | £1,099 | 11 years |
We’ve also calculated the break-even point should the price of energy decrease or increase by 30 per cent.
| If energy prices drop by 30%* | Savings based on the 1 April 2024 price cap | If energy prices increase by 30%* | |
|---|---|---|---|
| Electricity bill savings | £183 | £261 | £340 |
| SEG payment** | £313 | £313 | £313 |
| System cost | £7,100 | £7,100 | £7,100 |
| Years to break even | 14 years | 12 years | 11 years |
How many panels did you install? What did you invest, and when will you break even?
“The investment was £8,000, and I expect the return to be in the region of five to six years, based on our energy consumption, as we use a lot of the electricity produced to charge our electric car. We’ve got 18 panels on the roof, one inverter and two batteries.”
Has the energy crisis affected you, and how much of the energy you produce do you use?
“The price cap has obviously had an impact because we still use some [electricity] from the grid, so that’s gone up. But, by the sheer fact that 65 per cent of what we use we produce ourselves means that, as a result, it has not gone up anything like it has for everybody else and clearly increases the return on our investment.”
What advice would you give to homeowners considering a solar panel installation?
“I would say go for the biggest system that you can get that will fit your roof because we’re only going to be using more and needing to produce more, not less. A bigger system means you’ll be producing more of your own energy, and your savings will increase, especially if you include an energy storage battery.”
Solar panels are cheaper now than they were ten years ago, while electricity prices have increased significantly. Additionally, advancements in solar panel technology have greatly improved their efficiency and durability. These factors combined make it an excellent time to invest in solar panels and enjoy immediate and long-term financial benefits.
There are various financing options for solar panels, each catering to different consumer needs. Understanding these options is crucial for homeowners investing in solar energy.
Purchasing solar panels with cash involves a significant upfront investment, but it offers the quickest return on investment, increases property value and avoids monthly payments and interest.
| Advantages | Disadvantages |
|---|---|
| Increases property value | Requires significant upfront capital |
| Rapid return on investment due to savings and incentives | Owner bears all maintenance and repair costs |
| No ongoing monthly payments or interest |
Solar subscription plans allow you to benefit from solar power without high upfront costs. Homeowners pay a regular fee, and the provider handles installation, maintenance and operation.
| Advantages | Disadvantages |
|---|---|
| No upfront costs | Early termination fees may apply |
| Easy budgeting with fixed fees | Some plans do not include ownership of the panels |
| Provider handles maintenance and repairs |
Solar loans enable homeowners to purchase solar panels by making regular payments, which is suitable for those wanting to own their panels without an upfront investment.
| Advantages | Disadvantages |
|---|---|
| Ownership of panels upfront | Potential for high interest rates |
| Poor credit may limit options or increase costs |
Some installers offer flexible payment options, allowing payments in instalments, sometimes with low or zero interest rates initially.
| Advantages | Disadvantages |
|---|---|
| Competitive lending options | Monthly payments may increase after introductory period |
| Ownership of panels upon completing payments | Initial payment required |
Leasing allows homeowners to rent a solar system with no upfront costs and pay monthly or annually, with the provider being responsible for maintenance.
| Advantages | Disadvantages |
|---|---|
| Minimal upfront costs | No system ownership, limiting financial benefits |
| Provider handles maintenance | Long-term commitment with potential early termination benefits |
| Renters can benefit from solar systems |
Instead of owning the system, homeowners can opt for a power purchase agreement, which involves paying for the energy generated by the system at a reduced rate.
| Advantages | Disadvantages |
|---|---|
| Little to no upfront costs | No system ownership |
| No maintenance responsibility | Long-term commitment with possible early termination fees |
| Lower electricity rates | Monthly or annual payments required |
Green mortgages offer a greater borrowing capacity for eco-friendly home improvements such as solar panel installations, recognising the value they add.
Although the benefits of installing solar panels far outweigh the negatives in the long run, the initial cost can be a tough hurdle to overcome. However, a few government solar panel grants are on hand to help mitigate some of the costs.
Through the UK government scheme Energy Company Obligation (ECO4), managed by Ofgem, homeowners receiving means-tested benefits could be eligible to save money on the cost of solar panels. Those who are not receiving means-tested benefits but are still living in fuel poverty might be eligible to save money through the Local Authority Flexible Eligibility, which is an extension of the ECO4.
“The cost of living situation is a big incentive for homeowners to install a solar system. Three years ago, 1kW was worth between 11p and 14p. Now, it’s between 30p and 36p, and electricity suppliers are paying home generators that amount for surplus energy generated. Octopus is offering the best return at present.
“If you’ve decided against solar panels in the past, it is worth looking again, as technological advances have made panels more efficient, with better returns. Using your own solar energy will always save money.”
Once you’ve had your panels installed, there are several ongoing costs to consider.
When installed correctly, solar panels are designed to last 25 years or more. Thanks to their simple construction, and because they have no moving parts, they are relatively low maintenance.
However, you should carry out annual maintenance throughout your panels’ lifespan. By doing so, you’ll maximise their productivity and ensure that you get the most power out of each panel.
Essential maintenance:
You may need to replace your battery and inverter over their 25-year lifespan, so these costs should be factored into any calculations.
The cost of replacing a solar battery depends on the type and capacity of the battery required. Most solar batteries have a lifespan of 10 to 15 years, so they will eventually need to be replaced. The price for a new solar battery typically ranges from £1,000 to £5,000, although advanced or larger capacity models may cost more.
The replacement cost of a solar inverter can vary, typically ranging between £900 and £1,500. Solar inverters typically need to be replaced every 10 to 12 years, depending on the brand and conditions of usage.
Although it’s unlikely, panel repairs could be necessary for a few reasons.
Extreme weather, such as heavy hailstones or high winds causing tree branches to fall, is the main reason for repairs. Should these events occur, your product warranty should protect your investment.
When assessing solar panel costs, it is crucial to understand the warranties offered by manufacturers and installers, as these warranties protect your investment and minimise any further outlay.
Battery warranty: if your system includes a battery, you can expect a warranty of around 10 years, providing assurance against performance and reliability issues
Depending on your property and household’s electricity needs, installing solar panels can cost between £8,500 and £9,100. However, over their lifetime, they can save you thousands of pounds through energy savings and SEG incentives, typically paying for themselves within 10 years.
Our methodology for calculating the costs and savings associated with solar panel systems is designed to be transparent and comprehensive. Here’s a step-by-step breakdown of how we derived our figures using data from the Energy Saving Trust (EST)2, the MCS3, Ofgem4 and the Met Office5.
Energy Saving Trust (EST)
Microgeneration Certification Scheme (MCS)
Ofgem
Met Office
Base system cost
Battery addition
Initial investment
Annual savings and earnings
Break-even point calculation
Energy savings over time
Maintenance and replacement costs
Cross-referencing with Ofgem data
Real-world data integration
[1] https://assets.publishing.service.gov.uk/media/6655a939d470e3279dd3328b/Solar_photovoltaics_deployment_April_2024.xlsx
[2] Energy Savings Trust, Figures accurate as of April 2024
[3] MCS, Figures accurate as of April 2024
[4] Ofgem, Figures accurate as of April 2024
[5] Met Office, Figures accurate as of March 2024
Solar panels are a costly investment, so look for cost-effective panels with good power output, and seek out quotes from multiple providers to compare installation costs.
Buying solar panels can significantly reduce the cost of charging electric cars by providing a renewable energy source, lowering electricity bills and enhancing the environmental benefits of electric vehicle ownership.
As part of the government’s Spring Statement 2022, homeowners will pay 0 per cent VAT on solar panels from April 2022 until March 2027.
According to Admiral Money, solar panels can increase your home’s value by up to 25 per cent, making them a worthwhile investment and an attractive benefit for potential buyers.
Solar panels typically last 25 to 30 years. Their efficiency may gradually decrease during this period, but they can still produce significant energy.
A 5kW solar panel system can easily meet the energy needs of a typical three to four-bedroom UK home, generating around 4,500 kWh per year under ideal conditions This is compared to the average household usage of 3,350 kWh per year. However, actual output may vary based on location, panel orientation and weather.
Yes. In 2024, there are several incentives for installing solar panels, including a 0 per cent VAT rate on solar installations, earnings from the SEG for surplus energy sold back to the grid and government grants, such as the ECO4 grant.
Investing in solar panels may not be worthwhile if financial costs outweigh benefits, especially in areas with heavy shading. Also, if you plan to move soon, the upfront costs may not be recoverable through energy savings. So, evaluate these factors to ensure a worthwhile investment.
