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Switching to a cleaner energy option such as solar panels is rapidly becoming a common option for UK homeowners, with more households generating their own electricity.
In this guide, our experts help you start your solar journey, explaining everything from solar panel installation costs to break-even points and how much you can save, enabling you to harness the sun without casting a shadow on your finances.
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The average three-bedroom home requires a 4.5kW solar panel system, which typically consists of around 12 panels and will cost you about £9,100 with a battery. You can expect to pay between £100 and £500 per panel, but it’s worth noting that your choice of panel type will affect the final price, as factors such as increased solar power efficiency generally bring the cost of solar panels up.
Other factors that can affect the cost of solar panels are solar inverters and solar batteries. While the inverter should be included in your solar quote because it is an integral part of a solar panel system, batteries are optional, so if you want to add one, your total cost – and therefore your break-even point – will increase.
A solar inverter costs between £900 and £1,800. An inverter converts solar electricity into usable electricity. It will usually be included in your solar panel quote if this is your first set of solar panels as you need one to use the energy generated in your home. Solar inverters last between 10 and 12 years, which means you will need to replace them before your solar panels reach the end of their lifespan.
A typical solar battery costs between £1,500 and £4,000. You might want to install a solar battery in addition to your solar panel system as it allows you to store and use excess electricity generated by your panels.
The initial cost of installing a solar panel system might be off-putting for some, but the average cost of solar panels for homes in the UK is continuing to decrease due to higher demand and the UK government’s introduction of a zero rate VAT for energy-saving materials.
The cost of solar panels in the UK also varies depending on the number of panels needed and which brand you choose. It’s a good idea to know the average cost of a solar PV system before researching various solar brands. That way, you’ll know if the panels you find are good value for money.
When assessing solar panel costs, homeowners should consider their specifications, such as power output, product warranty and efficiency rating. They should also take into account the amount of roof space they have available to install solar PV panels, as a smaller roof might require more efficient – and more expensive – panels to provide the amount of electricity needed to power their house.
Step 1: Although smart meters provide accurate figures, the average UK household uses between 8 and 10 kWh of energy per day. However, to calculate your typical daily electricity usage, divide the total kWh number shown on your energy bill by the number of days it covers. Repeat this across several bills to get an average estimate.
Step 2: Decide how much of your electricity consumption you want your panels to produce. Generally, the more power your system generates, the higher the initial cost. However, with more energy generated by solar, your bills will be lower.
Step 3: Determine the power output rating of your chosen solar panels. This will typically range from 200W to 450W for most residential panels.
Step 4: Multiply the panel’s output by 4.19 (the average hours of sun in the UK). Multiply this number by 0.75 to account for the fact solar panels won’t always work at 100 per cent of their efficiency rating. This gives you the amount of energy your panel will produce.
Step 5: Finally, divide your daily energy use by the kWs your system can generate, and that’s how many panels you need.
There are a few factors that affect solar panel pricing, and homeowners should consider the following aspects before installation.
Your home’s size and your household’s electricity usage dictate the size of your solar system. Generally, larger homes need bigger systems, resulting in higher costs. Remember, the total UK solar panels cost includes an inverter, essential for converting the panels’ direct current (DC) into usable alternating current (AC) electricity.
Typically, labour costs are included in your solar panel quote, which means this isn’t something you’d need to worry about arranging separately. However, it is a good idea to know how much these solar panel installation costs are and what factors may lead to an increase before you commit to an installation date.
Solar panel labour costs are between £300 and £500 per person working per day, and it takes between one and two days to install an average system size of 4kW.
Installing a solar panel system usually requires two people, so you can expect your labour costs to fall somewhere between £600 and £1,200.
One thing to bear in mind is you need to make sure your installer holds accreditation from the Microgeneration Certification Scheme (MCS), a quality assurance scheme supported by the UK government. Having this accreditation is essential to qualify for the Smart Export Guarantee (SEG) scheme (which replaced the former Feed-in Tariff), with which you can sell unused electricity back to the National Grid and receive an export tariff from your energy supplier. This, in addition to lower electricity bills, will help pay off your initial investment.
There are several types of solar panels; below are the main ones adopted by UK households.
Monocrystalline panels: monocrystalline cells generate the most electricity per square metre, making them a good choice if you have limited roof space. However, they have the highest price point, around £1 per watt.
Polycrystalline panels: polycrystalline panels are a more affordable option, and although they’re not as efficient as monocrystalline panels, they can still achieve a good power output. Polycrystalline panels are the most commonly installed panels in the UK and cost around £0.90 per watt.
Thin-film panels: the least expensive option is thin-film panels. Homeowners should be wary, though, as they have an efficiency of between 7 and 18 per cent – ideally, a panel should have 20 per cent efficiency or higher to make the most of the space available to install them. The cost for thin-film solar panels is around £0.80 per watt.
Whichever type of panel you choose, its outlay should be balanced with the return on investment.
4. Additional components
Solar inverters
Solar inverters cost between £900 and £1,800 and although they are usually included in the initial solar panel costs, they need replacing every 10 to 12 years This means that at some point in your solar panels’ 20- to 30-year lifespan, you’ll need to purchase a new inverter.
A solar panel inverter works by generating direct current (DC) electricity, which is generated by a solar panel, to alternating current (AC) electricity, which is the type of electricity used for electrical currents and appliances.
In addition to solar panels, you may want to consider adding a solar battery. Solar batteries store excess energy from your solar panels, which can then be used to power your home at times of the day when your panels aren’t generating electricity, for example, at night.
A solar battery can cost between £1,000 and £5,000. However, you can expect to pay around £2,000 for a solar battery storage system to suit a typical three bedroom property.
The cost is affected by the size of the storage system.
| 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 |
| Number of solar panels | Approximate annual energy bill saving | SEG payment | Approximate total annual savings |
|---|---|---|---|
| 4 | £117 | £90 | £207 |
| 12 | £203 | £333 | £536 |
| 16 | £251 | £452 | £703 |
| 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 |
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 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.”
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
Although the average costs of a solar panel installation were falling prior to 2021, thanks to increased panel efficiency cutting the number needed to produce a household’s energy and high market competition, 2022 saw the price of solar panels climbing. Prices for 0-4kW systems reached around £2,570 per watt in March 2023 – a 26 per cent increase on the previous year’s prices – before starting to fall later in the year.
Renewable energy experts, including Climate Energy Finance (CEF), predict that this downward trend will continue throughout 2024, dropping by 40 per cent by the end of the year.
Now is the best time to buy solar panels. Currently, the average cost of a solar panel system, including a battery, is around £9,000 and homeowners can benefit from the 0 per cent VAT rate on solar installations until 2027.
A typical three-bedroom house with a 4.5kW system could save up to £871 per year, based on current energy prices. With energy prices remaining high, on average homeowners can expect to break even in eight years.
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.
The break-even point refers to the time it takes for the savings from your reduced electricity bills, plus any SEG payments received, to surpass the initial investment cost of the solar panels. This critical figure indicates when you start seeing a tangible return on your investment.
Solar panels typically break even in between eight and 12 years, but this varies based on the system size, SEG payments, current electricity prices, and how you use your electricity, so our estimate should only be used as a rough guide.
According to our research, 90 per cent of homeowners include a solar storage battery with their system. This can reduce the break-even point as it allows you to store your free home-generated electricity to use whenever you need it – overnight, for example, lessening your reliance on grid-supplied energy and saving you money.
While this means you’ll have less to sell through the SEG scheme, due to the SEG payments being far smaller than you pay per kW for supplied energy, it makes more sense to replace the expensive grid electricity with your free supply.
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 if the average annual energy bill were to decrease or increase by 30 per cent.
| If average bill drops by 30%* | Savings based on the 1 April 2024 price cap | If average bill increases 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 |
The best solar panels could save you hundreds of pounds annually, and you can also sell excess electricity generated from your solar panels back to the National Grid through the SEG.
Exactly how much your household could save with solar panels depends on:
It’s estimated you’ll save more if you spend more time at home. You’re advised to use electrical appliances such as the dishwasher, washing machine and iron when your panels are generating electricity – this means you can 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 | 3kW | 12 | £9,100 | £871 | £21,775 |
| Four bedrooms | 5kW | 16 | £12,000 | £1,099 | £27,475 |
These figures are based on a three-bedroom house in an East Midlands postcode, with a 4.5kW solar system and no battery. We used our solar calculator to determine how much you could save depending on how much time you spend at home.
Home all day:
Out all day until 6pm:
Home for half the day:
The SEG scheme is designed to ensure homeowners are paid for surplus energy that their panels generate and export it to the National Grid. Energy suppliers with 150,000 or more customers must supply at least one SEG tariff to customers in England, Scotland and Wales – some tariffs are better priced per kW than others, so it’s advisable that you shop around before deciding on the best tariff.
Some tariffs offer better rates than others and you’ll also need to decide between fixed and variable tariffs:
To sign up for any of the energy tariffs in the table below you don’t need to be an existing customer and you also do not need to make the switch in order to opt into their SEG tariff. However, existing customers tend to get offered better rates, so bear this in mind.
SEG tariff rates, with prices updated as of March 2024.
| Supplier | SEG tariff | Rate (p/kWh) | Variable/fixed |
|---|---|---|---|
| Octopus Energy (own customers) | Intelligent Octopus Flux | Average 27.1 to 36.1 | Variable |
| Octopus Energy (own customers) | Octopus Flux | Average 24 | Variable |
| OVO Energy (own customers with battery) | OVO SEG tariff | 20 | Fixed for 12 months |
| So Energy (panels and battery installed by company) | So Export Flex | 20 | Variable |
| E.on Next (own customers | Next Export Exclusive | 16.5 | Fixed for 12 months |
| OVO Energy (own customers with solar panels only) | OVO SEG tariff | 15 | Fixed for 12 months |
| British Gas (own customers) | Export & Earn Plus | 15 | Variable |
| Octopus (own customers) | Outgoing fixed | 15 | Fixed for 12 months |
| Scottish Power (customers whose panels were installed by the company) | Smart Gen+ | 15 | Variable |
| Scottish Power (customers whose panels were installed by another company) | Smart Gen | 12 | Variable |
| So Energy | So Export Flex | 7.5 | Variable |
| British Gas (non-customers) | Export & Earn Flex | 6.4 | Variable |
| EDF (own customers) | Export Variable Value | 5.6 | Variable |
| Utility Warehouse (own customers) | UW SEG tariff | 5.6 | Variable |
| Pozitive Energy | SEG tariff | 5 | Variable |
| Octopus (non-customers) | Outgoing Go | 4.1 | Fixed for 12 months |
| OVO Energy (non-customers) | OVO SEG tariff | 4 | Fixed for 12 months |
| EDF (non-customers) | Export Variable | 3 | Variable |
| E.on Next (non-customers) | Next Export | 3 | Fixed for 12 months |
| SSE (existing customer) | Smart Export tariff | 3.5 | Variable |
| Shell Energy | SEG V1.1 tariff | 3.5 | Variable |
| Utilita | SEG tariff | 3 | Variable |
| Utility Warehouse (non-customers) | UW SEG tariff | 2 | Variable |
| E | SEG January2020v.1 | 1 | Variable |
Although the benefits in the long run far outweigh the negatives of installing solar panels, the initial cost can be a tough hurdle to overcome. There are a few government solar panel grants on hand to help mitigate some of the associated costs.
Through the UK government scheme Energy Company Obligation (ECO4), managed by Ofgem, homeowners receiving tested means benefits could be eligible to save money on the cost of solar panels. Those who are not receiving tested means benefits, but are still living in fuel poverty, might be eligible to save money through the LA Flex (Local Authority Flexible Eligibility), an extension of the ECO4.
These additional components can help save you money on your solar panels investments over time.
Transitioning to solar energy has become more accessible thanks to various payment options catering to different financial situations. Gone are the days when the only route to solar installation was through a significant upfront payment.
Many solar providers offer specific financing options that enable you to spread the cost of solar panels over several years. This can significantly reduce the immediate financial burden, making solar energy accessible to a wider audience. These plans may come with fixed or variable interest rates, depending on the provider and the terms of the agreement.
A loan is a popular option if you want to spread the cost of solar panels over time. Various financial institutions offer green loans designed for eco-friendly investments like solar panels. These loans typically come with competitive interest rates and flexible repayment terms, allowing you to manage payments according to your budget.
A solar panel subscription plan is a relatively new concept that offers a flexible approach to solar energy. The provider installs solar panels on your property for a monthly subscription fee, and you benefit from the electricity they generate. This model often includes maintenance and repairs as part of the subscription, removing the worry about additional costs.
A green mortgage might be an option if you plan on making substantial eco-friendly home improvements, including solar panel installations. These mortgages often provide additional borrowing capacity for energy efficient investments, recognising the value they add to a property.
They’re using solar for both – the lower energy bills and additional income from selling back to the National Grid mean that solar panels make a difference to households’ financial status.
Also, with the government pushing electric vehicles, more people will invest in home charging ports, which can use solar-generated energy. This eliminates vehicle fuel bills.
The upfront costs of solar panels are something that’s widely available with a small amount of research – it’s the hidden costs beyond the solar installation that are rarely spoken of.
Fortunately, solar panels have few hidden costs outside the initial investment.
When installed correctly, solar panels are made to last 25 years or more. Thanks to their simple construction and the fact they have no moving parts, for the most part, they are relatively low maintenance.
However, throughout your panels’ lifespan, you should carry out annual maintenances. By doing so, you’ll maximise their lifespan and ensure you’re getting the most power out of them.
Essential maintenance:
It’s highly unlikely you’ll require repairs or replacements, although there are a few reasons why this could happen.
The main reason is extreme weather such as hailstones or fallen trees. Another reason could be that the panel was defective at the time of installation.
No matter the reason for repairs or replacements, most solar panels come with a product warranty, and some even offer lifetime guarantees. You would need to check with your solar manufacturer or provider for the terms and conditions of replacement in the event of accidental damage or defective goods.
Solar panels can be a costly investment, so it’s always good to look for affordable options and compare prices. There are also different types of solar panels – monocrystalline, polycrystalline and thin-film solar panels – with the latter being the most affordable but least efficient type of panel. It’s best not to look for the cheapest panels, but ones that still retain good power output for a cost-effective price – you should compare products and request free quotes from three or more providers to compare installation costs.
From April 2022 until March 2027, homeowners will pay 0 per cent VAT on solar panels, as part of the government’s Spring Statement 2022.
According to Admiral Money, solar panels can increase the value of your home by up to 25 per cent, and many homeowners looking to buy a new property consider them a worthwhile investment. Considering that installing solar panels will cost thousands of pounds if you decide to sell your property, a solar array would be an attractive benefit for the potential buyer.
Solar panels have an average lifespan of 25 years. Although the initial cost of solar panels can seem expensive, you’ll reap the benefits for more than two decades. As well as this, solar panels have an average payback time of seven years. Once you break even, your solar panels can earn you money if you sell your surplus energy back to the National Grid through SEG payments.
A 5kW solar panel system can contribute significantly to the energy needs of a typical three to four-bedroom home in the UK.
The average household in the UK uses about 3,800 kWh of electricity per year. A 5kW solar system, under ideal conditions, can generate approximately 4,500 kWh per year. However, the actual energy generation can be lower due to various factors, such as location, panel orientation, and weather conditions.
There are several incentives available for installing solar panels, part of the UK’s efforts to encourage the adoption of renewable energy and improve energy efficiency in homes. They help in reducing the initial cost of solar panel installation and make solar power a more viable option for a broader range of households. Incentives include Ofgem’s ECO4 scheme, providing free solar panels to eligible homes.
