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The full cost of solar panels varies based on a number of factors, including the size, type and number of panels, as well as the location and labour cost to install.
The average cost of solar panels in the UK is around £9,100 for a 3-bedroom house including a battery, but it can range between £3,654 and £18,152 depending on the size of the system you choose. Despite high upfront costs, the potential annual savings of over £1,100 and the fact that panels can pay for themselves in as little as 9 years have led over 1.7 million homes to switch to solar.
Our solar experts explain the factors that influence the overall price of solar panels, how to find deals on the best solar panels and whether you’re eligible for solar panel grants. Our comprehensive guide also looks at the long-term savings and explains how solar panels provide a sustainable, cost-effective solution to increasing energy demands.
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The average home can save £1,190 every year with solar panels!
A typical domestic solar panel system’s output ranges from 4kW to 6kW.
The cost of a solar panel system varies depending on system size, panels used and installation complexity.
The Berlin-based Mercator Research Institute on Global Commons and Climate Change revealed that the cost of solar power has decreased by nearly 90 per cent in the last decade. It’s possible that solar power will become cheaper than using fossil fuels. The falling costs of solar battery storage and other renewable technologies are also likely to encourage more people to consider sustainable energy solutions.
The table below gives the average cost of a solar panel system according to property and system size, showing how much money you could save annually and over 25 years. Please note that these are average prices. Actual costs may vary. Upfront costs differ according to panel efficiency, property specifics and your chosen installer, while potential savings depend on current electricity prices.
| Property size | System size | Number of panels | Estimated costs including battery | Approximate annual savings including SEG payments | Approximate savings after 25 years |
|---|---|---|---|---|---|
| 2 bedrooms | 3kW | 8 | £8,200 | £407 | £10,175 |
| 3 bedrooms | 4.5kW | 12 | £9,100 | £578 | £14,450 |
| 4+ bedrooms | 6kW | 16 | £10,000 | £755 | £18,875 |
Below, we’ve broken down the different elements of a solar panel system, what each part contributes and how much the system costs.
The total cost of a solar panel installation can be broken down into its different components, for example the panels themselves, labour costs, scaffolding, etc. (FMB)
Solar panels usually make up about 33 per cent of the total cost of the project, which averages about £3,000 for a typical 3-bedroom property. The price depends on panel type, efficiency and capacity. More efficient panels are typically costlier but can produce more electricity from the same amount of sunlight. This means you might need fewer panels overall.
There are 3 main types of solar panel cells commonly used in residential and commercial applications: monocrystalline, polycrystalline and thin-film.
Monocrystalline solar panels, the most efficient type available at around 15–20 per cent efficiency, consist of single-crystal silicon. They’re more space-efficient and have a longer lifespan than other types of panels, but they tend to be the most expensive.
Polycrystalline solar panels contain silicon crystals that are melted together. They’re usually cheaper but have slightly lower efficiency rates, typically between 13 and 16 per cent. The difference in efficiency means they might require more space than monocrystalline panels for the same electrical output, however.
| Type of panel | Efficiency | Average price per watt |
|---|---|---|
| Monocrystalline | 15–20% | £1–£1.50 |
| Polycrystalline | 13–16% | £0.90–£1.00 |
Solar panels use kilowatts for measurement, and a 3-bedroom home in the UK needs, on average, a 4.5kW system to cover its energy needs. If monocrystalline panels cost around £1 per watt, a 4.5kW solar panel system will cost around £4,500 (not including mounts, inverters, labour and other elements).
Thin-film solar panels are a much less common type of solar panel and are the least efficient of the 3 major types, at around 10–13 per cent. Although they’re lightweight and flexible, their reduced efficiency means they need more space for the same output as more efficient panels. This makes them less suitable for residential applications.
While your installer will usually determine the system size necessary for your property and energy requirements, choosing the right size for your solar panel system is crucial to ensure you’re not paying for a system more powerful than you need. To avoid this, make sure to consider the points below.
The quality and efficiency of the solar panels can significantly influence system cost. Higher-quality panels can be more efficient, converting more sunlight into electricity, but they also come at a premium.
Choosing a budget solar panel shouldn’t impact the efficiency of the solar panel system for most households. Cheaper options can be just as effective as more expensive panels. However, in areas with very little sunlight or daylight, frequent inclement weather – such as high winds that can affect the panels’ resistance – or if your roof is shaded most of the time, you may need to purchase panels that offer additional features or a higher power output.
How many solar panels you need depends on each panel’s power output in watts. If an average solar panel is around 450W, you will need 10 solar panels for a 4.5kW system.
A solar inverter typically comprises 10–20 per cent of the total installation cost. The price of an inverter ranges from £900 to £1,800 for a 3-bedroom home. Residential solar systems use 2 main types of inverters: string inverters and micro-inverters. Micro-inverters are more expensive, but they can increase your system’s efficiency, especially if you have a partially shaded roof. Inverters have a typical lifespan of around 10 years.
Solar batteries are an optional part of a solar system, but using them to generate your own solar energy can help you save more money. If you opt for solar batteries, this will make up about 22 per cent of the system’s expense, as they tend to cost upwards of around £2,000. Some installers believe that, along with storing excess solar energy to use at another time, a battery will increase your energy savings by up to 90%. With a battery, you can also sell surplus energy back to the national grid via the Smart Export Guarantee (SEG) – more on this below.
Installation and mounting costs (meaning the mounting system needed for the panels and the scaffolding that will surround the site) can vary widely, but as a guideline, they account for around 10–20 per cent of the overall system cost. Variables that might affect these costs include a challenging roof layout, unavoidable structural upgrades to support the panels or the removal and replacement of roofing materials.
While it is possible to DIY your own solar panel system, we don’t recommend it. Experienced labourers and installers can ensure the system is set up correctly and can also mitigate risks to security and safety. Other disadvantages of self-installation include not benefitting from a manufacturer’s warranty and the fact that only MCS-certified solar panel installations can sell surplus energy back to the national grid.
The price quoted for installing a system usually includes any associated labour costs. Expect to pay between £300 and £500 per person for each day they work on your project, though labour rates can vary in different areas. Options such as solar battery storage, solar monitoring systems or any necessary electrical upgrades can also add to the final cost.Maintenance costs for a solar panel system include replacing the inverter and the battery at the end of their lifespan (around 10-15 years for an inverter and 5-15 years for a battery).
Most solar panel manufacturers offer a performance guarantee that the panels will produce at least 80–90 per cent of their rated power after 25 years. Workmanship warranties, provided by many installers, typically last 10 years and cover any defects or problems with the installation.
In the interest of promoting renewable energy, the UK Government has made several solar panel grants available to eligible households who wish to improve their property’s energy rating and reduce energy bills. Different levels of funding are available – for example, the Energy Company Obligation scheme offers free solar panels to qualifying households.
Solar panel subscriptions help customers avoid the large upfront cost of a solar panel system by assessing a monthly fee to cover the warranty and maintenance costs of the panels. Typically, the installer ‘owns’ the panels and you buy the solar-generated electricity from them at a reduced rate compared to traditional energy costs. Depending on the plan, you may own the panels at the end of the term.
In the UK, a standard 20 per cent value-added tax (VAT) is normally charged on goods and services. However, as part of the Government’s 2022 Spring Statement, homeowners pay 0 per cent VAT on energy-efficient systems such as solar panels until 2027. This includes residential properties in England, Scotland and Wales. Households in Northern Ireland still have to pay 20 per cent VAT, although meeting certain eligibility criteria reduces this to 5 per cent.
Depending on your system’s efficiency and energy consumption, solar panels can reduce or even eliminate your electricity bills. Once you pay for the system, solar-generated electricity is free and can save you up to £1,100 a year with a 4.5kW system.
The Smart Export Guarantee also allows you to sell any surplus energy your panels generate back to the national grid. Your total savings could be as much as £27,500 over 25 years.
Your savings depends on several factors, including your household electricity consumption, your solar panels’ efficiency and whether you take advantage of SEG payments.
Someone who is home all day will inevitably use more electricity than a person who is at the office for 8 hours every day. Our experts have used a typical mid-century 3-bedroom property with a 4.5kW solar panel system to show the potential savings available. Keep in mind that this depends on how long people are at home during the day.
SEG earnings and savings based on time spent at home
| Time spent at home | Annual energy bills savings | Estimated SEG earnings | Total annual savings |
|---|---|---|---|
| Home all day | £381 | £284 | £665 |
| Home for half the day | £300 | £313 | £613 |
| Out of house all day | £243 | £335 | £578 |
There are other factors to consider when making your energy usage as efficient as possible.
The point when the savings from reduced energy costs equal the initial investment, known as the break-even point, can vary greatly. Factors such as current electricity prices, household energy consumption and your system’s initial cost all play a role.
| Property size | Number of panels | Total cost (including installation and battery) | Potential annual energy bill savings | Payback period |
|---|---|---|---|---|
| 1 bedroom | 4 | £6,200 | £377 | 16 years |
| 2 bedrooms | 8 | £8,200 | £750 | 11 years |
| 3 bedrooms | 12 | £9,600 | £968 | 10 years |
| 4 bedrooms | 16 | £12,000 | £1,219 | 8–10 years |
“For electricity and gas, the prices were significantly increasing. The solar panel and battery system was the one I chose. It charges up during the daytime, and excessive kWs go to the national grid. It’s a 75 per cent saving in usage – a straightforward benefit.Since installation, prices for all electricity are down, and hardly anything is used. Even now in mid-February, there are days when we’re not using any [grid] electricity, the battery is charged up to 70 per cent, and it lasts until 10 or 11pm. As the days get longer, the savings are just going to get better, and it’s one of the best things I’ve ever done.”
You can start saving money on your bills immediately by buying solar panels now. Some installers estimate as much as 90 per cent savings if you choose to install a storage battery with your system.
Cornwall Insight predicts that the last quarter of 2024 will see daily electricity standing charges at 60p and the price per kWh at 22.29p. Installing a solar panel system can help you save by reducing your reliance on electricity from the grid. Rising energy prices also mean that solar panel systems will pay for themselves quicker. With a solar battery, this could be in as little as 7–9 years.People considering solar panels may still be hesitant about the cost and ‘hassle’ of installation, despite these incentives. According to a government survey from 2021, 61 per cent of people considering installing solar panels said they’d be more likely to go through with an installation if they thought the process was easier. However, 95 per cent of respondents who had already installed solar panels reported an easy and hassle-free process, proving that the installation experience is far simpler than people think.
Solar panel installations are a considerable investment, so compare various quotes to get the best value for your money. Prices can vary significantly among providers, but below are some things to look out for.
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With so many solar panel providers, it can be difficult to determine which one is right for you, let alone who offers the cheapest panels. A good provider will offer a range of panels to suit different budgets, power outputs and unique features. In our research into the best solar panels, we found that JA Solar provided the cheapest solar panels when looking at cost per panel.
If you’re planning to move home within the next 10 years, it’s probably not worth investing in solar panels. Although the investment can definitely increase the value of your home later on, if you move before the panels have paid for themselves, you’ll still run the risk of not breaking even on your solar panel system.
To assess the various costs of installing a solar panel system accurately, we used several reputable sources to assess the different components of a solar installation. These include the Energy Saving Trust (EST), Ofgem and the Microgeneration Certificate Scheme. We did our own market research, and our team is constantly speaking to industry experts to understand any changes in products and/or pricing.
1. Cost of a solar system
We based our calculations on the average price of a standard solar panel system according to the EST. This price includes the cost of the panels, installation and basic hardware. It doesn’t include a battery. We spoke to solar companies and installers to understand how much a battery would affect these prices.
2. System requirements and solar energy production
Your house size, annual energy consumption and other factors, such as your roof’s shade level and where you live in the UK, will determine which elements of a solar panel system your property requires. We used EST data to determine the cost of various solar system sizes. We used those to calculate potential savings, depending on your energy consumption. We verified this data against other sources and with trusted solar panel providers.
3. SEG payments and breakeven points
We incorporated Ofgem data on SEG payments and savings into our calculations to give a clear picture of what panel owners could save and what the break-even point of their solar system would likely be if they used the scheme.
We also used data from Ofgem to predict how energy rates may change in the future. This helps show how the break-even point of solar panels changes depending on the current energy rate.
We cross-referenced our research against the MCS’s data, which references solar panel system installation across the UK and the average costs of installations over time. We combined this data with our market research and conversations with solar companies and installers. It’s worth noting that MCS data only relates to MCS-certified installations and doesn’t account for the price of a battery or any other additional costs.
Finding the cheapest price for solar panels involves research, comparison and consideration of various factors.
Finding the best price for solar panels requires some research. Once you understand the factors you need to prioritise, request quotes from reputable suppliers and installers. Consider the system’s efficiency, longevity and potential savings over time when comparing quotes, as a cheaper system might not be the most cost-effective in the long run.
Read reviews and seek recommendations to ensure you’re getting a quality product and service for the price. Search out any government grants or other incentives, as these can significantly reduce costs.
Solar panels usually fall under building insurance, as they’re an integral part of your home’s structure. It’s essential to have adequate insurance to cover any potential replacement costs. If you’re unsure, check with your provider.
Solar panels should have a manufacturer’s warranty. If you spot an issue, it’s best to contact the installation company before approaching your insurance provider.
Solar panels don’t restrict your ability to change energy providers, but before committing to a supplier, you should still investigate which suppliers offer the best SEG rates for purchasing the surplus electricity you produce.
Your energy supplier can differ from your SEG company. Some companies, such as Octopus, offer better rates for exporting energy if they’re also your primary energy supplier. Contemporary SMETS 2 smart meters can accommodate 2 companies, eliminating the need for a separate meter installation.
The length of the installation process differs among providers and depends on the number of panels and the complexity of the installation. However, the actual installation of your solar panel system could take as little as 1–3 days, after which there will be a process of inspection, connecting to the national grid and getting everything up and running.
Yes, solar panels are worth it for many homeowners. They contribute to reducing your electricity bills and your carbon footprint; in some cases, they can also increase your property’s value. Incentives such as the SEG scheme and 0% VAT on installations until 2027 are attractive financial benefits, making solar panels a more cost-effective investment.
