Solar panel costs in the UK

Solar panels cost in the UK around £7,000 for an average three-bedroom home, £9,000 including a battery. For those considering switching to solar energy, the potential savings of £917 each year – which can amount to over £27,000 across the panels’ 30-year average lifespan – is one of the most appealing factors of installing a solar panel system. But the upfront cost of solar panels is still a large investment.

This comprehensive guide explains the various factors that influence the overall price of solar panels, how to find deals on the best solar panels, and whether you’re eligible for a solar panel grant. Our experts also examine the long-term savings and the potential for solar energy to provide a sustainable, cost-effective solution for rising energy demands.

On average, a typical domestic solar panel system’s output ranges from 4kW to 6kW.

• A 4.5kW solar panel system, suitable for a medium-sized family home, costs £7,100 without a battery.
• A 6kW installation, without a battery, costs around £8,000. 

The cost of solar panels varies depending on the size of the system, the type of panels used, and the complexity of the installation. 

New research reveals that the cost of solar power has decreased by nearly 90% in the past decade, pushing it closer to a critical threshold where it becomes more economically feasible than power generated from fossil fuels. 

The Berlin-based Mercator Research Institute on Global Commons and Climate Change (MCC) has calculated an 87% reduction in the cost of electricity generated from solar panels since 2013, indicating that the shift towards renewable energy sources is more affordable than previously anticipated. 

Additionally, the decreasing costs of solar batteries and other renewable technologies are likely to further accelerate the move towards sustainable energy solutions and the achievement of climate goals.

Let’s break down the different components to understand the solar panel costs more clearly.

Solar panels

The panels usually make up about 25% to 30% of the cost – between £2,250 and £2,700 – for a typical three-bedroom property. The price depends on the type of panels chosen, their efficiency and capacity. More efficient panels are generally more expensive but can produce more electricity from the same amount of sunlight.

There are primarily three types of solar panels commonly used in residential and commercial applications, each with its unique characteristics and efficiency levels. 

Monocrystalline solar panels are made from single-crystal silicon, making them the most efficient type of solar panels available. They are easily recognisable by their uniform, dark look and rounded edges. The purity of the silicon used allows these panels to have the highest efficiency rates, typically between 15–20%. Monocrystalline panels are more space-efficient and have a longer lifespan, but they tend to be the most expensive option due to the higher manufacturing costs.

Polycrystalline solar panels are made from silicon crystals that are melted together. These panels have a speckled blue hue and do not have the rounded edges seen in monocrystalline panels. While they have slightly lower efficiency rates than monocrystalline panels, typically between 13–16%, polycrystalline panels are more cost-effective to produce and usually cheaper to buy. The efficiency difference means they might require more space than monocrystalline panels for the same electrical output.

Thin-film solar panels are constructed by depositing one or more thin layers of photovoltaic material onto a substrate. These panels can be made from various materials, including cadmium telluride, amorphous silicon, and copper indium gallium selenide. Thin-film panels have the lowest efficiency rates of the three, typically around 10–13%, but they are lightweight, flexible, and can be manufactured in large sheets. They are less affected by high temperatures and shading compared to mono and poly panels. However, their lower efficiency means they require more space, making them less suitable for residential applications where space might be limited.

The quality and efficiency of the solar panels can also greatly influence the cost. Higher-quality panels often have better efficiency, converting more of the sunlight they absorb into electricity. These typically cost more than less efficient models.

Inverter 

A solar inverter typically accounts for between 10% and 20% of the total cost. For a three-bedroom home, this ranges from £900 to £1,800. There are two main types: string inverters and micro-inverters. Micro-inverters are more expensive but can increase the system’s efficiency, especially if part of your roof is shaded. Typically, inverters have a lifespan of around 10 years.

Installation and mounting hardware

Depending on the complexity of the installation, the costs can vary. Factors that might increase prices include a challenging roof layout, the need for structural upgrades to support the panels or the removal and replacement of roofing materials. Typically, installation costs make up around 20% of the price you’ll pay for a solar panel system, which works out at £1,400 for a three-bedroom house.

Labour costs

The price quoted for installing a system usually includes any associated labour costs. Labourers typically charge different rates depending on their area, but expect to pay between £300 and £500 per person for each day they work on your project.

Additional costs

Extra items such as solar battery storage, solar monitoring systems, or any necessary upgrades to your property’s electrical system, can also add to the final cost.

This table shows the average cost of a solar system, breaking it down into property and system size, and how much money you can save annually and over 25 years. However, it’s important to note that these are average prices, and the actual costs can vary. Prices fluctuate based on the panels’ efficiency, the specifics of your property, and the chosen installer, while potential savings depend on the most recent electricity prices.

Discover how much solar panels would cost for your home by answering a few quick questions

When you receive a quote for a solar system, it generally includes labour costs, but as a rough guide, the prices can range from £300–£500 per day per installer. The time taken to install a system typically depends on its size and the accessibility of the roof. 

A small 3kW system can take a day to install, provided the roof access is straightforward, one that’s 4–5kW might take three to four days, while installing a sizable 6kW system could take a two-person team five days or more. 

Most solar panel manufacturers offer a performance guarantee that the panels will produce at least 80-90% of their rated power after 25 years. Many installers also provide a workmanship warranty, which typically lasts 10 years and covers any defects or problems with the installation.

With the recent rises in energy prices, the amount of money you can save by installing solar panels in the UK is at an all-time high. This means that the time it takes for panels to pay for themselves is shorter than ever before. The average system will pay for itself in 7 to 9 years, based on the savings to energy bills and by selling unused electricity back to the National Grid.

Read our guide to find out more about how solar panels pay for themselves.

Solar panels can reduce or even eliminate your electricity bills, depending on the efficiency of your system and how you manage your electricity usage. Your solar-generated electricity is free and can save you up to £917 a year. 

The Smart Export Guarantee (SEG) also allows you to sell any surplus energy your panels generate back to the National Grid. This means that over 25 years, your total savings could be as much as £22,925 or more. 

How much you can save depends on several factors, including your solar panel efficiency, whether you take advantage of SEG payments and your household electricity consumption. 

If you are at home all day, you’ll inevitably use more electricity than someone out at the office for eight hours a day. Our experts have used a typical mid-century three-bedroom property with a 4kW solar panel system to show the potential savings depending on how long the house is occupied during the day. 

However, there are a couple of additional things to consider, which can make your energy usage as efficient as possible.

When buying new appliances, such as a dishwasher or washing machine, check the energy labels and choose models that are as energy efficient as possible. By running them during the day, you can use the free energy generated by your panels, and timer switches can be used if you’re at work or out of the house. It also makes sense to wait until appliances like dishwashers or washing machines are full before running them.

Many electronics draw power even when turned off, a phenomenon known as “phantom load” or “vampire power.” Remember to unplug electronics when they’re not in use or employ power strips that you can switch off. 

The break-even point for solar panels – when the savings from reduced energy costs equal the initial investment – can vary greatly. Factors such as the initial cost of your system, household energy consumption, and current electricity prices all play a role. A solar panel system can potentially break even in six or seven years.  

Earn through SEG 

Under SEG, a licensed energy company is required to offer an export tariff to small-scale low-carbon generators for the electricity they export to the grid. This includes homeowners with solar panels.

• Payment for exported electricity: Energy suppliers must provide payment for each kilowatt-hour (kWh) of electricity exported to the grid.
• Variable tariffs: Suppliers can offer various types of tariffs, including ones that vary by time of day, reflecting that the value of exported electricity to the grid can change depending on when it is exported.
• Installer certification: Your system must be installed by a certified Microgeneration Certification Scheme (MCS) installer.
• Metering requirements: To be eligible for the SEG, you must have a meter in place that can measure exports.

0% VAT scheme

In the UK, Value Added Tax (VAT) is normally charged on goods and services, with a standard rate of 20%. However, as part of the government’s 2022 Spring Statement, it was announced that homeowners could enjoy 0% VAT on energy-efficient systems, such as solar panels, until 2027. This applies to residential properties in England, Scotland, and Wales. Homes in Northern Ireland still have to pay 20% VAT, although this drops to 5% if certain eligibility criteria are met. 

Solar panel grants

In its drive to promote renewable energy, the UK government has made several solar panel grants available to eligible households, aiming to improve the property’s energy rating and reduce bills. These grants provide differing levels of funding – the ECO4 scheme, for example, offers free solar panels to those that qualify.

Compare quotes

Solar panel installations can be a significant investment, so comparing quotes ensures you get the best value for your money. Prices can vary significantly between providers due to several factors.

• Solar panel quality: Different providers may offer various types and brands of solar panels and inverters, and receiving several quotes allows you to evaluate the efficiency, durability, and warranty of the equipment from the available suppliers, ensuring you choose the best quality within your budget.
• Installation expertise: Solar panel installers have varying levels of experience and expertise. Comparing quotes can give insights into their track record, expertise, and the quality of their past installations. This is crucial for ensuring a safe and efficient solar panel system.
• Financial options and incentives: Solar companies often offer finance options or rebates, and comparing these aspects can help you find the most financially advantageous deal.
• Post-installation services: Maintenance, warranty, and customer service vary between providers. Assessing different quotes helps you understand what kind of service and support you can expect after installation.

Get the right system for your energy needs

Choosing the right size for your solar panel system is crucial to ensure you’re not overpaying for a system more powerful than you need.

• Energy consumption: Review your electricity bills to understand your household’s average energy usage. This gives you a baseline for the amount of energy you need to generate.
• Future energy needs: Consider any future changes, such as family size or adding an electric vehicle, which might increase your energy consumption.
• Sunlight exposure: The amount of sunlight your location receives impacts the efficiency of solar panels. Homes that enjoy less sunlight may require a larger system to meet the same energy needs as those in sunnier areas.
• Roof space and orientation: Your roof’s available space and orientation will dictate the maximum size of the solar panel system you can install.

Buying solar panels now makes sense, allowing you to start saving money on your bills immediately. According to some installers, this could be as much as 90% if you choose to install a storage battery with your system. 

Cornwall Insight is predicting that the last quarter of 2024 will see the daily electricity standing charges being £0.60, and the price per kW/h as 22.29p. Installing a solar system means you’ll be using far less grid-generated electricity, avoiding much of these costs.