For homeowners, the cost of solar panels is often the primary consideration when deciding whether to switch to this clean energy option. While reducing energy bills is undoubtedly tempting – in some cases saving as much as £1,190 annually – the average initial solar panels UK cost for a typical three-bedroomed home is £5,500. However, this does mean that the break-even point is about six to seven years, and with solar panel prices increasing, this period is growing longer.

A monthly average of 17,000 residential properties have installed solar systems in 2023, with over 20,000 in March alone, according to the Microgeneration Certification Scheme (MCS). 

Aside from saving money on household bills, solar panels offer several other benefits, including reducing your carbon emissions by up to 1.2 tonnes annually, cutting your reliance on fluctuating energy prices, and adding up to 25% to your property’s value, according to Admiral Money. 

Our experts help you find the best solar panels in this comprehensive guide, covering panel types, installation costs, solar systems and home insurance, and how to get the best deals for you. 

How much do solar panels cost in the UK?

The cost of solar panels in the UK had fallen substantially, driven by technological advancements and increased market competition; however, 2022 saw prices beginning to increase compared to 2021.

The latest government data shows that the average cost of a domestic solar installation has risen by 26% in 2022/2023. While prices have fluctuated within that period, the costs in March averaged £2,570 per kW for 0-4kW systems and 31% for 4-10kW systems. These figures are not adjusted for inflation.

Source: UK Government. (Federation of Master Builders)

How much will solar panels cost me?

For a 4kW system (the average size for most homes), the price to install solar panels is around £5,500. This figure comprises the panels themselves, the inverter (which converts the electricity generated from direct current (DC) to alternating current (AC)), the mounting hardware, and the installation. Optional extras, such as solar batteries for storage and solar monitoring devices, can also add to the overall cost.

Generally, a larger, more powerful system will have a higher initial cost but produce far greater savings over time. For example, a 3kW system is much cheaper to install than a larger 5 or 6kW system, but the savings will be more significant with the larger option, and there are several reasons for this. 

A more powerful solar system can help meet a higher percentage of your home’s energy needs, reducing the amount of electricity you need to purchase from your utility company. This protects you from rising energy costs and saves you money. It could also allow you to sell a more significant amount back to the National Grid. These can amount to substantial savings when viewed over time. 

Therefore, installing a larger system is often more cost-effective if you have the roof space.

What factors contribute to the cost of a solar panel installation

To understand the solar panel costs more clearly, let’s break down the different components.

  • Solar panels: The panels themselves usually make up about 25% to 30% of the cost – between £1,375 and £1,650 for a typical three-bedroom property. The price depends mainly on their efficiency and capacity. More efficient panels are generally more expensive but can produce more electricity from the same amount of sunlight.
  • Inverter: The inverter typically accounts for 10% and 20% of the total cost. For a three-bedroom home, this ranges from £550 to £1,100. 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: These costs vary based on the specifics of your property and the company you choose for solar panel installation but are around 20% of the price, which works out at £1,100 for a three-bedroom house.
  • Additional costs: Items, such as solar battery storage, solar monitoring systems, or any necessary upgrades to your property’s electrical system, can 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.

Size of propertySystem sizeNumber of panelsRoof spaceEstimated costs inc installationApproximate annual savings on electricity billApproximate savings after 25 years (plus profit from SEG)
1–2 bedrooms3kW panel system1222 m²£5,000£850£21,250
3–4 bedrooms4kW panel system1629 m²£6,000£980£27,150
4–5 bedrooms5kW panel system2032 m²£8,000£1,460£39,550
5–6 bedrooms6kW panel system2443 m²£9,000£1,460£40,325
solar panels on red tile roof

Solar panels can be a large investment, so researching for the best prices will be worth homeowners’ time. (Image credit: Abode)

What are the labour and installation costs?

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 the National Grid.

Read our guide to find our more about how solar panels pay back.

What affects the cost of solar panels in the UK?

Several factors can influence the cost of solar panels, including the solar cell type and the size of the array.

1. Solar panel types

There are two main types of solar panels available for domestic installations.  

Monocrystalline panels are made from a single crystal structure and can be recognised by their black colour and the rounded edges of the cells. They are the most efficient type of panel, meaning they produce the most power per square foot of panel area, which makes them a good choice if you have limited space. However, they are also the most expensive option. 

Polycrystalline panels are bluish in colour and made from multiple crystal structures. They are less efficient than monocrystalline panels, but due to their lower prices, are the most commonly installed panels in the UK. 

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

2. Solar system size

The size of the solar system required for your home is a significant factor affecting the cost. The larger the system, the more panels are necessary, along with the associated ancillary equipment, such as mounting hardware, inverters and batteries, and the increased labour costs. 

3. Installation 

Depending on the complexity of the installation, the cost 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.

4. Labour costs

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

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How much do you save with solar panels?

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 £1,190 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 £40,325 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. 

Time spent at homeAnnual energy bills savingsEstimated SEG earningsTotal annual savings
Home all day£433£113£546
Home in the mornings£318£95£413
Home in the afternoons£287£101£388
Home in the evenings£165£123£288

However, there are a couple of additional things to 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 – timer switches can be used if you’re at work. 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.  

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How to reduce solar panel costs

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 installer.
  • Metering requirements: To be eligible for the SEG, you must have a meter in place that can measure exports.

0% VAT

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, can offer those that qualify free solar panels. 

Compare quotes

Solar panel installations can be a significant investment, so comparing quotes helps ensure 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 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 the 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.

Should I buy solar panels now?

Deciding when to buy solar panels hinges on several factors. The UK government’s commitment to renewable energy and reducing carbon emissions makes this an opportune time, especially with various incentives available, while solar technology advancements have made panels more efficient than ever. 

According to PV Magazine and Solar Power Portal, between October 2020 and October 2022, panel prices increased by over 50% due to pandemic-related supply shortages and a rise in demand. However, in the six months to March 2023, prices fell by 13%, with the downward trend showing no signs of stopping, making now an excellent time to start looking for your solar panel system. 

Frequently asked questions about solar panel costs