How much do solar panels cost?

You may be thinking about alternative sources of power for your home to help with rising energy bills. Here we look at whether installing solar panels is a good investment, how long it will take for a solar-powered system to pay for itself, and how much you could save on your bills.  

The average cost of installing solar panels depends on where you live, the type of panels you want, and the size of the system you’d like to install. As a guide, The Energy Savings Trust says the average domestic solar PV system for a three-bedroom house is 3.5 kilowatts peak (kWp), and costs around £5,500.  

However, the government has removed VAT on the purchase of solar panels until March 2027, which is thought to save the average UK household over £1,000 in total installation costs. 

It’s a good idea to speak to at least three suppliers to get specific quotes for your home.  

As well as the system and installation, there are other costs to budget for, such as a battery to store the electricity you produce, and the construction of scaffolding if it’s needed to gain access to your roof.  

READ MORE: How does solar power work?

Will I still have to pay for electricity if I install solar panels? 

Yes, you’ll need to buy electricity for use on the days and evenings when your solar panels aren’t getting enough sunlight to produce the energy you need. You can store some electricity in a battery, but this won’t be enough to power your whole home.  

How much can I save by having solar panels? 

The more you’re home, the more you’ll save. The Energy Saving Trust estimates that home-owners in London who sell electricity back to their supplier using the Smart Export Guarantee scheme (SEG) will save between £360 and £610 a year. This drops to between £205 and £500 without SEG. These savings are slightly reduced for homes in Scotland, Wales and North England, and reduce again in Northern Ireland. 

The biggest savings come from using what you generate from your own system, rather than buying your power from an energy provider. 

You can also save on energy bills by using solar power to heat your water. A PV diverter switch can power the immersion heater in your hot water tank for you to use later. 

READ MORE: Your guide to installing solar panels

How long will it take for solar panels to pay for themselves? 

This will depend on the size of your home, the system you install, and how much energy you use. If you decide to sell excess energy back to the grid, this will shorten the time. Typically, it can take anywhere between 11 and 15 years for the savings you make to cover your initial outlay for having the panels installed. 

Is there any government assistance towards the cost? 

If someone in your household receives a pension or is on benefits, you may be eligible for the Energy Company Obligation scheme (ECO4). This government energy-efficiency scheme is open to low-income households in Great Britain with inefficient heating systems, and provides grants for solar PV panels.  

If you live in England, Scotland or Wales, there’s also the Smart Export Guarantee (SEG) scheme.   

How can I sell surplus electricity back to my energy supplier? 

According to government policy, if you generate renewable electricity in your home, you can feed any electricity that you don’t use back into the grid. Under the Smart Export Guarantee (SEG), you’ll be paid for every unit of electricity that you feed back.  

The Energy Saving Trust estimates that most households will use about 15-25% of the energy generated, though this can change quite dramatically based on whether you work from home, if you cook or heat your home using electricity, and if you have an electric car. 

To qualify for SEG, you must meet set criteria. The system you use to generate the electricity has to meet SEG standards, and the installation must be certified by the  Microgeneration Certification Scheme (MCS), or equivalent. You must also have a meter that can provide half-hourly export readings, such as a smart meter.  

How much could I earn from selling surplus energy vis the Smart Export Guarantee? 

The tariffs per kWh offered by energy providers vary, as they can set their own tariffs. The Eco Experts estimate that if you own a three-bedroom house with a 3.5kWp solar panel system (10 solar panels), you can earn around £73 per year from this scheme. This rises to £102 if you have a larger home, and a bigger solar power system (14 panels).  

The OFGEM website has a list of energy providers who provide SEG tariffs. 

READ MORE:
How does solar power work?
Your guide to installing solar panels
Energy Performance Certificates