The cost of solar panels in the UK 2024

Once seen as a big financial commitment, the average price of solar photovoltaic (PV) panels has steadily declined. A report by the International Renewable Energy Agency (IRENA) found that between 2010 and 2019, solar panel costs dropped by 82%. 

The cost of solar panels – around £6,800 for a typical three-bedroom property – compared to the savings they offer, which can be up to £1,050 annually, provides a payback period of around eight years, after which any generated energy is free.   

Our experts have compared 110 of the best solar panels, analysing their performance, efficiency, and value for money. This article breaks down their costs, factors affecting the price, hidden costs and, most importantly, what you can save annually. 

How much will it cost to install solar panels in the UK?

The table below shows the average cost of a solar system by house size. It also includes the time it takes a system to pay for itself, taking into account the potential savings.

House size	Number of panels	System size	Solar panels cost	Estimated annual savings	Break-even point
One to two bedrooms	6	2kW	£5,500	£520	11 years
Three bedrooms	10	4kW	£6,800	£960	8 years
Four plus bedrooms	14	6kW	£8,000	£1,050	8 years

For a typical three-bedroom household, a 10-panel 4kW solar system is often recommended, with each panel costing between £100 and £500, giving an estimated total cost of £6,800 including installation. 

The prices for solar panels vary depending on their power output and efficiency, with panels with a higher efficiency to generate more electricity typically costing more. Although your household use may not require more powerful panels, limited roof area may necessitate higher efficiency panels to generate sufficient electricity for the residence.

Solar panel grants and other incentives

Several solar panel grants and other incentives are currently available for UK homeowners, designed to reduce the cost of solar panels. This includes the government reducing the VAT on new solar panel installations, and maintenance to existing systems, from 5% to 0% until March 2027.

Grant/scheme name	Managed by	Eligibility	Potential savings
ECO4	Ofgem	Low income households in England, Scotland, or Wales in receipt of qualifying benefits	Up to 100% off the cost of installing solar panels
Solar Together	Local Authorities	Eligibility determined by local authorities	Savings vary (savings of 10–25% have been made previously)
Barclays Greener Homes	Barclays Bank	Barclays mortgage customer	£1,000
Lloyds Bank Eco Home Reward	Lloyds Bank	Lloyds mortgage customer	£500
Halifax Green Living Reward	Halifax	Halifax mortgage customer	£500

How much money can you save with solar panels?

The primary advantages of solar panels include potential savings on your electricity bills. 

The sharp increase in energy prices over the past few years means every kilowatt of solar-generated electricity you consume will offset a unit of power you would otherwise have to pay for from your energy supplier. 

Additionally, you could earn a significant sum with solar panels by selling any excess generated electricity back to the National Grid through Ofgem’s Smart Energy Guarantee (SEG) scheme.

Earning through SEG

The SEG initiative was introduced in January 2020 to replace the previous Feed-in Tariff (FiT) scheme. Under SEG, energy suppliers with over 150,000 domestic customers pay homeowners with solar panels for the electricity they export to the grid. 

SEG payments vary between suppliers and can be flexible, meaning they can change in response to market signals or fixed. When registering with a supplier, you aren’t required to be a current customer. However, it’s worth noting that existing customers often receive more favourable rates.

To be eligible for SEG, the solar panel installation must be:

• Certified under the Microgeneration Certification Scheme (MCS) 
• Have an electrical capacity of less than 5MW 

The export of electricity must be measured using a smart meter that records your exported electricity, even if you’re not signing up for a smart tariff. 

SEG payments range from Octopus Energy’s variable rate of 36.1p per kw/h to Utility Warehouse’s 2p per kw/h variable rate.

Save money using your generated electricity

As solar panels generate electricity during daylight hours, being at home or using energy-hungry appliances, in the day can lead to more significant savings. Setting timers on dishwashers, washing machines, and other appliances allows them to use your solar-generated energy if you’re out at work. 

What factors affect the cost of solar panels?

Several factors will affect the cost of your solar panel installation, and it’s important to consider their impact. 

System size

The size of a solar panel system can vary and is dictated by the energy you need to produce, and the size of your roof space Generally, a larger household necessitates a more extensive system, with the associated cost increase.  

Panel types

Solar panels are broadly categorised into three types:

• Monocrystalline: Monocrystalline panels boast the highest efficiency rates, though they come at a premium price.
• Polycrystalline: Polycrystalline panels are less efficient but have a more budget-friendly price tag.
• Thin-film solar panels: These are the cheapest option but typically have an efficiency of between 7% and 18% –  to make the best use of your roof space, a panel should have an efficiency of 20% or more.

Inverter

An inverter converts the direct current (DC) produced by the panels into usable alternating current (AC) electricity. 

While solar inverters are typically factored into the initial cost of your solar system, they have an average lifespan of 10 to 12 years. As solar panels can function efficiently for 20 to 30 years, you’ll likely need to replace the inverter at least once at a cost of between £500 to £1,000.

Batteries

While this involves an additional, optional investment, pairing solar panels with a storage battery can be highly effective. They allow excess energy generated during the day to be stored. Users can then utilise this energy overnight or on cloudy days, reducing reliance on the grid and making the most of the solar panels. The average cost for a storage battery is £4,500. 

Solar panel labour costs 

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 the installation costs are. 

The labour costs range from £300 to £500 for each worker per day, with a 4kW system taking one or two people up to two days to install and larger systems longer. However, many solar panel manufacturers are now producing more manoeuvrable panels that are lighter in weight, requiring a smaller labour team. 

Roof condition

Ensuring your roof’s structural integrity and condition is a fundamental step before installing solar panels. 

A compromised roof might not only be incapable of bearing the additional weight of the panels but could also lead to costly and complex repairs in the future. It’s important to remember that solar installations are designed to last for several decades. If your roof needs attention or replacement within a few years, addressing any issues post-installation can be challenging. 

Are solar panel prices decreasing?

According to the Department for Energy Security and Net Zero (DESNZ), the cost of small-scale solar installations up to an output of 4kW has increased over the last few years. Research reveals that between 2021 and 2023, solar panel prices rose by around 25% due to the increased costs of materials and labour and a greater demand for solar installations.

However, from April 2022 to 2027, the government reduced the VAT rate on energy-saving solutions, including solar panels, to 0%, making them more affordable.

What are the hidden costs with solar panels?

Beyond the initial investment, solar panels present minimal unforeseen costs; however, you should factor in several additional costs. 

Maintenance

When installed properly, solar panels are designed to last over 25 years. It’s beneficial to carry out regular maintenance to ensure their longevity and optimal power output. 

• Clear any obstructions, such as leaves or branches, from the panels
• For stubborn residues, gently hose down the panels from a distance. Avoid sponges to prevent scratching and potential damage
• Periodically have a certified technician inspect your panels

Repairs 

The need for repairs or replacements is rare but can arise in specific scenarios. Adverse weather conditions, such as snow or damage from falling trees, are the primary causes. 

Regardless of the cause for intervention, many solar panels come with product warranties lasting many years. It’s advisable to consult your solar panel manufacturer to understand the warranty’s specifics, especially regarding accidental damage or faulty products.

Solar panel costs FAQs

Will solar panels increase the value of my property?

Many buyers consider solar panels a valuable addition when purchasing a property. While the initial outlay for solar panel installation might cost thousands of pounds, having an existing solar system in place can be a significant draw for potential buyers, should you decide to sell your home.

Are solar panels worth it in 2023?

Solar panels are increasingly viewed as a worthwhile investment for many homeowners and businesses. Advancements in technology have reduced costs, making the upfront expense more manageable. Government incentives in many regions further alleviate the financial burden, promoting a quicker return on investment. Solar panels not only offer the potential for significant savings on monthly electricity bills, but also increase property value, presenting a two-fold financial benefit. 

With growing concerns over climate change, transitioning to solar energy provides an eco-friendly solution, reducing the carbon footprint and decreasing reliance on fossil fuels. 

Given these factors, while individual circumstances can vary, the general sentiment is that solar panels offer both financial and environmental advantages that make them a compelling choice.

Do I need to tell my energy supplier I have solar panels in the UK?

If you’ve installed solar panels, it’s essential to inform your energy supplier. 

Notifying them is crucial for several reasons. Firstly, a registered installation is necessary if you’re looking to benefit from the Smart Export Guarantee, which compensates for the surplus energy you return to the grid. Your supplier needs to be aware to facilitate these payments. They may also need to replace or adjust your existing metre to ensure it reads accurately, especially when exporting power back. 

The Distribution Network Operator (DNO) responsible for grid management should be aware of all energy-producing installations. This knowledge helps in effective grid management and guarantees the safety of maintenance workers. Overall, keeping your energy supplier updated ensures efficient operations and precise billing.