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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 three-bedroom house with the addition of a battery, but it can range between £3,654 and £18,152 depending on the size of the system you opt for. While the upfront cost may seem high, the potential annual savings of over £1,100 and the fact that panels can pay for themselves in as little as nine years mean it’s no surprise that over 1.7 million homes have made the switch to solar so far.
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 breaks down the long-term savings and explains how solar panels provide a sustainable, cost-effective solution to rising energy demands.
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The average home can save £1,190 every year with solar panels!
On average, a typical domestic solar panel system’s output ranges from 4kW to 6kW.
However, the cost of a solar panel system varies depending on the size of the system, the type of panels used, and the complexity of the installation.
The Berlin-based Mercator Research Institute on Global Commons and Climate Change (MCC) revealed that the cost of solar power has decreased by nearly 90 per cent in the last decade, meaning it’s conceivable that solar power will become cheaper than using fossil fuels. The decreasing costs of solar battery storage and other renewable technologies are also likely to encourage more and more people to move towards sustainable energy solutions.
The table below shows 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. However, it’s important to note that these are average prices, and the actual costs may vary. Upfront costs vary according to panels’ efficiency, the specifics of your property, 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 of these parts contribute, and how much they cost.
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 installation costs, so on average about £3,000 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, meaning you might need fewer panels overall.
There are three main types of solar panel cells commonly used in residential and commercial applications: monocrystalline, polycrystalline and thin-film.
Monocrystalline solar panels are made from single-crystal silicon and are the most efficient type of solar panels available, at around 15–20 per cent. As a result, they’re more space-efficient and have a longer lifespan than other types of panels, but they tend to be the most expensive option.
Polycrystalline solar panels are made from silicon crystals that are melted together. While they have slightly lower efficiency rates between 13–16 per cent, polycrystalline panels are usually cheaper. The efficiency difference 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 are measured in kilowatts. On average, a three-bedroom home in the UK needs a 4.5kW system to cover its energy needs, so if monocrystalline panels cost around £1 per watt, a 4.5kW solar panel system will cost around £4,500 (not including the cost of mounts, inverters, labour and other elements).
Thin-film solar panels are a much less common type of solar panel, and they have the lowest efficiency rates of the three types, typically around 10–13 per cent. While they are lightweight and flexible, their lower efficiency means they require more space for the same output as more efficient panels, making them less suitable for residential applications.
While your chosen installer will usually determine the system size needed for your property and 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.
The quality and efficiency of the solar panels can also greatly influence the cost of your system. Higher-quality panels often have better efficiency, converting more of the sunlight they absorb into electricity, but they also come at a premium.
For most households, choosing a budget solar panel shouldn’t be a hindrance on the efficacy of the solar panel system. In fact, cheaper options can be just as effective as more expensive panels. However, if you live in an area with very little sunlight or daylight, consistent adverse weather conditions such as high winds that can affect the panels’ resistance, or if your roof is shaded most of the time, you may need to pay more for panels which offer extra features or a higher power output.
How many solar panels you need will depend on the power output of each panel 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 accounts for 10-20 per cent of the total installation cost. For a three-bedroom home, the price of an inverter ranges from £900 to £1,800. There are two main types of inverters used in residential solar systems: string inverters and micro-inverters. Micro-inverters are the more expensive option, but they can increase your system’s efficiency, especially if part of your roof is shaded. Typically, inverters have a lifespan of around 10 years.
Solar batteries are an optional part of a solar system, but they can help you save more money by generating your own solar energy. If you choose to install solar battery storage, this will make up about 22 per cent of the cost of your solar panel system, as they tend to cost upwards of around £2,000. Some installers believe a battery will increase your energy savings by up to 90 per cent: as well as storing excess solar energy to use at other times, a battery also means you can sell surplus energy generated back to the National Grid via the Smart Export Guarantee (more on this below).
Installation and mounting costs (namely 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 cost of your solar system. Factors that might increase these costs include a challenging roof layout, the need for structural upgrades to support the panels or the removal and replacement of roofing materials.
Most solar panel manufacturers offer a performance guarantee that promises the panels will produce at least 80-90 per cent 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.
In its drive to promote 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. These grants provide differing levels of funding – the ECO4 scheme, for example, offers free solar panels to those that qualify.
Solar panel subscriptions are another way for customers to avoid the large initial cost of a solar panel system, by paying a monthly fee to cover the warranty and maintenance costs of the panels. Usually, the installer ‘owns’ the panels and you buy the solar-generated electricity from them at a reduced rate compared to traditional energy costs; sometimes, you will own the panels at the end of the term.
In the UK, Value Added Tax (VAT) is normally charged on goods and services at a standard rate of 20 per cent. However, as part of the government’s 2022 Spring Statement, it was announced that homeowners would pay 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 per cent VAT, although this drops to 5 per cent if certain eligibility criteria are met.
Depending on the efficiency of your system and how much energy your household consumes, solar panels can reduce or even eliminate your electricity bills entirely. Solar-generated electricity is free (once you’ve paid for the system) and can save you up to £1,100 a year for a 4.5kW system.
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 £27,500.
How much you can save depends on several factors, including your solar panels’ efficiency, whether you take advantage of SEG payments and your household’s electricity consumption.
If you are at home all day, you’ll inevitably use more electricity than someone who is at the office for eight hours every day. Our experts have used a typical mid-century three-bedroom property with a 4.5kW solar panel system to show the potential savings available, depending on how long the house is occupied during the day.
| 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 a couple of additional things to consider to make your energy usage as efficient as possible:
The break-even point for solar panels – the point 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.
| Property size | Number of panels | Total cost (inc installation and battery) | Potential annual energy bill savings | Payback period |
|---|---|---|---|---|
| One bedroom | 4 | £6,200 | £377 | 16 years |
| Two bedrooms | 8 | £8,200 | £750 | 11 years |
| Three bedrooms | 12 | £9,600 | £968 | 10 years |
| Four bedrooms | 16 | £12,000 | £1,219 | 8-10 years |
Approximate prices for June 2024. Source: Federation of Master Builders.
“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’s days when we’re not using any [grid] electricity, the battery is charged up to 70 per cent, and it lasts until 10pm 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.”
Buying solar panels now allows you to start saving money on your bills immediately. According to some installers, this could be as much as 90 per cent 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 kW/h at 22.29p; by installing a solar panel system, you’ll save on these costs by relying less on electricity from the Grid. Rising energy prices also mean that solar panel systems will pay for themselves quicker, currently in as little as 7-9 years with a solar battery.
Despite these incentives, people considering solar panels may still be hesitant about the cost and ‘hassle’ of installation. According to a government survey from 2021, 61 per cent of people who were 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 that the process was easy and hassle-free, proving that the installation journey is far simpler than people think.
Solar panel installations are a considerable investment, so comparing various quotes ensures you get the best value for your money. Prices can vary significantly differ between providers, but these are the things you should be looking out for:
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With so many solar panel providers on the market, it can be difficult to decipher 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, as well as various different 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 decade, it’s probably not worth investing in solar panels. While the investment can definitely increase the value of your home if you go on to sell in the future, you’ll still run the risk of not breaking even on your solar panel system if you move before they’ve paid for themselves.
In order to accurately assess the various costs of installing a solar panel system, we used several reputable sources to look into the different components of a solar installation. These include the Energy Saving Trust, Ofgem and the Microgeneration Certificate Scheme. We also generated 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, but it doesn’t include the addition of 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
Which elements of a solar panel system you require will depend on your house size, annual energy consumption and other factors, such as how shaded your roof is and where you live in the UK. We used EST data to determine the cost of various solar system sizes; from there, we calculated the potential savings you could make from them, 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 breakeven 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, which helps show how the breakeven 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. However, it’s worth noting that MCS data doesn’t account for the price of a battery or any other additional costs, and it only relates to MCS-certified installations.
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 that affect the solar panel’s cost, start requesting quotes from reputable suppliers and installers. When comparing quotes, consider the system’s efficiency, longevity and potential savings over time, as a cheaper system might not be the most cost-effective in the long run.
It’s also helpful to read reviews and seek recommendations to ensure you’re getting a quality product and service for the price. Finally, look out for Government grants or incentives that your local utility companies offer, as these can significantly reduce costs.
Solar panels usually fall under building insurance as they are an integral part of your home’s structure, so it’s essential to ensure you 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, so 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. However, you should investigate which suppliers offer the best SEG rates for purchasing the surplus electricity you produce before you commit to a supplier.
Your energy supplier can also differ from your SEG company. Some companies, such as Octopus, offer better rates for exporting energy if they’re also your primary energy supplier. For example, a contemporary SMETS 2 smart meter can accommodate two companies, eliminating the need for a separate meter installation.
Yes, solar panels are worth it for many homeowners. They reduce electricity bills, often paying for themselves in 7–10 years, and offer long-term savings. Solar panels also increase property value and support environmental sustainability. With incentives like the Smart Export Guarantee (SEG) and 0% VAT on installations running until 2027, the financial benefits are even more attractive, making solar panels a cost effective investment for energy independence.
