Cost of solar panels in the UK

Solar panels in the UK can cost between £3,654 and £18,152. For those considering switching to solar energy, the potential savings of over £1,100 every year are one of the most appealing factors, along with the fact that you could break even in as little as nine years. 

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 on average £7,100 without a battery.
• A 6kW system costs on average £8,000 without a battery. 

The cost of solar panels 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% in the last decade, meaning it’s conceivable that solar power will become cheaper than using fossil fuels. The decreasing costs of solar batteries 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 system, breaking it down into property and system size, and 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. Prices fluctuate based on panels’ efficiency, the specifics of your property, and your chosen installer, while potential savings depend on current electricity prices.

Below, we’ve broken down the different elements of a solar panel system, what each of these parts contribute, and how much they cost.

A detailed cost breakdown

Solar panels usually make up about 33% 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%. 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%, polycrystalline panels are usually cheaper. The efficiency difference means they might require more space than monocrystalline panels for the same electrical output, however.

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 %. 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.

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.

A solar inverter typically accounts for 10% to 20% 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.

Battery costs explained 

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% 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%: 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 costs explained

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% 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. 

Solar panel grants

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. 

Payback and subscription options for solar panels

Solar panel subscriptions are another way for customers to avoid the large initial cost of a solar panel system.  by paying monthly for the panels to cover the warranty and maintenance costs. Usually, the installer ‘owns’ the panels, and you buy the solar-generated electricity from them for much cheaper than traditional energy costs. Sometimes you will own the panels at the end of the term. 

0% VAT scheme

In the UK, Value Added Tax (VAT) is normally charged on goods and services at a standard rate of 20%. 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% VAT, although this drops to 5% if certain eligibility criteria are met. 

Earn through SEG

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 (bar the initial cost of 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 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 4.5kW solar panel system to show the potential savings, depending on how long the house is occupied during the day.

There are a couple of additional things to consider to make your energy usage as efficient as possible: 

• Check energy labels on new appliances like dishwashers or washing machines and choose models that are as energy-efficient as possible.
• By running appliances during the day, you can use the free energy generated by your panels, and timer switches can be used if you’re out of the house.
• Remember to unplug electronics when they’re not in use or employ power strips that you can switch off. Many electronics draw power even when turned off, a phenomenon known as “phantom load” or “vampire power.” 

When will I break even with solar panels?

The break-even point for solar panels – meaning 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.

Approximate prices for June 2024. Source: Federation of Master Builders.

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% 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 to 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% 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% of respondents who had already installed solar panels reported that installation was easy, which proves that the actual effort of installation is lower than prospective panel owners think. 

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

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.