How Much Do Solar Panels Cost in the UK?


How much do solar panels cost?

How much could I save?

How do I make money? What is the Return On Investment?

What size solar panel system should I get?

Is my roof suitable for solar PV?

How long do solar panels take to install?

How long will my solar panel earn me money for?

What are the risks?

Anything else?


How much do solar panels cost?

The average family home needs a solar PV panel that provides about 3kW of electricity. This will cost between £4,000 and £6,000 and cover about 21m² of roof space.

While this may seem like a large sum you will actually make this back in about ten years because the government pays you for the electricity you produce and you save money on your energy bills.

The government payout is called the Feed-in tariff and it lasts for twenty years.

The price of a solar panel will vary depending on the quality and size, and the average prices are listed below:


Approximate Roof Space

Typical System Size
Estimated Cost (£)

Estimated Annual Output

CO2 saved over 25 years (tonnes)

Estimated First Year Return
Profit Over 20 years
8m2
1kW
2,500-3,000
850kWh
10
£184
£650
14m2
2kW
3,000-4,000
1,700kWh
20
£368
£3,800
21m2
3kW
4,000-6,000
2,550kWh
30
£534
£5,635
28m2
4kW
6,000-8,000
3,400kWh
40
£700
£6,750

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How much could I save?

You earn money from solar panels in three ways. The government pays you for both the energy you use and the energy you don’t use (Feed-in tariff). You then make further savings because you are powering your house with free energy.

Of course, the more energy efficient you are the more money you will save.

So small behaviour changes such as using your dishwasher and washing machine in the day when your panels are active can make huge savings.

To work out how much you could save click here for our solar energy calculator.


Savings Each Year


Source of Income
What you can save/earn
Generation Tariff
£490
Export Tariff
£80
Electricity Bill Savings
£125
Total per year
£695

*This table is based on a 3.5kW solar panel installation using data taken from the Energy Saving Trust.


Savings Over 20 Years


Year
Earnings/Savings
Profit/loss
One
£695
-£6,305
Five
£3,475
-£3,525
Ten
£6,950
-£50
Fifteen
£10,425
£3,425
Twenty
£13,900
£6,760

*You will be paid the Feed-in tariff for 20 years. This table shows how much you can earn and save over time based on a 3.5kW system on average.


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How do I make money with solar panels?


Solar panels allow you to earn money in the following three ways:

Feed-in tariff rate – 14.38p/kWh

Firstly, the government pays you for the electricity you generate and use, this typically add ups to about £400 per year for an average 3kW panel. The Feed-in tariff is tax-free, index-linked and lasts 20 years.

National Grid sell back rate – 4.77p/kWh

The government also pays you for the electricity you produce but don’t use. This gets sold back to the grid and will earn you about £60 per annum.

Savings on energy bills

You will also save on your energy bills because the electricity you use when your panels are in use is free. This should save you about £100 a year. On top of this, you are helping the environment by not using as much carbon.

a diagram showing how solar PV panels work
Latest Feed-in Tariff Rates

Band (kW)

Generation Tariff between February 1 and May 1 2013 (p/kWh)
Generation Tariff between May 1 and July 1 2013 (p/kWh)
Generation Tariff between July 1 and October 1 2013 (p/kWh)
4 or less
15.44
15.44
14.9
4 - 10
13.99
13.99
13.5
10 - 50
13.03
13.03
12.57
50 - 100
11.5
11.1
11.1
100 - 150
11.5
11.1
11.1
150 - 250
11
10.62
10.62
250 - 5,000 (or 5mW)
7.1
6.85
6.85
Stand alone
7.1
6.85
6.85

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What size solar panel system should I get?

It is important you get the right sized panel to meet your household’s needs.

A single resident and a couple will use about the same amount of energy (3,300kW per year). A family with two children will use between 3,300kW and 4,500kW per year so will need a bigger panel.

Because of the way the Feed-in tariff works the more energy you produce, the more you get paid. If this is a priority for you, you may wish to invest in a bigger panel.

This table shows what factors you should consider in a solar panel comparison.

Solar Panel Comparison Table

Criteria

Brand X
Brand Y
Brand Z
Number Of Panels
15
15
15
Annual Output
1,400 kW
1,500 kW
1,600 kW
Area Needed
14m2
14m2
14m2
Cost of System
£4,800
£5,000
£5,300
FiT Income Per Year
£224
£240
£256
Energy Savings Per Year
£84
£90
£96
Export Tariff Per Year
£32
£34
£36
Total Benefits Per Year
£340
£364
£388
Annual Return on Investment
7.08%
7.28%
7.32%

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Cheap Solar Panels

Green Deal Finance

The UK Government launched Green Deal in 2012 – a financing mechanism to help people pay for energy-efficiency improvements to their home such as insulation, glazing and microgeneration. Installation and materials are not charged for up front, but repaid directly through the savings in your energy bills. Green Deal replaces as the Carbon Emissions Reduction Target (CERT) and the Community Energy Saving Programme (CESP). First of all your home will need to be assessed for eligibility, so call the Energy Saving Advice Service on 0300 123 1234 to arrange an assessment with a local Green Deal representative. Once assessed - and if approved - you can take your personal Green Deal report to any registered Green Deal Provider, and if they can they’ll fund and carry out the work for you.

You repay your provider over time through your electricity bill - your electricity supplier passes payments directly to your Green Deal Provider. Your repayments won’t exceed the savings you’re making on household bills, so you essentially make your repayment without feeling the pinch. In fact, you may even be better off from the start.

If you sell your home before you have repaid your provider, this isn’t a problem. You simply hand over the remaining charge – and all that valuable energy efficiency – to your buyer. Interest is charged on these repayments but remains fixed for the duration of the repayment schedule. Be aware that Green Deal Providers set their own rates of interest, so it’s worth getting a few quotes before you settle on your provider. Early repayment is allowed on these plans too, though your provider may apply a charge. Again, it’s worth shopping around to see which providers will charge what.


Is my roof suitable for solar PV?

Most roofs are.

Unless your roof particularly shadowy or completely north-facing, you should be fine. You may also need to check if you live in a listed building or conservation area.

While south-facing roofs are ideal, east and west-facing rooftops only produce 15% less electricity.

You will also need a small amount of space (normally in the attic) for your inverter. This converts the sun’s light into the energy you will use.

Solar panels can also be installed so they fit around skylights and other features.

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How long do solar panels take to install?

It should only take a couple of days, and you will be able to generate electricity the day after your installation is completed.

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How long will my solar panel earn me money for?

Solar panels work for about fifty years, meaning half a century of free electricity.

Having a panel should ensure huge energy bill savings as prices look set to soar for the foreseeable future.

It also means that you and your family will be protected if there is an energy shortage, because you won’t be relying on gas or electricity companies, just the sun.

The Feed-in tariff lasts for the first twenty years of your installation, earning you about £10,000 over that period.

Not only that, the Feed-in tariff is tax-free and index-linked.

Energy efficiency is often on the top of most property hunter’s lists so it is more than likely that, if you want to sell your house, buyers will appreciate the energy savings of your solar PV panels.


Watch a video on how solar PV works

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What are the risks?

Solar panels are low-risk because they don’t have any moving parts apart from the small inverter. This tends to be the only part that may need replacing.

However, most PV installations come guaranteed for the first 25 years, and it’s widely acknowledged they last another 25 after that.

However, it is important you make sure you only use MCS accredited installers.

They will install your solar panel properly and to industry standard, as well as providing a guarantee. You will not be eligible for the FiT if you do not use a MCS accredited installer.

We advise getting at least three quotes before you make a decision.

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Anything else?

Don’t forget to include your PV system on the household insurance policy. If you have any more questions please leave them in the comments below.

Alternatively complete the form at the top of the page to receive a call from one of our team of specialists to help you make a decision.

If you want to read previous customer’s experiences, click here to read some case studies.

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