How much do solar panels cost, and are they worth it?

Adverts for solar panels seem to pop up everywhere, telling you how easy they are to install, the benefits to the environment and the money you can save on your energy bills. 

If you’ve recently had a windfall or are thinking of using some savings to invest in your home, you might be wondering if solar is the way to free you from the inexorable rise in energy bills. 

But before you take any action it's important to do your research and make sure you understand what investing in solar will do to your energy costs - and whether it'll fit with what you need. 

What’s the current state of play with solar energy? 

More than 1.5 million homes in the UK now have solar panels. However, while the cost of solar power has decreased by almost 90% over the past decade, the average installation is still £7,000. 

Given the average household is spending around £600 on electricity at the time of writing, that means it takes years for the savings on your energy bills to offset the cost of fitting solar panels – not to mention the hassle of having them installed. 

However, a survey by Solar Energy UK, the trade body for the solar panel industry, found that adding the energy source to a home can increase the value of a property between 0.9% and 2% – on average, that’s an increase of roughly £2,000 to £4,000. 

There are environmental benefits too, thanks to switching your home to using clean, renewable energy – although you may still need to rely on the National Grid when sunlight is less available or you’re just using more than your system can produce. 

How many solar panels will I need? 

Generally, the larger your house and the more electricity you use, the more solar panels you’ll need to fit. 

“For an average UK home, which usually uses around 3,000 kWh of electricity per year, you’d typically need a 4 kW system. This translates to about 12 to 16 solar panels, taking up around 30 square meters of your roof space,” says Hannah Holway, Solar Panel Expert at trade association The Federation of Master Builders. 

“If your home is larger – or you use more electricity – you might need a bigger system. For example, a 5 kW system would need about 20 panels, and a 6 kW system would need around 24 panels, covering up to 43 square meters of roof space.” 

But this is only a general guideline, and other factors need to be considered. 

“For retirees, the situation might be a bit different,” adds Holway. “Since you might be spending more time at home and potentially using more electricity during the day, you might need to adjust your system size based on your specific usage.” 

You can also use the Energy Saving Trust’s solar panel calculator to help you work out whether your home could benefit from solar panels and how many you’ll need.  

How much do solar panels cost? 

The cost of solar panels will depend on the number you need, how easily your roof can be accessed and the installer you use. The Energy Saving Trust pegs this figure at £7,000 for the average system.

Meanwhile, Greenmatch, a portal for renewable energy quotes, is more optimistic, saying a typical solar panel system costs £5,000 to £6,000 with installation. 

While the definition of an ‘average’ installation used by the companies above slightly differs, the wide range of price highlights the importance of getting multiple quotes from a range of installers to find the best deal. 

Given the size of the outlay required, it’s also important to look ahead and think about whether you might need that money for other expenses as you age. 

How long will I need to stay in my house to recover the cost? 

“For retirees, the decision to invest in solar panels should be based on a careful consideration of their energy needs, budget, and long-term plans,” says Holway.  

If there’s a chance you might move house in the next decade, solar panels probably won’t be right for you – especially if you’re only interested in getting a return on your investment.  

You should also think about the direction your property faces. “You’ll get the maximum benefit of solar panels if you have a diagonal roof and it’s south facing, though east and west facing can also work well,” says Becky Lane, CEO of retrofit firm Furbnow. 

“Your roof itself should be unshaded between 10am and 4pm, which is deemed as the peak period for daylight. Your roof also needs to be in good condition.” 

We tested a variety of housing types on the Energy Saving Trust’s calculator for a home in London, and it suggested we’d need around 10-22 years to recoup the installation costs of a solar power system. 

Depending on your electricity needs (such as whether you’re charging an electric car) other estimates state you can recover your investment in nine years, but most people will land around 15. 

Can I get a grant? 

The UK Government’s previous financial support for solar panels has now ended. 

However, if you claim certain benefits, and live in a house that isn’t energy efficient, you may qualify for help under the Energy Company Obligation scheme (currently known as ECO4) from your local council or energy supplier.  

“This is a government initiative that aims to help low-income households become more energy efficient. If you qualify, this could cover a significant portion of the installation cost,” says Holway. 

Eligibility criteria are strict, so not everyone is likely to qualify (and the scheme is not available in Northern Ireland.). But you might be eligible if you live in private housing and receive Universal Credit, Pension Credit or Housing Benefit (among others). 

If you own your home, it must have an energy efficiency rating of D, E, F or G. If you rent from a private landlord, it must have a rating of E, F or G and you will need to have the owner’s permission to do the work. You can check your home’s rating through the UK Government’s portal.  

Energy suppliers currently offer different ECO measures. You can check the Ofgem website to find out which suppliers are part of the scheme and contact a supplier directly to find out more. 

You don’t even have to contact the company that provides your gas and electricity, so if you think you might be eligible it’s worth doing some research. 

Are battery storage systems worth thinking about? 

In addition to the cost of the panels themselves, you’ll also need to consider whether you might need a battery as well. 

Battery storage systems let you stockpile any excess energy from your solar panels to be used when the sun isn’t out. 

But while they could potentially cut your energy bills further, they can cost an additional £2,500 to £10,000, depending on the size of your house and energy consumption. 

Buying a battery will also increase the amount of time it’ll take to make your money back through cost savings. 

They likely won’t last for as long as the solar panels themselves (around 10-15 years roughly, depending on the model), so you’ll need to factor in the cost of replacement too. 

It might not be worth spending this amount when you’re getting started; you can instead wait until you have an idea of how much energy you’re using and how much surplus you’re creating. 

Holway says: “For retirees, the decision to get a battery might depend on your daily routine. If you’re home during the day and can use most of the energy your panels produce, you might not need a battery as much.  

“But if you use a lot of electricity in the evening or just want the peace of mind that comes with having your own energy storage, a battery could be a good investment.” 

Can I sell any energy I don’t use? 

If you’re not storing energy to use yourself, you can sign up for the Smart Energy Export Guarantee (SEG) scheme and get paid for passing on surplus electricity you generate to the National Grid.  

You’ll need to have an export meter, or capable smart meter, fitted to do this and to tell your supplier how much electricity you’re exporting. 

Ben Whittle, Low Carbon Senior Consultant at Energy Saving Trust, explains: “This will let you earn money during the times when your solar panels are generating more electricity than you can use during the day.” 

To do this, you’ll need to sign up to a SEG tariff. All licensed energy companies with more than 150,000 customers must provide at least one SEG tariff, while smaller firms can offer one voluntarily. 

Energy suppliers can decide the rate they pay, the length of the contract and whether tariffs are fixed or variable. You don’t have to use the supplier you receive your energy from. 

Some energy companies are offering more than one type of tariff to ‘buy back’ electricity from you, meaning you’re getting more choice over who you send your power to. 

According to the Energy Saving Trust, a household in London could save around £360 a year on their energy bills with an average set of solar panels, rising to £630 if they use the SEG scheme.  

However, some SEG tariffs can offer poor value for money, with rates far lower than the amount you pay for your electricity.  

In most cases, you’ll actually save more by storing and using all of your electricity yourself, rather than selling it back, making a battery better value. 

How do I avoid the hard sell for solar? 

When considering solar panels, it can be easy to get sucked in by how much you could save on your energy bills.  

But it’s not a decision to be rushed and solar panels won’t be a worthwhile investment for everyone.  

If it’s something you’d like more information on, but you don’t want to commit, The Energy Saving Trust has an online assessment tool, Go Renewable, to help you find out what renewable technologies are suitable for your home. 

It can also be worth getting an MCS-certified solar installer to assess the suitability of your roof or look at sites such as the Federation of Master Builders (FMB) to help you find quotes.   

If you’re cold-called with offers of solar panel installations, make sure you research the company first before committing to taking the process any further. 

Installers that are MCS-certified must follow industry standards, while FMB members must also stick to strict guidelines and provide a reliable service. 

You can also search your local council’s website for approved traders. Trading Standards is a council department that ensures companies are not breaking the law when selling to customers.  

You should be able to see a list of the companies the council has approved, or you’ll be able to click on a link that takes you to another site to find out this information. 

Holway advises: “Do thorough research and get multiple quotes from reputable companies. Look for reviews and testimonials from other customers, don't be pressured into making a quick decision.  

“Be wary of companies that offer deals that seem too good to be true or push for immediate commitments.”  

If you’re still unsure, it’s worth taking a breath and thinking about the decision, factoring in the length of time it might take to recover the cost of the panels.  

Talk about with a friend or family member, especially if you’re being given a ‘time-limited’ offer from a salesperson.