How much do solar panels cost?
In 2021 one in every 25 buildings in the UK has solar photovoltaic (PV) panels on their roof. That amounts to more than a million rooftops across the country. At the same time solar energy has been called the cheapest electricity in history, according to the International Energy Agency.
This is because the cost of solar power has been plummeting over the last 40 years; indeed it dropped by a whopping 89% between 2009 and 2020.
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The incredible thing about Solar PV panels is that they let you both save and earn money. You save money, when you use electricity generated by your own solar array (an array is a collection of solar panels on your roof) rather than using power from the national grid. You earn money by selling the energy you generate, but don’t use, to your energy supplier. This really makes sense when you consider that the price of electricity in the UK is due to rise over the next five years.
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So, solar panels are a fantastic investment, right? Well, it’s a little more complex than that. Before you start saving and earning, you first have to buy and install your solar panels. This raises a number of questions: how much do solar panels cost? How much does installation cost? How much does it cost to run and maintain your solar panels? Finally, when we tot it all up, what will be the savings on our energy bills?
The initial cost of solar PV panels
The cost of solar panels depends on a number of factors. These include the material it is made from, the efficiency of the panels (ie the amount of energy produced per square centimetre of panel), the degradation rate, and the number of panels you can fit or afford on your roof.
A general rule of thumb is that the more you spend on your initial outlay, the more money you will save over time. This is because spending more on your solar panels will mean that either have more solar panels on your roof (if you have space) or the panels you have will be more efficient. Either way, more panels or more efficient panels, will generate more electricity and thus save or earn you more money.
According to the Energy Saving Trust, the British sustainable energy not-for-profit, the average domestic solar PV system is about 3.5kW and costs about £4,800.
It is very difficult to say exactly how much your panels will cost. There are many different manufacturers of solar PV panels in the UK, each company makes a range of different panels, and labour costs vary. We recommend getting three quotes and the installation companies will each recommend a selection of panels that will suit your roof best.
The cost of installing solar PV panels
Quotes for installing solar PV panels will vary, but as a rough guide you will pay £300 to £500 per day for labour and the job will usually take a day or two.
Running and maintenance costs
Once installed, Solar PV panels are pretty cheap to run and maintain. You can have yearly service that will inspect components such as your meter and inverter, as well as checking your current, voltage and energy production. This should cost under £100.
To make sure your panels maintain maximum output, they should stay clean and clear. This might mean cleaning dust, pollution and even bird droppings from the surface. If trees obstruct your panels, you may have to hire a tree surgeon to clear any branches.
The biggest running cost is the possibility of replacing your inverter. This is the bit of kit that changes the DC current that the panels generate into the AC current that your domestic electricity system uses. The inverter also monitors the amount of energy that your panels generate.
Inverters can wear out before your panels – they typically have a 10-year warranty rather than 25 year like the actual panels – and cost about £500 to £1,200 to replace, depending on what sort of inverter you use.
The saving on your energy bills
So, how much money will you actually save – and earn – on your energy bill? Once again, there is no simple answer.
The first two things to consider are where you live in the UK and how much time you spend at home in the day. These apparently random facts actually make a big difference to the amount of power you generate. This is because different parts of the UK experience different amounts of energy-generating sunlight and you make most of your electricity savings in the daytime.
The Energy Saving Trust estimates that a 3.5kWp system in the south of England will generate 3,700kW hours a year, while one in Scotland will generate 2,850kW hours a year. This can make a savings difference of £50 a year.
The amount your panels will save you also depends on whether you are home all day or when you get home. This is because you save more if you use the energy during the peak solar daytime. The Energy Saving Trust have a helpful solar energy calculator to let you see the savings according to where you live and when you are at home.
Next you have to make sure that the installation is MCS certified, in other words that it is approved by the UK’s Microgeneration Certification Scheme. Only MCS-certified installations can be paid for any excess energy they produce.
Finally, you should find a good small export guarantee (SEG) deal with an energy company. This means you will get paid for the energy that you produce but don’t use. Solar Energy UK, the UK’s solar energy trade body, produces a league table of SEG suppliers. Their top four deals as of April 2021 are with Tesla (x2), Social Energy, and Octopus Energy.
You can boost your savings further by properly insulating your house. Make sure you have the loft, walls and floors insulated. Just insulating the loft of a semi-detached house can save you £150 a year.
If you are not at home during the peak generation period – i.e. the daytime, especially the morning – then you could buy a battery to save the energy and use it when you get home. Solar batteries can range greatly in price from around £2,000 and up; at the pricier end of the market the Tesla Powerwall costs £6,200.
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Alternatively, there are a host of tricks to make the most of your daytime solar power, such as setting your dishwasher and washing machine to work during the day.
It is important to remember that although solar power should be a good long-term investment, it will probably a few years to earn back your initial outlay. Bearing this in mind, it is not advisable to take out a loan to finance your solar panels. High interest loans, especially those offered by solar installers, can swallow all or most of your energy bill savings.
Author: Jonathan Jones
Jonathan is the founder of Energy Switching UK. With over half a decade of experience in the price comparison space, Jonathan is now using his expertise and experience to help consumers switch and save money on their energy bills.