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

If you want to invest in renewable energy, it’s worth knowing how solar panels work for your home and how much solar panels cost. 

Not only is it good for the environment, going greener also benefits household energy bills as you can use what you generate and can even get paid for any excess you make that you don’t need. 

Having solar panels does not restrict the suppliers you can switch to either, so you can do an energy comparison to find a cheaper deal. 

But installing solar panels is a long-term option that can help bring your energy costs down. So, how much do solar panels cost and are they worth it? 

How much do solar panels cost and how much could I save?

On average, one 350W solar panel costs £786 according to the Eco Experts. But, there isn’t one fixed price for all when it comes to how much solar panels cost. 

The size of your home will impact what size solar panels you need and how many, plus where you live and the quality of the solar panels will affect the price. 

Also, what the installer will need to complete your job may also drive the price up, such as materials, labour and scaffolding. 

Here’s how much solar panels would cost for different sized homes according to the Eco Experts, and the average annual savings, based on the current energy price cap from July to 30 September. 

Size of home 1 bedroom 2 bedrooms 3 bedrooms 4 bedrooms
Number of solar panels 3 10 10 14
Annual electricity usage 900 kWh 1,800 kWh 2,900 kWh 4,300 kWh
Average cost £2,358 £4,716 £7,860 £11,005
Total annual savings £167 £334 £557 £780

It’s important to note that these are averages and will vary per household, but it should give you a decent idea of what you should expect to pay.

The Eco Experts say that 45% of the average cost goes towards materials, 35% for business costs (such as vehicles and scaffolding) and 20% for labour. 

A spokesperson for the Energy Saving Trust said: “The amount of money you’re likely to save on your energy bill will depend on several factors, including the direction of your roof, where in the country you live and how much time you typically spend at home during the day.

“For example, based on current energy prices under the July 2023 Ofgem energy price cap, a typical London household out all day until 4pm could expect to save £220 a year on their energy bills by installing a solar PV system.”

How much will suppliers pay for the excess energy I generate?

As an incentive to move towards green energy, suppliers are paying households who use solar panels under the Smart Export Guarantee (SEG) scheme, which came into place on 1 January 2020.

Under the SEG scheme, energy companies with more than 150,000 customers must offer at least one tariff which pays households for each kWh of electricity generated from solar panels that you don’t use, and instead export back to the grid.

However, how much you get paid under the SEG scheme varies per supplier and the rates can be fixed or variable. So it’s best to go for the highest-paying supplier. You don’t have to go with the firm that supplies your energy, but some offer better rates to customers.

Here is a list of what each energy supplier pays households under the SEG scheme (as of 15 September 2023):

Supplier SEG tariff Rate/kWh Type of tariff When are you paid
Octopus Energy Outgoing Agile Average 16p (the rate changes in line with wholesale price) Variable Monthly
E.on Next Next Export 16.5p or 3p (get its best rate if it installs your panels) Fixed for 12 months Annually (You can request four payments a year)
Octopus Energy Outgoing Fixed 15p or 4.1p (get the top rate if it supplies your energy) Fixed for 12 months Monthly
Scottish Power SmartGen 15p or 12p (get its best rate if it installs Variable Every six months
Octopus Energy Outgoing Fixed Lite 8p (You need to be on the Octopus Go Tariff) Fixed for 12 months Monthly
British Gas Export & Earn Flex 15p or 6.4p (get the top rate if it already supplies your energy) Variable Every three months
EDF Energy Export Variable Value 5.6p or 3p (get the top rate if it supplies your energy) Variable Every three months
Utility Warehouse UW Smart Export Guarantee 5.6p or 2p (get top rate if you have 2 or more services with Utility warehouse) Variable Every three months
Pozitive Energy SEG tariff 5p Variable Every six months
So Energy So Export Flex 7.5p Variable May be monthly, quarterly, or half-yearly
Ovo Energy Ovo SEG Tariff 20p or 4p (Get top rate if you have a smart meter, OVO is your energy supplier and it installed your panels) Fixed for 12 months Every three months
Shell Energy SEG V1.1 Tariff 3.5p Variable Annually
SSE Smart Export Tariff 3.5p Variable Annually
Utilita Smart Export Guarantee 3p Variable Every three months
E SEG January2020v.1 1p Variable Annually

Before moving onto an SEG tariff, you need to check if your household is eligible. Below is the eligibility criteria: 

  • You need to have a smart meter so it can track how much solar electricity is being exported to the grid. If you’re unsure what meter you are on, you can get in touch with your energy supplier and tell them you want to move onto an SEF tariff. They will tell you if you are eligible. Your solar panels need to have a capacity of five megawatts or less, and solar panels need to be certified by the MCS scheme.

How to find a solar panel installer

The Energy Saving Trust recommends finding an installer that is registered under the Microgeneration Certification Scheme (MCS), which has a full list of registered installers online.

It’s also worth making sure the installer is a member of either the Renewable Energy Consumer Code or the Home Insulation and Energy Systems Quality Assured Contractors Scheme (HIES).

You should also get quotes from at least installers before committing to installation.

When you get the three quotes, ask if they do the following: 

  • Scaffolding
  • Removal of existing roof
  • Managing connection agreement with the energy supplier
  • Internal wiring work
  • Use generation meter
  • Electrical connection work 

That’s a lot to consider and manage if you’re having solar panels installed in your home. And with the hefty cost, are they really worth it? 

Are solar panels worth it and how long will it take to break even?

It’s a good time to buy solar panels according to the Eco Experts, especially at a time when households are bracing for an expensive winter. They say it cuts energy bills by 64% on average, which means an annual saving between £30 and £780 for the majority of homes. 

As costs can vary, Energy the Saving Trust says it can take between 14 to 22 years to break even. 

You can get an estimate for how much solar panels would cost for your home and how long it’d take to break even using the Energy Saving Trust calculator

It is worth the investment in solar panels if you can afford the initial costs, as in the long term, you will bear the benefits of hundreds of pounds off your energy bill and lower your carbon footprint. 

And if you’re wondering will energy prices fall in 2024? – we’ve had a look at what the analysts are predicting in our article.