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

Solar photovoltaic panels mounted on a tiled new familiy houses roof, England

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. 

Solar panels are good for the environment, plus they help with household energy bills. You can use what you generate, while getting paid for any excess energy that you don’t need. They also help with your energy performance certificate (EPC) rating.

Having solar panels doesn’t restrict the suppliers you can switch to either. Do an energy comparison to find cheaper energy deals for your home. 

But installing solar panels is a long-term commitment. Let’s find out how much solar panels cost and whether they’re worth it. 

If you’re not looking to install solar panels but still want to slash your energy costs, check out our energy saving tips.

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

On average, one 350W solar panel cost £786 in 2023, according to The Eco Experts. A three-bedroom house’s solar panels will typically cost £7,860.

The figures for 2024 haven’t been revealed yet, but we’ll keep you updated with the latest info in this guide when we get it and in our free money-saving newsletter.

Keep in mind that there isn’t one fixed price for all when it comes to how much solar panels cost. It’s impacted by many factors including the size of your home and your location.

It also depends on the size and quality of the solar panels you’re planning to get. The cost of materials, labour and scaffolding to install solar panels may also drive up the price.

But how much do solar panels cost on average? To give you a rough idea, here’s a breakdown by The Eco Experts along with how much you could save on your energy bills:

Size of home 1 bedroom 2 bedrooms 3 bedrooms
Number of solar panels 3 6 10
Annual electricity usage 900 kWh 1,800 kWh 2,700 kWh
Average cost £2,358 £4,716 £7,860
Total annual savings £161 £322 £537
Total savings after 30 years £1,671 £3,342 £5,571
Time it takes to break even 14.6 years 14.6 years 14.6 years

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

The Eco Experts says that 45% of the average cost goes towards materials, 35% for business costs (such as vehicles and scaffolding) and 20% for labour. For an average 3.5kWp solar panel installation, this would cost around £2,800.

Solar energy solar panels

How much will I get paid for the excess solar 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. This came into place on 1 January 2020.

Under this scheme, energy companies with 150,000+ customers must offer at least one tariff which pays households for each kWh of electricity generated from their solar panels. This is the energy that you don’t use, which is exported back to the grid.

How much you get paid under the SEG scheme varies per supplier. The rates can be fixed or variable. It’s best to go for the highest-paying supplier.

Here is a list of what each energy supplier pays households under the SEG scheme (as of 10 January 2024):

Supplier SEG tariff Rate/kWh Type of tariff When are you paid
Octopus Energy Outgoing Agile The rate changes in line with wholesale price. It has been about 16p for the last 12 months. See the latest prices on the Octopus Agile dashboard. Variable Monthly
Good Energy Solar Savings 20p or 15p (get the top rate if you install panels installation through its subsidiary Wessex ECOEnergy and if you are on Good Energy’s SVT) 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 your panels and/or battery) 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 20p or 7.5p (get the top rate if it installs your panels) Variable May be monthly, quarterly, or half-yearly
Ovo Energy Ovo SEG Tariff 20p or 4p (get the top rate if it installs your solar panels, supplies your energy, you have a smart meter, are a homeowner and live in an eligible postcode) Fixed for 12 months Every three months
Shell Energy SEG V1.1 Tariff 3.5p Variable Annually
Utilita Smart Export Guarantee 3p Variable Every three months
E SEG January2020v.1 1p Variable Annually

Am I eligible for a SEG tariff?

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 meter that can provide half-hourly export readings. This is typically a smart meter.
  • If you’re unsure what meter you’re on, get in touch with your energy supplier. Tell them you want to move onto an SEF tariff. They’ll let you know if you’re eligible.
  • Your solar panels need to have a capacity of five megawatts or less.
  • Solar panels need to be certified by the Microgeneration Certification Scheme (MCS) scheme. Learn more about this below.

How to find a solar panel installer

Solar roof installer, Engineer inspection the solar panels at roof top of home.

The Energy Saving Trust recommends finding an installer that is registered under the Microgeneration Certification Scheme (MCS). They have 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 installers before committing to the solar panel 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? 

Can I get solar panels for cheap?

You can get solar panels for cheap. However, while you might pay less in the short term, you’ll have to pay more in the long term to replace them. This is because solar panels for cheap typically don’t generate as much electricity as the costlier ones. 

Plus, cheap solar panels lose their efficiency very easily. They’re more likely to give you maintenance issues and aren’t built to last. 

Here are a few factors to help you find the right solar panels for your bank balance. This won’t compromise your quality and will find you a good deal.

  • Get more quotes: Request free quotes from solar panel installers to get an idea of the price range. You can then also compare the quality, costs and service offered.
  • Consider all costs: There are many costs that you must consider when installing solar panels. It includes warranty, labour costs, maintenance, and any equipment such as inverters or batteries.
  • Improve your energy efficiency at home: Before you install solar panels, make sure that your home is energy-efficient. This can be better insulation or energy-efficient appliances. By doing so, you can reduce the size of the solar panel system and the upfront cost.

If your house is in a low council tax band and doesn’t have great energy efficiency, you may qualify for the Great British Insulation Scheme. You might be able to get free or subsidised insulation for your home, which will help cut your energy bills, so it’s well worth seeing if you’re eligible.

Is it worth buying solar panels?

It’s a good time to buy solar panels, especially at a time when households are bracing for an expensive winter. According to The Eco Experts, you could save around £537 annually on your energy bills.

This would be a huge saving, especially with rising energy costs and higher cost of living. Plus, you can take advantage of the 0% VAT rate on solar installations. 

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.”

Find out how long it’d take you to break-even with a handy calculator 

However, keep in mind that solar panels can take over 14 years to break even for an average household. You can get an estimate for how much solar panels would cost for your home, plus the break-even time, using The Eco Experts calculator

If you can afford the initial costs, and you won’t be moving anytime soon, it can be worth installing solar panels. In the long run, you will bear the benefits of £100s off your energy bills and will also lower your carbon footprint. 

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