Solar panels – are they worth it?

This guide doesn't constitute legal advice tailored to your individual circumstances. If you act on it, you do so at your own risk. Thanks to trade association Solar Energy UK, and solar specialists GB Solar and The Eco Experts, for their feedback on this guide.

How do solar panels work?

Solar panel jargon explained

If you're looking to get solar panels, you'll likely come across lots of unfamiliar terms. To help, we've explained some of the key terms you might hear...

Thinking of getting solar panels? Here's what you need to know

As the price of energy has rocketed, generating solar energy and using it yourself can mean bigger savings. But the payback period is still several years for most households, so you need to do the maths yourself.

Whether you're looking to save on electricity bills, generate your own energy, reduce your carbon footprint, or all of the above, there's a lot to consider when getting solar panels installed. Here are the main points you need to know.

1. Solar panels come with hefty upfront costs - about £6,100 on average

   While solar panels can you give you savings on your electricity bills and you can get paid for energy you export, the key thing you'll need to consider is the upfront costs of installation.

   According to the Energy Saving Trust, a typical 3.5 kilowatt-peak PV solar panel system is about £6,100, through prices will vary depending on the size of your system, your installer and your location.

   Yet if you've got savings you can use to pay for the panels (it's unlikely to be worth borrowing for solar panels, as the loan's interest could wipe out savings and extend the break-even point) it's worth doing the numbers for yourself.

2. You could save up to £350 a year on your bills by using what you generate

   First and foremost, you can use the electricity your panels generate, and so reduce your bills. Savings depend on system size, your electricity use and whether you're at home during the day to use the energy you're producing.

   But based on Energy Saving Trust estimates, a typical household with a 3.5 kilowatt-peak system can knock between £190 and £350 a year off bills at current Energy Price Cap rates.

   

3. You'll need an 'export' tariff to get paid for what you don't use - but be aware rates differ massively

   The Smart Export Guarantee (SEG) scheme pays you for each kilowatt hour (kWh) of electricity that your solar panels generate, and then export back to grid.

   The amount you can earn will depend on how much of your solar-generated electricity you use yourself, as the more you use, the less you have to sell.

   It also depends on your provider, as rates can range from just 1p per kWh to 30p per kWh – so make sure you go for the best paying tariff you can. See how to get the best solar export rates for full info.

   To get a SEG tariff you must ensure...

   • You have a working smart meter. As your energy provider will need to be able to accurately record how much you export. A smart meter also helps you track your energy usage and solar generation.

   • Your solar panel system and installer is 'MCS' certified. Your system and the installer must meet the standards of the Microgeneration Certification Scheme (MCS). It's also worth making sure the installer is a member of the Renewable Energy Consumer Code or Home Insulation and Energy Systems Quality Assured Contractors Scheme (HIES).

4. The break-even point is at least 10 years

   The price of a typical 3.5 kilowatt-peak PV solar panel system is about £6,100. Based on the Energy Saving Trust's figures, it could take a typical home at least 10 years to recoup the costs of installing panels, based on current Energy Price Cap rates.
   

   Energy Saving Trust's solar panel calculator

   Plug your details into the Energy Saving Trust's solar panel calculator for a decent estimate of how long it'll take to break even.

   Note: It is an estimate. The cost of energy and what you're paid for exported energy can change. This calculator is based on the current Energy Price Cap rate of 25.8p/kWh and a Smart Export Guarantee rate of 12p/kWh.

   Solar panel calculator

   Your break even point depends on where you live and how much you use or export

   For a rough estimate of how long it'll take to break even, see our table below. But be aware, a combination of factors will determine how quickly you'll recoup your outlay:

   • How much you'll save or earn depends on where you live. In general, the further south you live, the greater the bill savings you can make. That's because it's all about daylight, not hours of sunshine or temperature. Northern homes get slightly less, so where you live needs to be factored in.

   • If you're at home all day, it would take you less time to make your money back. This is all about how much electricity you're using. If you're home all day, you're using more electricity while your panels are generating energy, so bill savings are greater - and though you'll export less, the bill savings currently outweigh this.
     
     If you're only at home in the evening, the reverse is true - you get lower bill savings, but higher SEG payments from exporting more. The range in our table below is based on whether you're at home all day or not.
     

   How long it will take to break even

   Location	Annual bill saving	Annual SEG payments	Total annual benefit	Time to break even
   London	£185- £322	£288 - £370	£555 - £610	10-11 years
   Cardiff	£211 - £351	£467 - £547	£758 - £819	10-11 years
   Edinburgh	£189 - £259	£172 - £215	£403 - £431	12-13 years

   Electricity bill savings based on Ofgem typical use 2700kWh/year on July Price Cap rate for each region and Smart Export Guarantee payment rate of 15p/kWh. Grid electricity consumed and amount exported is estimated using Energy Saving Trust's solar energy calculator. No maintenance or repair costs are included. Assumes no electric heating or heat pump.

   However, this assumes the SEG will be available for the next 10+ years. While there are no plans for the scheme to end anytime soon, there's also no guarantee the scheme will last this long.

5. To max your savings, use most of your electricity while you're generating it

   While you currently pay roughly 26p per kWh for electricity on a standard tariff under the July Price Cap, most will likely get paid quite a bit less than this for the energy you don't use yourself and sell back to the grid.

   So try to shift as much of your electricity use as possible to when you're generating it (in other words, in daylight hours), as unless you have a solar battery, you're unable to store it to use later.

   While it means you'll be exporting less, so will get paid less, overall you'll be a lot better off, as you won't be paying for as much pricey energy.

   For tons more top tips from solar nerds, read the MSE Forum's Make the most of solar panels thread.

6. A solar battery could add years to your break even point

   

   A solar battery can store any excess power generated by your solar panels that you don't use at the time, rather than exporting it back to the grid. The Eco Experts estimate the average price to be around £4,500.

   The price you're paid for each unit of energy you export to the grid is usually much lower than the price you pay your supplier for electricity. So, economically, it makes more sense to store the solar energy and use it yourself. For full info on solar batteries, see our Is solar battery storage worth it? guide.

7. Not all homes are suitable for solar panels

   To maximise what your panels can make, it's best to make sure your home is right for them:

   • North-facing roofs aren't a great option for solar panels. As they get very little direct sunlight. You'll get the maximum benefit if you have a south-facing roof. East or west-facing roofs can also work well, but you might not get the maximum savings.

   • Your roof should be unshaded between 10am and 4pm. While some early or late shading from other buildings or trees is OK, during the peak period for daylight you want the panels to be out of any shade.

   • You need a fair bit of space. Solar panels typically take up two square metres each, so the size of your roof matters. 

   • Your roof needs to be in good condition. Make sure you've had an inspection carried out to ensure your roof isn't damaged, as this could affect the installation.

   • It's best to have a diagonal roof to catch the most rays. If you want to install panels on a flat roof it could cost more, as you may need fixings to hold the panels in place.

   • You generally won't need planning permission. In England and Wales, the Government's Planning Portal says that panels are likely to be considered as 'permitted development' – meaning you don't usually need to apply for planning permission.
     
     The big exceptions are if your property is listed or is in a conservation area. In these cases, you might need to get approval from your council's building control team, so check with your local authority.

8. If you're likely to move home in the next decade, it probably doesn't add up

   

   As it typically takes about 10 years to recoup your installation costs, if you're considering moving, solar panels probably aren't worth it (though it can push up the value of your home).

   While you could technically physically remove the panels from your old home and install them on the new one, this could prove costly and likely won't be worth it as you wouldn't get paid for what you export. To receive payments, your panels need to be certified by the Microgeneration Certification Scheme and it told us it wouldn't certify panels that have been moved.

   Solar panel installations are also tailored to each home – to fit the roof and be positioned to maximise the level of sunlight they receive – so it's likely they wouldn't perform as well if you installed them on a different home anyway.

   Generally speaking, solar panels are typically covered under standard buildings insurance policies for damage, such as storm, fire, and some even cover glass breakage. Solar panels are also typically covered by a manufacturer warranty, so if you do notice a fault, you should first contact the company that installed them before going to your insurer.
   

   If you don't yet have solar panels but are looking to get them, tell your insurer before you get them fitted to make sure they have no concerns regarding the works going ahead.

   Are solar panels covered by home insurance?

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9. Don't assume you'll always recoup the cost of solar panels on your home's value if you sell your house

   Some people assume that a more efficient home generating its own energy would be more attractive to buyers. But others worry that 'ugly' panels plastered all over their roof could push the price of their house down. 

   Solar panels are a hefty investment and might not be suited to those planning to move in the next few years – certainly you shouldn't expect a big upfront investment to be immediately reflected by a jump in your home's value.

   Do solar panels increase home value?

   Trade body Solar Energy UK recently published a report which found homeowners who move having had panels installed would claw back some of the value of their investment in a higher sale price.

   It looked at more than five million property transactions and said a typical home with solar panels could increase in price by up to 2%. Others, such as The Eco Experts, say solar panels could increase a property's value by as much as 14% on average.

   When we asked NAEA Propertymark (the National Association of Estate Agents) for an overview, it was more cagey. It said: "Having such sustainable technologies will become more attractive for homeowners in the future. There are benefits to having solar panels – however, in the short term, they don't provide an increase in house value, with the panels often costing more than they attribute in value.

   "With houses coming on to the market in short supply and other factors, people are being forced to compromise on their preferences, including energy saving measures."

10. You can still switch energy supplier

    If you have solar panels, don't think this locks you in to your energy provider – you can still switch your supplier. You can do a bespoke full market comparison or see what's available in our Should you fix? guide.

    Your energy provider doesn't need to be the same as the supplier that pays you for your solar-generated energy, so you're free to switch. Though with some providers, such as British Gas, EDF Energy and Octopus, you can get better export rates if it also supplies your energy.

    Plus, if you have other renewable tech, there are specialist tariffs for EV users or homes with a heat pump.

11. Solar panels can last around 25 years

    Solar panels have a life span of around 25 years or more, but this can vary depending on the type of panels and when they were installed. According to experts, some of the latest models of solar panels that are being installed could have a useful life of 40 years or more. Either way, their efficiency will begin to slowly decline after around 20 to 25 years.

    Most of the materials used to make solar panels are widely recycled, but there are some components that must be disposed of by a specialist and should never go to landfill.

    All solar panel manufacturers and importers in the UK are required to join a Producer Compliance Scheme (PCS), such as the Government-approved PV CYCLE. So once your solar panels have reached the end of their useful life, you need to ensure they're removed and recycled properly, through an approved scheme.

    Under EU regulations, your solar panel installer is legally obliged to take your obsolete solar panels off you at no cost – that's right, it shouldn't cost you a penny. They'll take your old panels to a designated collection facility before the panels go on to a recycling plant.

    Solar panels are recyclable

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    You don't need to pay for solar panels to be removed and recycled

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12. Solar panels are generally low maintenance

    Solar panels are designed to be low maintenance and we get enough rain in the UK to keep them working efficiently without the need for regular cleaning. It's a good idea to keep any nearby trees well-trimmed, to avoid shading your solar panels. Your installer should leave you with troubleshooting guides and maintenance guidelines.

    You can opt for bird deterrents, also known as 'pigeon-proofing', to be installed around your solar arrays to prevent birds from nesting under your panels. This is sometimes included in your installation price, but you may need to pay extra for it, so do check with your installer.
    
    The Energy Saving Trust says little maintenance is required on a properly installed, well-designed solar PV system, though you'll likely need to replace the inverter – a gadget that is a key part of the mechanism – within about 10 years (costing around £800).

    Of course, things can go wrong. If so, check the installer warranty you get – it can cover you for up to 20 years. If the panels are damaged by something unexpected, such as a storm, you may also be covered by buildings insurance – check with your insurer before you have them installed.

13. Watch out for scam ads offering cheap installation and maintenance

    We've heard numerous reports of scam emails and websites offering cheap solar panel installation and free health checks, so do be careful.
    
    It's important you do your research and use a reputable company before getting solar panels fitted and once you've got them, don't fall for ads trying to sell you solar panel servicing or cleaning.

How to buy solar panels

If you’ve decided solar panels are right for you, there are two main options when choosing how to buy: find an installer or go through your energy supplier. Plus, there's funding available for some households.

Option 1: Find registered installers and get three quotes

As we're MoneySavers, not electricians, picking solar panel installers isn't our speciality. But a good place to start is the Federation of Master Builders tool below (the FMB is a trade association for the construction industry). It works with selected solar panel installers, which have nationwide coverage, are certified, and are subject to certain customer service and financial security checks.

As always, get at least three quotes, and get 'em in writing. When comparing quotes, check the following are included: scaffolding, removal of the existing roof and other roofing works, internal wiring works, sorting out a connection agreement with the energy supplier, electrical connection work, and a generation meter.

Once they're fitted, registering your panels is a must – you'll need an MCS certificate, which you'll use to register for Smart Export Guarantee payments with a licensed energy supplier.

Option 2: Buy solar panels through an energy supplier, who then might give you preferential export rates

Most of the big name energy providers offer ways for you to buy solar panels through them. They generally have partnerships with installers, credit brokers and lenders.

Some suppliers offer financing options (through their partnerships with credit brokers), like 0% interest for up to three years, which can make buying solar panels more affordable without the upfront costs. But don't go for it just for the 0% financing - you need to compare quotes with independent reputable MCS-certified installers to see if it's actually a good deal.

As well as financing options, most energy suppliers will often give you preferential export rates if you choose to buy your solar panels through them.

If you choose to pay for panels on finance, make sure the interest doesn't outweigh the savings

Some installers let you buy solar panels on credit, through finance agreements. While many offer interest-free finance, some don't. So make sure you check the terms, as the interest charged could dwarf the savings.

It's possible to get solar panels through a subscription

There are a small number of firms offering solar panels on subscription. This is a more complex way of getting solar panels - so you need to make sure it's right for you.

Here, you pay for solar panels over a set period, say 20 years. There are no (or little) upfront costs, and instead you pay a fixed monthly fee, which usually covers the solar panel and battery installation, repairs and maintenance. Yet it can make things more complicated if you're looking to sell your home.

So it's always worth checking the terms of the agreement before signing so you know what to expect.

There's funding available for some households to get solar panels

There's help available to get solar panels installed in your home, but you usually need to be on certain benefits or have a low income to be eligible. What each scheme offers, and its eligibility criteria varies:

• The Energy Company Obligation (ECO) scheme. If you live in England or Wales, under the ECO scheme you can get up to £14,000 towards energy-saving initiatives if your home qualifies, including solar panel systems. To qualify, you'll need to meet specific criteria, including having a household income of less than £31,000 a year or be receiving certain benefits, plus your home must have electric heating.

• Warm Homes: Local Grant in England. You could get free energy saving improvements made to your home if you’re on a low income, getting certain benefits or living in a certain postcode area. This could include solar panels, as well as other energy-efficiency measures. It's only available to certain postcodes in England, and you need to apply through your local council. You can check if you're eligible in our guide, and if you are, your local council will usually contact you within 10 working days to get more information and arrange a home survey.

• Warmer Home Nest Scheme Wales. The Welsh Government initiative offers free energy-saving home improvements, including solar panels. You may be eligible if you own or privately rent a home that's expensive to heat, and you or someone you live with receives a means-tested benefit OR has a chronic respiratory, circulatory or mental health condition. You can check full eligibility details on the Nest Scheme website.

There are no grants available for solar panels if you live in Northern Ireland or Scotland.