Are solar panels worth it? Generate your own energy and slash your heating bills

Energy bills are climbing. Could a roof full of solar panels be the answer? They can power your home all year round and shave hundreds of pounds off your bills for decades. But with upfront costs in the thousands, are solar panels worth it?

The short answer is yes. Solar panels can cut 90% off your energy bills, and that proportion is growing as gas bills rise. No wonder installations have risen by 45% in the last three years, and shot up by 80% in the last year alone.

But solar panels are an investment. The average UK solar PV (photovoltaic) system costs £5,000 and takes ten years to pay for itself. But it slashes your bills for many years after that. And with solar panel prices falling, there’s never been a better time to buy.

Below, we’ll explain how solar panels cut your bills by generating renewable energy for your home, and reveal what you can expect to pay for a system.

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Are solar panels worth it? Everything you need to know

How do solar panels work?

Solar panels use semiconductor technology to capture the sun’s energy, then convert it into electricity that can heat and power your home.

This solar energy is collected all year round, including when it’s cloudy. But as you’d expect, brighter sunshine means more solar power (around 355W of energy per panel in strong sunlight), so you’ll get the best out of solar panels if your roof faces south and you’re not overshadowed by trees, tower blocks or next door’s giant loft conversion.

Typical modern systems contain six or more PV panels, which produce direct current (DC) electricity. The electricity used for household appliances is alternating current (AC), so the system includes an inverter to convert DC to AC, which you can use to power everything from kettles to washing machines. Anything you don’t use can be exported to the National Grid.

How much energy do solar panels generate?

A well-sited 3.5kWp (kilowatt “peak” power output) system could generate over 3,000kWh per year. That’s almost as much electricity as the typical household would use. If you need any more, your supplier will provide it from the grid as usual.

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The Energy Saving Trust (EST) has a Solar Energy Calculator that reveals precisely how much energy you could generate from panels on your roof, and how this will affect your bills depending on your current usage.

Here are a few ways for you (and your installer) to soup up your solar and maximise the return on your investment:

• Put the system in the best place, facing between southeast and southwest
• Angle your panels between 30 and 50 degrees from horizontal
• Consider investing in a solar diverter, which heats up your water when the sun shines

Can I earn money from solar panels?

Savings on bills are the biggest return on investment you’ll see from solar panels. But according to the EST, you can make those savings “considerably higher” if you sign up to the Smart Export Guarantee (SEG). The SEG, which replaced the old FIT (Feed-In Tariff) scheme in January 2020, donates your excess energy to the grid for other people to use, and pays you for it by reducing your bills even further.

The SEG only gives you 15p per kWh maximum, but that adds up to an average £73/year off your bill, according to The Eco Experts. Energy provider E.ON estimates the saving as a little less, around £45/year.

If you invest in a battery for your solar panel system, you can store your excess energy for you to use later on, slicing even more off your bills (around £150-£200, depending on whom you ask). But batteries add thousands to the price of your solar panel system (from £2,574 from E.ON), so they’re a long-term investment, too. Which takes us to the meat of the matter…

How much do solar panels cost?

Solar panels are among the few things to get cheaper in recent years, with prices falling by 88% since 2010, according to government figures.

The Energy Saving Trust says you should expect to pay around £4,000-£5,000 for a typical 3.5kWp system for a mid-terrace house with around 20m² of roof space.

Costs vary depending on:

• The size of your house and roof
• Your local area
• Which installer you go for (get at least three quotes)
• The type of panels you want

The cost you’re quoted should be a whole-system cost, including:

• Solar panels
• Panel mounting system
• Inverter
• Generation meter
• Scaffolding
• Cost of labour (this will be more if your roof is tricky to access)
• Cost of connecting and registering your panels

Some UK energy providers offer solar panel installations. If you’re already with one of these providers, it’s probably the best way to go.

Our favourite energy supplier Octopus Energy offers Solar & Battery Installation packages; use the online wizard to get your personalised quote. Octopus’s solar installations win awards, and give you extra cashback from excess energy under the Outgoing Octopus Export Tariff, which is more generous than the SEG. So they’d be the first provider we’d enquire with.

Ovo Energy, another above-average supplier, is planning to offer solar panel installations soon. You can register your interest now.

E.ON may not earn as warm a review from us as Octopus, but it does at least publish a few prices up front. The six-panel (2.34kWp) Enterprise solar panel system starts at £5,995. If your roof has some shading, go for the Optimise package, from £7,440. If you want your panels to look the business, the Enhance package fits them into your roof rather than on top, and costs from £8,431.

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EDF’s solar panel installation prices start from £6,450, and battery installations start from £4,995.

Alternatively, go to an independent solar installer such as Project Solar UK, which claims its systems can save you more than £20,000. Its Evolution Ultramax 345MB-66 solar panels are considered some of the best you can buy. Prices vary based on the size of your roof and location, but all solar panels come with lifetime warranties. You can even get £7,500 cashback for referrals.

How long will my solar panels last?

Once installed and working, you can expect your solar PV system to last for 25 years. It’s unlikely to need much maintenance during that time, or even cleaning, thanks to the cleansing power of rain water. 

The manufacturer’s warranty should cover any faults, but check this before agreeing to an installation.

The only thing you’re likely to need to replace is the inverter, which converts DC to AC electricity. These usually need replacing after 10-12 years, and will probably set you back up to £800 including labour. Some inverters have online monitoring functions that can send you a notification if anything goes wrong with the system, an extra feature that’s well worth having.