Are solar panels worth it and how much could you save?

Few people in the UK have been left unimpacted by the spiralling energy costs.

As part of the search for more economical energy consumption, many are turning to solar panels to generate power that is sustainable and cost-effective.

But are they worth it? Below, we weigh up the benefits and the cost of solar panels. 

There is no silver bullet to high energy prices. Paired with the general hike in the cost of living, the challenge of rising prices means many are seeking more cost-effective energy sources.

One option that has become increasingly attractive is solar panels.  

As a way of reducing costs and generating environmentally friendly energy, solar panels tick both boxes.

Significant reductions in their upfront cost mean that more homeowners than ever are using solar panels.

According to a 2024 report by Sunsave Energy, around 1.4 million UK homes have solar panel installations - that’s around 4.9% of all households. As we search for more money-saving tips, that number is likely to increase even further. 

What are solar panels and how do they work?   

Solar panels are also known as photovoltaic panels (PV panels). They capture energy from the sun and convert it into electricity that can be used in your home. 

The panels don’t need direct sunlight to generate electricity, but they generate more electricity depending on the strength of the sunshine.

Since household appliances generally use ‘alternating current’ electricity, the installation of a solar PV system will likely require an inverter to convert the generated electricity. It can either be used in your home or exported to the national energy grid.   

How much do solar panels cost?  

The upfront cost of solar panels remains a barrier to entry for some UK homeowners.

Sunsave Energy estimates that an installation of a 3kWh system on a standard two or three-bedroom home would cost £9,000 in 2024.

Of course, the figures can vary depending on things like house size and the amount of energy that a home needs to generate, but solar panels are seen as a long-term money saver – hence the acceptance of an extensive upfront cost.  

The good news is that the cost of solar panels is falling. Recent reports from the Financial Times highlight the cost of solar panels have fallen by 99% in a single generation making solar panels a more affordable option. 

Additionally, Government data suggests that between March 2023 and March 2024 alone, the average cost per kW for a 0-4kW solar panel has fallen by over 20%, making them more cost-effective than ever for today’s homeowners.

How long do solar panels last? 

Not only are solar panels a sustainable source of energy, they’re also long-lasting.

The life expectancy is estimated to be around 25-30 years, far outweighing that of a boiler, which has an average lifespan of 10-15 years.  

Solar panels also often have a limited power warranty of around 25 years; this warranty guarantees a power output of 90% for the first decade, and 80% over the 25-year lifetime.   

They won’t necessarily stop working after 25-30 years, either. Some modules have an expected lifespan of 40-50 years, but after the warranty period, the energy output is no longer guaranteed.   

How much energy do solar panels produce? 

A typical residential solar panel can produce between 250 and 400 watts per hour, while a domestic solar panel system should have a capacity of between 1kW and 4kW.

For context, the average household uses between eight to ten kW of energy per day, though this can differ depending on variables like the size of your home and how many people live there.   

What are the savings and financial benefits of solar panels? 

The ‘maths’ of solar panels is continuing to look more and more attractive to homeowners in the UK.

Energy bills are rising, while the cost of solar panel installation is decreasing, meaning their cost-efficiency is rising.

Arguably the biggest gain arises from solar panel owners being able to use what they generate.

These savings depend on size, but the Federation of Master Builders estimates that as of August 2024, the average UK household and three-bedroom home could expect to see savings of between £800 and £899 per year when taking into account the price cap rates of October 2022.  

Alongside the savings that you can make through energy generated from solar panels, you can also get paid for the energy you ‘export.’ The smart export guarantee (SEG) scheme offers households the opportunity to pump energy back into the national grid and get paid to do so.

Can I get a grant for solar panels? 

There is currently one solar panel grant available to support homeowners. The ECO4 grant is part of the government’s Energy Company Obligation (ECO) scheme which aims to help low-income households with upgrades for their homes and heating systems.

The grant, which started in July 2022 and ends in March 2026, is available to people that receive the benefits below:  

• Income-based Jobseekers Allowance (JSA) 

• Income-related Employment & Support Allowance (ESA)
• Income Support (IS)
• Pension Credit Guarantee
• Working Tax Credit (WTC)
• Child Tax Credits (CTC) 

• Universal Credit (UC)
• Housing Benefit
• Pension Credit
• Savings Credit    

However, the government also helps households with the purchase of solar panels with a VAT discount, allowing homeowners to pay zero per cent VAT on energy-saving materials.  

What are the main benefits of solar panels? 

The fundamental benefit of solar panels is that they enable homeowners to generate electricity from a free energy source.

Offering you energy all year round, they can help reduce your carbon footprint while reducing your electricity bills. Plus, they may increase the value of your property, and with the SEG scheme, you can actually make money from exporting the energy that you don’t use. 

The disadvantages of solar panels are mainly associated with the high upfront cost. However, they can also be cumbersome and take up a lot of space, which many people don’t have the luxury of – particularly if they live in a terraced house or a flat.

They are, of course, also weather dependent; so, take into account that on cloudy or rainy days, their efficiency may drop.  

Can I get solar panels? 

Unfortunately, not all houses in the UK are suitable for solar panels.

Generally, you need a south-facing roof for the panels to be fully beneficial; while southwest or west may still offer some benefit, they will not be optimised.

Your roof should also be unshaded between the hours of 10am and 4pm, since you need them fully exposed to sunlight during peak hours. Plus, the roof should be in good condition, and with enough space to house enough panels as your home requires.  

Although the specifications of your roof need to tick these boxes, you are unlikely to require planning permission for solar panels.

In England and Wales, the planning portal found on the government website states that panels are usually considered ‘permitted development’ – though there are exceptions, such as your home being listed in a conservation area.  

The other consideration isn’t necessarily whether you can, but whether it makes financial sense.

Generally, it’s considered that solar panels take between 10.7 and 13 years to recoup the upfront cost. While this may reduce in the face of higher energy bills, you should still consider carefully whether they are worth the money if you plan on moving home within this time frame.  

Get expert financial advice

While the average price of a 3kWh solar system installation on a standard two-bedroom or three-bedroom UK home is set at a notable sum of £9,000 in 2024, this initial investment could be paid off in just over a decade, supplying your family with clean, consistent and affordable solar energy thereafter. 

Let Unbiased match you with an expert financial adviser who can help you determine whether a solar energy system is the best solution for your home’s power needs and your financial future. 

If you found this article useful, you might also find out article all about smart meters informative, too.