Solar panel systems for your property starts at around £1,500 for a smaller system. The most advanced systems using the latest technology fitted to larger residential roofs may cost from £8,000 upwards. Although it’s still expensive, you would have had to pay at least double those prices as little as five or six years ago.
The cost of solar panels for homes has fallen for many consecutive years. Through a combination of massive government and private investment, increasing worldwide demand from consumers, and intense competition between manufacturers, homeowners keen to save money on their electricity bills and to help the environment have benefited greatly from the steep falls in price since 2010.
However, it’s a market which has changed beyond recognition with the abolition of the Feed In Tariffs earlier this year. In this article, we’ll consider:
- the general costs of solar panels,
- the number of panels you might need,
- how much it costs to install your solar panels,
- why there’s still lots for homeowners to get excited about with solar panels, and
- whether it’s still worth the financial investment.
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Solar panel for home
You can find solar panels not only on the roofs of people’s houses but also on the roofs of large factories, office complexes, shopping centres, and more. Perhaps the most surprising solar panel takeover has been the installation of vast farms on what used to be farmland because the subsidies that were previously available for solar panels made it more profitable than growing wheat or grazing cattle.
For homeowners whose system was installed from 1st April 2019 onwards, the current major financial benefit you will see is an ongoing and significant reduction in the amount you pay to your electricity company. Most installations prior to that benefitted from a government subsidy called the Feed In Tariff – we’ll cover this later in the article and what is likely to replace this incentive in the future.
Solar panel cost
Each solar panel to be fitted onto your roof will cost your supplier in the region of £380 to £505. The most modern panels have the ability to generate between 400 to 450 kWh of power. Solar panels generally occupy a space around 4m2 in size.
The more panels you fit on your roof, the higher the cost of installation but, at the same time, the amount of electricity you’ll generate will increase providing a deeper discount on the average size of electricity bill that you’d be expecting from your energy supplier.
|Installation size||Panels on your roof||Maximum power output in kWh||You’ll need to budget|
|Less than 14m2||8||2||£2,750 to £5,250|
|From 15m2 to 21m2||12||3||£4,750 to £6,250|
|22m2 or above||16||4||£5,750 to £8,350|
Most residential properties have between twelve and sixteen solar panels fitted to their roofs meaning that the range of costs you should expect to pay is from £4,750 to £8,350. What you actually pay depends on the base price of the solar panels specified by your installer, the amount of profit they want to make from their work, and your location in the country. If you’re in London or the South East, you should expect to pay towards the higher end of the estimates in the table above.
Solar panel installation costs
It was the falling cost of solar panels and their installations which caused so many UK homeowners to put off and put off making the purchase. They rightly thought that they would be paying more if they needed to if the trajectory of prices was constantly downwards.
However, this understandable course of action has led to an unfortunate outcome because the government removed the Feed In Tariff financial incentive scheme for new installations. The Feed In Tariff promised to pay homeowners tax-free money each year for 20 years after their new installation for the additional electricity they generated from their solar panels and on the electricity homeowners sold back to the grid.
The presence of the Feed In Tariff spurred over 700,000 homeowners to install solar panels on their roofs and its removal has sparked fears among both people in the industry and among environmentalists that its disappearance is a big mistake. Are they right? What does the future hold?
Solar energy UK – how you make your money
Will there be a replacement for the Feed In Tariff?
In their Control for Low Carbon Levies document published on 22nd November 2017, the government assumes that “there will be no new low-carbon electricity levies until 2025”. So, probably not. However, all hope is not actually lost…
The Smart Export Guarantee
One feature of the old Feed In Tariff scheme was the export levy – that was what the electricity companies paid you when you fed your surplus electricity back into the grid.
The main difference between the old export levy and the new Smart Export Guarantee was that electricity companies would now be free to bid for your surplus electricity rather than pay homeowners a mandated amount set by the government. In the increasing drive to become green, the Smart Export Guarantee offers under-pressure electricity firms a chance to increase their own production capacity by buying electricity from consumers rather than by building power stations.
When the scheme was first mooted, the fear was that even introducing a competitive bidding environment between electricity suppliers would not force the price they paid up to the old levels that homeowners enjoyed under the Feed In Tariff scheme.
Those fears proved correct. In June 2019, the Department for Business, Energy and Industrial Strategy (BEIS) published the guidelines for the new Smart Export Guarantee which come into force from the 1st January 2020. Under the Guarantee, any electricity supplier with more than 150,000 domestic customers must offer at least one export tariff to purchase homeowners’ surplus energy. No minimum price has been set by the government for what a supplier’s export tariff should be but it must be offered to domestic generators of electricity capacity of up to 5MW.
As with the Feed In Tariff scheme, homeowners must use a Microgeneration Certification Scheme-registered installer to complete the work and that company must register the installation with the government for it to qualify.
There is another really interesting development in the field of domestic solar panels too and that is…
You will doubtless have seen some of the major advances in electric cars in the last few years. Those advances have happened because of breakthroughs in the capacity of batteries which are now capable of storing much more energy than previously.
While the Smart Export Guarantee sounds attractive, electricity companies will buy the spare electricity you produce at a wholesale rate from you and then sell it to other homeowners at a retail rate. The real potential comes by attaching a battery to store the electricity your solar panels generate during off-peak hours and then using that power during those times when it is more expensive to buy electricity.
As solar panel technology improves, there is a genuine chance that many homeowners will become either completely energy self-sufficient or the electricity they draw from the grid is so minimal that, essentially, the get their electricity for free. How is that? Because the battery is someone’s home has so much capacity to store electricity that it can run a home for the day and be either fully or mainly topped up by solar energy on an ongoing basis.
How much can you actually earn every year with a solar panel installation?
Right now, it’s too soon to say. We’re excited about the possibilities offered by the Smart Export Guarantee and we think that it might, as it catches on, offer electricity providers an easy public relations victory if they fully take part in it as well as allowing them to sell more electricity without having to build new power stations and infrastructure, as we mentioned earlier in this article.
There is not yet however enough detail to flesh out what the Smart Export Guarantee will mean in pounds and pence to individual homeowners – please check back as more information becomes available and we’ll try to do a couple of costed examples for you.
Solar energy UK – are there any other costs?
Solar panel systems are designed to be low maintenance. It’s just as well given that they are fixed to homeowners’ rooves. No solar panel company owner wants to wake up to the news that one of their customers has seriously injured themselves by falling from a great height while trying to maintain their system.
There are companies who offer to maintain your solar panel system for a fixed fee every year – normally one or two hundred pounds. If your solar panel system breaks – a very rare occurrence – you will be covered by your manufacturer’s warranty.
Solar panel systems – is now the right time?
Solar panel systems are great for the environment and, although they’re not quite as self-financing as they once were, we think there is genuine reason for homeowners to be excited both about the Smart Export Guarantee and about the possibilities offered by high capacity smart batteries which are coming down rapidly in price.
Make sure you work with an MCS-certified professional when planning the right system for your property.