Solar Panel Costs: Price Guide 2020

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Solar panels have increasingly become a staple of both the environmentally conscious and the financially wise homeowner alike. Converting natural light into energy, they reduce the overall electricity you need to pull from the National Grid. This brings down your monthly energy bill and helps prevent the burning of fossil fuels at the same time. However, solar panel costs are another, more complicated story.

Installing solar panels can seem a complicated and daunting process. Prices of solar panels can vary greatly, depending on a variety of factors. The previous government scheme that paid you for using solar, the Feed-in Tariff, is now defunct too.

With all these things to contend with, it can be difficult to know where to start – or if you should start with solar panels at all.

Quotatis has put together this solar panel price guide to help you sort through the mountains of information you can find online. If you decide solar panels are right for you, fill out the contact form at the bottom of the page. We’ll then put you in touch with qualified tradesmen who can install solar panels for you.

Contents

  1. Uses for solar panels
  2. What is solar hot water?
  3. Types of solar hot water systems
  4. How does solar PV work?
  5. Types of solar PV
  6. How much energy do solar panels save?
  7. How much money can you make with solar panels?
  8. Installing solar panels
  9. How much do solar panels cost?
  10. Can I get free solar panels?
  11. Are solar panels getting cheaper or more expensive?
  12. Are solar panels worth it?

Uses for solar panels

The energy generated by collecting sunlight during the day can have multiple uses in the house. Solar panel systems tend to feed their energy into one of two things:

  1. Feeding electricity into the overall household, reducing the energy bill
  2. Powering heating systems specifically, reducing the hot water bill

As such, solar panels can form one of two main system types: solar panel electricity systems, otherwise referred to as solar photovoltaics (PV), and solar hot water or “thermal” systems. Both options are effective at saving you money year on year, with solar PV contributing slightly more to saving but also costing more initially.

The average cost of solar PV is around £6100 to £6300 of the typical household installation. Solar hot water, by comparison, usually costs an average of £3000 to £5000 depending on the household. This price guide will cover both versions of solar panel installations, starting with solar hot water and then moving on to solar PV systems.

What is solar hot water?

Solar hot water systems, often dubbed “solar thermal systems”, absorb sunlight and convert it into heat for your hot water supply. The usual daily output is such that on sunny days a solar thermal system can supply your hot water for the day. On less sunny days, throughout the winter months for example, the output will only be able to support your existing heating usage.

Even if solar panels produce enough energy to make the use of a boiler redundant, the heating system still needs to be in place. This is because solar thermal works by using the collected solar energy to heat the contents of an existing hot water storage cylinder.

Types of solar hot water systems

There are two types of solar thermal systems, and two types of solar collector. The first type of thermal system is an ‘open-loop’ or ‘direct’ system. This is where the water in the panels themselves is heated and then transferred to the domestic storage cylinder. The danger of this is that the pipes can potentially freeze overheat because of the water in them. As a result, direct systems are uncommon to see in the UK.

More widely adopted is the ‘indirect’ system. This is where the liquid in the solar panel system is not the same as the liquid in the domestic heating unit. Inside the solar panel pipes is water mixed with antifreeze, to avoid the problems prevalent in ‘direct’ systems. Instead, solar panels transfer heat to the home heating system via copper coil.

Solar collectors, on the other hand, are the mechanisms which actually absorb solar energy. These are: flat plate and evacuated tube.

Flat plate

Flat plate collectors are small, darkly coloured boxes that feed solar energy from the solar panels into the home through internal pipes.

Evacuated tube

solar panel costs thermal evacuated tubes

These collectors are constituted of a group of glass tubes. Within each of these tubes is a vacuum that keeps heat loss from the collector as low as possible. This is very effective in areas with less heat generally, such as the north of England. Liquid isn’t circulated through the tubes themselves – instead, a heat exchanger passes the heat from the tubes to the home heating system.

Evacuated tubes are the more commonly installed option these days. While they are more expensive, they are also more efficient, and therefore more likely to help you recoup your initial investment on your solar panel installation.

How does solar PV work?

Solar panels are, in effect, sheets of hundreds photovoltaic cells. PV cells are often made from a semi-conductive material like silicon. This is due to its affordability and reliability when it comes to holding electrical charge for many years.

The core property of these cells is that they absorb sunlight and convert that solar energy into electricity. More specifically, the way they work is that when photons from the sunlight encounter the panel, the cells activate and create an electrical field. The greater the number of photons that meet the cells (meaning, the more intense the sunlight) the larger the electrical field that’s supplied to the home. 

Type of solar PV

So far, there have been 3 generations of solar panels developed. Throughout these generations, solar installations have branched into single-junction and multiple-junction arrays too. The nature of the junctions determines how many layers of solar PV cells there are to absorb sunlight. The generation that a given solar panel belongs to, by contrast, determines how efficient and with what materials the solar panels are made from.

Given that 1st generation solar panels are no longer widely used, this price guide will focus on the 2nd generations or the market now. After that, we’ll take a quick look at the 3rd generation technology – the future of solar panels.

2nd generation solar panels

Thin-film solar cells (TFSC)

TFSCs work by laying photovoltaic film, often made from silicon, over an underlying layer. These are cheap to produce in vast quantities, which brings down the final solar panel cost to the consumer. More than most other options, these are a highly affordable choice for domestic use.

Other properties include a high melting point and heat resistance, meaning they aren’t damaged at high temperatures. They’re also flexible in both a literal and figurative sense, lending them to a wide variety of uses. They do have some drawbacks, however. TFSCs deteriorate faster than 1st generation solar panels, and as such their warranties expire quicker. Size is also a consideration, making the less suitable for smaller domestic spaces.  

Amorphous silicon solar cell (A-Si)

These solar panels use a triple-layered technology, which is arguably leading the market right now. They’re so thin that they’re only one millionth of a metre in depth, and they’re relatively cheap. The only issue comes in their efficiency – which is 7%, lower than the 18% of some 1st generation installations.

3rd generation solar panels

Most 3rd generation technology is currently still in development but researching where industry is headed can be helpful to gauge how you want to invest in renewable energy and whether you’d prefer to wait for newer, more efficient systems.

Biohybrid solar cell

Research is still under way on this product. The idea driving biohybrid solar panels is to replicate the way photosynthesis works but for technology. By marrying traditional solar panel systems with layers of photosystem 1 (a type of protein complex), companies can increase the efficiency of solar cells. Some studies have shown an increase of up to one thousand times the performance of 1st generation solar panels.

You can find further details about the technology in the Journal of Photochemistry and Photobiology, if you’d like to pour over the findings personally.

Cadmium Telluride solar cell (CdTe)

Rather than focusing on increasing efficiency, the addition of Cadmium Telluride is intended to dramatically lower production and sale costs. This will have the knock-on effect of shortening the payback time for the consumer to less than 12 months. Additionally, cells using Cadmium Telluride have a greatly reduced carbon footprint compared to their counterparts.

One key issue surrounding the new technology, however, is it can be toxic when ingested. While this is an unlikely occurrence, the potential dangers are currently preventing these products from passing smoothly through European regulatory boards.

Concentrated PV cell (CPV and HCPV)

solar panel costs curved parabolic

Of all the new options in development, CPV is the most like 2nd generation solar panels – at least in design philosophy. A multi-junction form of installation, the idea is that CPV cells will have an efficiency rating of 41%. This would be the highest efficiency score of any system so far, and by a considerable margin. Improvements in this area are due to new lenses, cooling systems and curved reflective surfaces that all work to retain sunlight better than previous versions.

The current challenge to these innovations come from the fact that these solar panels must be at perfectly angled towards the sun.

How much energy do solar panels save?

The goal of solar panel installations is to save you drawing as much energy from the National Grid as possible by supplementing it with solar energy. Energy output from solar panels is measure in kilowatts, with the overall installation having a specific kilowatt peak (or kWp). Throughout this price guide we’ll be referring to the cost of solar panels relative to an average of 4kWp. With this in mind, we can look at the average savings in kilowatt hours per year.

In the north of the UK, Scotland for example, a 4kWp system will generate 3400 kilowatt hours of electricity a year. This is equivalent to roughly 1.3 tonnes of carbon dioxide not polluting the environment. In the south of England however, a 4kWp installation will net 4200 kilowatt hours a year. This equates to 1.6 tonnes of carbon dioxide.

How much money can you make with solar panels?

For many years, homes that installed solar panels were able to benefit from the Feed-in Tariff scheme. This incentivised homeowners to install solar panels as doing so would allow them to earn extra money. Unfortunately, as of 31st March 2019 this scheme ceased to exist.

In its place are two alternative options for making extra income with solar panels, Smart Export Guarantee and selling back to the National Grid. These financial benefits are in addition to the savings you make on your monthly energy bills.

Reducing energy bills

The main incentive of installing solar panels is that they can reduce your annual spend on energy bills. Converting sunlight into a free source of energy not only saves around 1.3 to 1.6 tonnes of carbon per year but can save you hundreds of pounds each year.

Because the number of kilowatt hours generated by the solar panels is dependent on location, so are the savings they produce. Using an average price of £6200 for solar panels, the table below highlights how the location of your home affects your energy bill.

 

Average savings per year

Location

London

Manchester

Stirling

Electrical bill savings

£100 – £240

£95 – £230

£90 – £220

Years to repay investment

26 – 62

27 – 65

28 – 69

Smart Export Guarantee (SEG)

Solar panel owners used to be able to earn money through the Feed-in Tariff scheme, until it shut down on March 31st 2019. As a result, the incentives for installing solar panels become negligible for a time. However, the government have now introduced a new scheme entitled the Smart Export Guarantee (SEG) which will replace the Feed-in Tariff.

Ministers presented plans for the scheme to parliament on June 10th 2019, and as of 2020 are being implemented nationwide.

The government stated the aim of the SEG is as follows:

‘ensure small-scale electricity generators installing solar, wind or other forms of renewable generation with a capacity up to 5MW will be paid for each unit of electricity they sell to the grid – tracked by their smart meter’ according’

The SEG creates a legal requirement for energy companies with at least 150,000 consumers (over 90% of energy suppliers) to bring in export tariffs. Certain companies are even introducing smart tariffs which save customers even more than they are legally required to.

If you want to know more specific details, such as whether it covers other sources of renewable energy or how to apply for it, then you can find out more about the Smart Export Guarantee over at Ofgem.

Selling back to the National Grid

There is also an option to sell excess energy you generate, although “selling to the National Grid” is slightly inaccurate. While you must have a connection to the National Grid, you sell the excess energy your solar panels produce to a utility company.

Recent legislation requires utility companies to source at least 10% of their electricity from renewable sources. As such, if your house is connected to the National Grid you can sell back energy to your own supplier for profit. There are a couple ways of doing this: net metering agreements and flat-rate generating payments.

If your solar panels are likely to generate more electricity than you need, then net metering is the more suitable option. First, you need to get a fully approved export meter added to your home. This will allow you to measure the surplus energy that you generate. Then you can start earning a premium for every unit of electricity produced that exceeds your household needs.

If your power generation is more intended as support for your existing needs then flat-rate payment might be more appropriate. While the payment per unit you receive may be lower, you earn money regardless of whether you sell it to the utility company or use it yourself.

Flat-rate payment operates differently depending on the organisation you’re selling to. However, the general idea is that you send your generation meter readings to your energy provider, and they calculate how much you’re owed. Micro-generation units (another term for solar panel installations) should come with generation meters pre-installed.

Installing solar panels

Before we cover the solar panel prices, it’s prudent to go over a few things you need to consider before you buy. The last thing you want to do is buy your solar panels only to discover you can’t install them. Solar panel costs aren’t the cheapest form of home renovation, so understanding the installation process is critical to saving as much money as you can.

Qualified tradespeople

solar panel costs installation

Solar panel installation can only be performed by a qualified electrician, and even then, they must have undergone further training. Solar photovoltaic (or solar VP) training is required before an electrician can safely install these appliances.

These PV projects must meet the 17th Edition IEE Wiring Regulations. They must also be set up in accordance with the Microgeneration Installation Standard MIS3002, issue 2.0, and comply with the Microgeneration Certification Scheme. Solar panels fall under the special installations classification of Part P of the Building Regulations. Once installed, they must undergo an inspection by the Building Control Body.

If you want as much detail as possible about these regulations, visit the Electrical Training Academy’s website for more.

All these standards and regulations show why it is essential to find a qualified electrician with experience and knowledge installing solar panels. Answer the form below this price guide and Quotatis will put you in touch with a selection of qualified tradesmen.

Geography

There are a few things to consider regarding how appropriate the location of your home is for solar panels. First, in order to get the most out of your installation, you’ll need a south-facing roof. It would also help maximise your energy intact if there are no tall trees nearby. If there are, shade may fall over the panels during certain hours and your potential savings will be reduced.

Second, if you live in the north of England you are likely to see lower savings than someone who lives in the south. While the difference is minimal, the south does see more daylight than the north. Over a period of months, the extra exposure will mean that southern homes see a greater return from solar panels.

Planning permission

While solar PV installation may be rigorously regulated, one area that is simple is planning permission. Planning portal, a government run website, classifies solar panels as permitted development. This means they don’t require planning permission to be added to a regular property.

Exceptions to this can include listed properties, or those that are in a conservation area, however. Flat roofs can also have this problem. In these cases, you may need to check with your local council to ensure you can build where you want.

How much do solar panels cost?

Solar panels can range in cost for an array of reasons, including:

  • Whether you’re installing a fully-fledged solar PV array, or just a solar-powered heating system
  • The size of the roof area you’ll be covering in solar tiles (in m2)
  • Peak system power (kWp)

Solar heating systems are, as the name suggests, more focused in their functionality. Their average can fall anywhere between £3000 to £5000, depending on how large the system is.

Otherwise, solar panel arrays are more expensive but can provide energy in a more flexible way to the home. The most common choice of installation can cost from £6000 to £9000 at the very highest end. 

Area on roof (m2)

System power (kWp)

Average cost

8m2

1 kWp

£1500-£3000

14m2

2 kWp

£3000-£4000

21m2

3 kWp

£4000-£6000

28m2

4 kWp

£6000-£9000

Can I get free solar panels?

You may have heard of people been given solar panels for free through certain schemes. However, while this was possible before, the opportunity no longer exists since the closure of the Feed-in Tariff. As of February 2020, there is no way under the new SEG scheme to redeem the same benefits.  

Are solar panels getting cheaper or more expensive?

Since 2011, solar panel prices have gotten considerably cheaper, with the UK government reporting up to a 50% drop in prices. Over the last couple years, price shifts have plateaued (but continue to fall slightly). In 2014, solar panel prices were at around £8500-£9500 for a system between 3.5-4kWp. By 2018 this had fallen to around £6600.

Of course, the prior existence of the Feed-in Tariff helped subsidise costs even more, although these subsidies dropped along with solar panel prices.

So while the prices of solar panels aren’t falling like they once were they aren’t getting more expensive. Additionally, with the introduction of the SEG you will once again be able to subsidise the cost of installation.

Are solar panels worth it?

Time until you break even

Depending on where you’re located, how much energy you’re able to save and initial cost, the time till break even can vary wildly. At the soonest, it will likely be a couple decades until your solar panels fully make their money back. At their longest it could take closer to 50 years.

Therefore, if you’re thinking of going solar make sure you’re prepared for it to be a long-term investment. Solar will be more appropriate if you plan on renting the property or keeping it in the family.

Solar panels can positively or negatively affect your home’s value

On one hand, there’s the obvious financial and environmental benefits to solar panels that raise your home’s value. Since the new owners won’t need to pay to install them either, one of the key downsides of solar panels – the large upfront costs – are negated.

On the other hand, many consider solar panels to be visually unappealing. So, depending on who’s looking to buy the property, they may be less inclined to pay as high a price.

Moreover, while it’s not a direct reduction of the home’s value, if you plan on moving soon after you install solar panels then you’re unlikely to see a return on investment. Bought and installed, the final cost of the technology is likely to be in the thousands, yet they won’t add thousands to the property’s value. Unless you’ve redeemed over a decade’s worth of savings from the panels before you move, losses may be significant.

Switching energy providers

You may expect there to be complications if you switch energy providers after installing solar panels, but this isn’t true. Adding solar panels to a property doesn’t complicate buying energy in the slightest. Feel free once they’re set up to shop around for the cheapest energy deals every year.

Quotatis also has an article on 5 other solar panel benefits that you may find helpful, if you’re still undecided on their effectiveness.

With all this in mind, hopefully you have a better idea of what the prices of solar panels would be for your home. If you’d like help in finding qualified electricians to install solar panels for you, fill out the form below. We’ll put you in touch with a multitude of professionals as soon as we can. 

 

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