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How Much Does A Solar Panel Installation Cost

In the last decade alone, the average cost of solar panels has reduced by 82%. Yes, you read that right: EIGHTY. TWO.

There are many reasons for this, from higher demand from home and business owners bringing the solar panel prices down, to better technology and more professionals being trained in installing solar panels, so installation costs can be reduced through healthy competition.

But installing solar panels still isn't exactly cheap. There is an upfront cost of solar panels that may put people off.

Today, though, we here at Skylamp Solar want to talk more about solar panel costs, so you can understand how much a solar panel system is likely to cost, but also how that may benefit you in terms of energy bills moving forward.

So, if you want to learn the true cost of solar panels, then join us below for an in-depth look!

Are Solar Panels Worth It In 2023 UK?

Working out if solar panels are worth it is always a personal decision only you and your household can make.

It is currently estimated that 4.1% of UK homes have solar panels installed. That means around 1.2 million households have decided that yes, solar panels are worth installing in the UK. But they have to weigh up certain things:


  • installation costs
  • maintenance costs
  • how much solar electricity they can realistically generate
  • roof space and the number of panels they can realistically fit


  • sale of excess energy
  • reduction of energy bills
  • use of green renewable energy technologies
  • any grants or schemes that reward the use of solar panels
  • will the reduction of electricity bills eventually negate solar panels' cost?

Below we'll explore all of these themes and more so you can decide for yourself.

How Much Does A Solar Panel Installation Cost

What Is The Average Solar Panel System Installation Cost?

The overall average cost of solar panels is around £4000-£11,000, but there are a number of factors affecting that which we will discuss below.

Solar panel cost will vary based on solar panel systems used, solar batteries, labour costs, and much more.

One of the biggest differences is the type of solar panel you choose...


The Different Types Of Solar Electricity

There are three main types of solar panel being used in the UK in 2023:

  • solar PV panels (most popular in the UK)
  • solar thermal panels (the oldest solar panel system)
  • solar hybrid panels (the latest solar panel system)

But what are the differences between them? And how much will each system cost to install? If you're desperate for solar power in your home, then read on to find out more.

What Is A Solar PV System?

A solar PV system, like most solar panels, works by capturing the sun's energy and turning it into renewable energy and electricity you can use in your home. They don't need direct sunlight to function properly, and even a cloudy day will see your electricity bill significantly reduced.

A solar PV system needs multiple solar panels to function, but the number you choose is up to you.

Ranging from a 3kW (kW = kilowatt hour) solar panel system (with 12 panels on average) to a 6kW system (with 24 panels on average) you can select what works best for you, your house, and your roof space.

What Is A Thermal Solar System?

A solar thermal system works very similar to the PV system above, except there is water in the solar panels which is heated and stored in a hot water cylinder to be used to heat your home (reducing energy bills and the demand you place on your energy supplier) and to be used for showering, etc.

Here, less solar panels are required for the system to be effective, usually only 2 or 3 on a standard 3 bedroom home in the UK. But you'll also need to factor in the cost of the hot water cylinder for storing the hot water the solar panels produce.

Solar Thermal

What Is A Hybrid Solar System?

A hybrid solar panel system is, essentially, the other 2 combined. It can generate electricity like the PV system, and produce hot water like the thermal system, meaning you SIGNIFICANTLY reduce your demand on the national energy grid, water company, and energy suppliers generally.

Although you essentially combine the thermal and PV systems, you will still need to install several solar panels on your roof depending on your household's annual electricity usage and hot water usage.

The initial cost is greatly increased here because these solar panel installations require specialist organisations to install solar panels of this kind due to the more complicated technologies involved.

Hybrid Solar

How Much Do The Different Solar Panels Cost?

Installing solar panels of any kind will, of course, come at a cost - there's no such thing as free solar panels - but just how different are the prices for each system?

Average Cost Of Solar PV

The average cost of a PV system is usually around £5500 for a 3kW panel installation with 12 solar panels.

Average Cost Of Thermal Solar

The average cost of a thermal system is usually around £4000-£7000 with a 200-300 litre hot water cylinder and three solar panels.

Average Cost Of Hybrid Solar

The average cost of a hybrid system is usually around £10,000 for a 4kW system. Some experts argue that whilst it will save money on installation costs, sometimes opting for the two separate systems is advised for performance. Speak to your solar panel installer to determine what's right for you.

How Much Electricity Do Solar Panels Generate?

Of course, one of the main reasons for solar panels is the electricity generated from it. The thermal system alone doesn't generate any electricity, but solar and hybrid systems do.

Here's how much electricity is typically generated by each:

A 3kW PV solar panel system will generate around 3250kWh of electricity per year.

A 4kW hybrid system will generate around 4000kWh of electricity per year (and 2000Wh of heat).

The average UK household, according to almost every electricity supplier, will use around 2900kWh of electricity per year, so the energy produced by both systems covers it well. For high users of electricity, a household can use around 4300kWh per year, so a bigger system may be needed if you're a high energy using household.

The Solar panel

How Much Money Will I Save On Electricity Bills?

For a 3kW PV system, you will make electricity bill savings of around £850 per year.

For a 4kW hybrid system, you will make energy bill savings of around £1150 per year (approximately £1000 per year on electricity and £150 on heat and water).

For a thermal system, energy bill savings of around £250 per year is common.

All of this will change based on the size of the solar panel system, the type of system you have, and the amount of energy you produce. The more electricity produced, the more money you can save.

In fact, excess electricity might even turn into a moneymaker for you...

Can I Sell Energy Back To The National Grid?


However, there are a few things you need in order to do so.

First, in addition to the solar panel installation cost, you'll need to pay for a solar battery storage system. This solar battery storage allows you to keep the additional energy you produce to then sell it back to your energy supplier/the national grid for others to use.

The energy supplier will pay for exported electricity and it can be quite lucrative depending on the amount of excess electricity generated.

Feed-In Tariff Vs Smart Export Guarantee

Prior to March 2019, a scheme known as the feed-in tariff needed to be joined in order for you to sell energy back to suppliers for a profit. The feed-in tariff scheme has closed to new applicants, but if you're still part of the scheme, you can continue with it as normal. There is no need to change to the new method of selling energy that you produce at home yet.

In its place, the smart export guarantee (SEG) was launched. The smart export guarantee (SEG) works in exactly the same way - the more electricity you create, the more energy companies will pay for the surplus.

Smart export guarantee payments will be determined by your energy provider and may be affected by things such as the energy price cap at any given time - pushing payments up or down accordingly.

To apply for the SEG, you'll need your microgeneration certification scheme (MCS) certificate and a metre that's capable of reading the amount of energy you export.

You can find more information by looking into the smart export guarantee scheme online.

Are Labour Costs Included In Solar Panel Installation Cost?

If you ask most solar panel installation experts 'How much do solar panels cost?' they'll typically give you a price that includes labour costs.

However, not all solar panel installation companies are the same.

Some will break down the costs separately. If this is the case, it's best to work out how much it will cost you to install solar panels with that specific company.

Our advice? Check before you give the green light. You should ALWAYS know roughly the overall solar panel cost so you know the total for the solar installation.

Factors Affecting The Overall Cost Of Solar Panels

Whilst we here at Skylamp Solar have been able to provide you with average solar panel costs today, there are several factors that can affect the number you ultimately pay.

Number Of Panels

First, the number of panels you install as part of your system. Of course, the solar panel fitters will ask one question before deciding on the number of panels: 'Is your roof suitable for the number of panels requested?'.

Depending on how many panels are suitable, the number of panels you need in the system to achieve the savings you're hoping for with solar energy UK, and how much energy you require for your home - the cost will increase or decrease accordingly.

Related post: How many solar panels do I need?

The more panels you need, the higher the installation costs.

Type Of Panels

We've already talked about the type of systems you can opt for and how that will affect price, but there are different types of panels too.

Some houses might be better suited to solar roof tiles rather than panels (but these are significantly more expensive), for example.

Whoever is fitting your solar panels will be able to discuss solar panel prices (they differ per company and deals can be found by shopping around) and the overall solar panel costs associated with having your solar panels fitted with them.


Location is another important factor to consider. As a rule, solar panel costs are greater the further south you go in the UK. That's just part of the cost of living disparity that's common in the UK.

Depending where you're located, you might spend more or less on solar panels and the installation costs.

Another aspect to consider is the location of the solar panels you would like installing. Of course, you'll typically have them fitted on your roof typically, but how difficult it is to access your roof could increase the overall cost.

For example, a complicated roof space might require:

  • additional workers
  • scaffolding
  • unique placement of solar panels
  • etc

Where this happens, you can expect to pay more too.

So, the location of both your solar panels and your house itself can seriously impact upon the price you pay.

Any Added Extras

Added extras, like the solar battery storage system we discussed earlier, will, again, come at a greater cost.

If you opt for a thermal system, then you might want a larger hot water cylinder to store the heated water your solar panels produce. Again, this will cost more.

When deciding on your solar installation, consider these additional costs because it can seriously increase the final amount you pay, and it can come as a surprise for many people.

Work with a reputable business and make sure you know the likely final cost upfront before starting work, so you can be sure that you're happy with the price you're about to pay.

Are There Any Solar Panel Grants That Can Help Me Cover The Cost?

In the strictest sense of the term 'grant', no there are no grants in the UK in 2023 to cover the cost of solar panels for homeowners.

HOWEVER, the UK government has removed VAT on all solar panel costs, including installation, meaning the overall cost of solar panels and their installation is 20% cheaper.

This move allows everybody to reduce their carbon footprint, save money on bills, and potentially earn additional money from their own energy sold through the SEG much easier, by making solar panels cheaper overall.

What does this mean for you?

It means that there will still be a large initial cost to cover solar panel installation at home. But it could still be an investment worth making...

Solar Panel

Will Solar Panels Eventually Pay For Themselves?

Absolutely. On average (not taking into account the system type - PV vs thermal vs hybrid - or the amount of solar energy produced), most solar panels will pay for themselves in bill savings in 10-15 years. This of course depends on the smart export guarantee rates.

The average lifespan of a solar panel is 25 years. That means ultimately, you will save more money than you ever spend on solar panels.

Let's look at our examples from earlier:

  • A 3kW PV system costing £5500 to install and saving £850 per year in bills will be paid for in approximately 6 and a half years.
  • A thermal system costing £4000 and saving £250 per year in bills will be paid for in approximately 16 years.
  • A 4kW hybrid system costing £10,000 and saving £1150 per year in bills will be paid for in approximately 8 and a half years.

Whichever option you choose, you will eventually make your money back and then some. The issue for many people is being able to save up enough to make the initial investment.

Are There Any Maintenance Costs For Solar Panels?

Not particularly.

It's possible to maintain your solar panels yourself. They simply need cleaning once a year, and if it's safe for you to access your roof to do it yourself, then the whole process could cost around £10 a panel.

Hiring solar panel cleaners will cost slightly more. But overall, maintenance costs are VERY low.

CONCLUSION: How Much Will A Solar Panel Installation Cost And Is It Worth It?

Depending on the solar panel system you choose, the number of panels, and other factors affecting the cost of installation, you can expect to pay somewhere between £4000 and £11,000 - some people may pay slightly less or more.

Given that most solar panels pay for themselves within 10-15 years, it makes sense to invest if you're able to. It's better for the planet, it's better for your annual bills, and ultimately it's better for your bank balance long term. We would always say the initial cost is worth it long term.

Here at Skylamp Solar, we definitely recommend solar panel installation if it's something you're able to afford. But like we said at the start of today's post, only you can make that decision for yourself and your household. So the important question isn't whether we think it's worth it, the important question is whether you do.

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