Solar power and solar panels

Solar panels are now a common feature on UK roofs, allowing homeowners to generate their own power and benefit from the Solar Export Guarantee. Find out more.

Amy Smith
Amy Smith
Updated 3 October 2022  | 4 min read

Want to cut your energy bills and protect the environment? Over time, solar panels pay for themselves through cheaper energy bills.

Key points

  • Solar panels generate electricity using sunlight, saving on energy bills and making them a source of clean, renewable energy
  • A domestic solar power system costs £5,500 on average, depending on the size and install site
  • The new system for selling energy back to the grid is called the Solar Export Guarantee, it’s replaced feed-in tariffs

How do solar panels work?

Solar power converts energy from the sun into electricity using photovoltaic (PV) cells. Solar panels packed with PV cells are mounted on roofs or walls to catch sunlight. A pitched roof in a sport that gets a lot of sun works best.

The electricity passes through a solar inverter to change it from alternating current (AC) to direct current (DC) which can be used within the home.

If solar panels produce more electricity than you use, you can feed the excess back into the grid, and get paid for it.

Use of solar panels in the UK

In the last few months of 2022, 41.4% of UK electricity was generated by renewable sources. Solar panels broke the annual record with 112,000 new domestic solar panel installations and sunnier days accounting for the peak.

In 2022 13,921 MW of solar PV power was generated in the UK.[1]

Solar panel costs

The average cost of a 3.5kWp solar power system is £5,500. But price will vary depending on the nature of the site and size of the system.

Systems in sunnier locations will generate more power. If you're home all day and have a Smart Export Guarantee (SEG), the average system in London will save you around £610. The same system in Scotland would save you around £545.

Larger systems are more expensive to buy, but they work out more cost-effective in the long run by generating more power.

A solar power system should last 25 years or more, although the inverter may need to be replaced sooner than this at a cost of around £800.

Should I invest in solar panels?

A solar power system pays for itself in the long term through savings in your energy bill, with the potential to produce a profit by selling power to the grid. Solar power also gives you access to an independent energy source during power cuts, not to mention the satisfaction of knowing you are helping the environment.

The amount you save on bills each year will depend on how much electricity you use. People who are home during the day typically save more than people who are out throughout the day.

A system in Northern England or Wales would save around £580 a year for someone who is at home in the day and £325 a year for someone who is out until 6pm each day. In Northern Ireland, the savings would be £235 for someone at home and £95 for someone working outside the home.

Use the Energy Savings Trust’s solar energy calculator to see how solar power could work for you.

Battery systems are now available for use with solar panels, meaning energy can be stored for later use or sold to a supplier. The cost of a battery system can be a few thousand pounds, so it's a considerable investment.

Solar panels for your home

The best site for a solar panel is on a south-facing roof, for maximum exposure to the sun. Panels can be placed on less sunny sites or on walls, but the amount of power generated will be less.

As an alternative to solar panels, roof tiles with PV cells are available. These are typically more expensive but make less of an impact on the appearance of your home. Panels can be built into a roof, rather than mounted, but again this will cost more.

A reputable contractor will be able to advise you on the suitability of your home for a solar power system.

Solar panels and mortgages

While it's becoming more common to see homes with solar panels, some installation schemes require you to 'rent' your roof to the solar panel company for a set term - usually around 25 years.

This means the solar panels are installed for a low fee, or sometimes even for free, but the company then owns part of your roof for the agreed term. This can be a problem for some mortgage lenders as they won't lend on properties with leased solar panels.

Before committing to a solar panel installer, double check exactly what the scheme involves and speak to your mortgage provider too.

Solar panels - top tips

  1. Choose the sunniest site available

  2. Tilt solar panels at 15° or more so rainwater will clean them

  3. Have the system checked periodically to ensure it is running efficiently

  4. Monitor the system so you notice if generation drops, indicating a problem

  5. Keep nearby trees trimmed to avoid blocking sunlight to the panels

  6. If you plan to move in the near future, you may not recover your investment

  7. Check your home insurance before installing solar panels

  8. In most sites, solar panels are permitted development and will not need planning permission

  9. Sites with flat roofs or in conservation areas probably won’t be suitable

The Smart Export Guarantee

People with a solar power system used to be able to earn income through feed-in tariffs when they sold power back to the system.

In January 2020, this system was replaced with the Solar Export Guarantee (SEG) which requires energy suppliers to pay people for what they export to the grid. However, there is no set price for energy or how long payments will last - it varies between suppliers as they all set their own tariffs.

As solar power systems have become more widely available, the cost of installing them has fallen, and advances in technology and availability mean the price is likely to lower further. This could make solar power systems more attractive as an investment, even without gauranteed added income from exporting energy to the grid.

[1]Department for Business, Energy and Industrial Strategy (BEIS) Energy trends renewables tables (ODS), Q3 2020.