Are solar panels worth it in 2024?
They’re increasingly common, but are solar panels worth the outlay? Will they save money on your electricity bills and do they offer good value with other low carbon energy options available? Read on and we’ll explain everything you need to know about buying domestic solar panels and generating your own solar energy.
Key takeaways
The average cost of a 3.5kWp solar panel system in the UK is around £7,000, rising to £9,000 for a 5kWp system
It typically takes about 15 years to break even on the investment. But solar panels can increase property value and make homes more attractive to buyers
Annual savings on energy bills can range from £150 to £565, depending on energy consumption and reliance on the grid
The Smart Export Guarantee (SEG) allows homeowners to sell excess energy back to the grid, offering additional savings
Weighing up the cost of solar panels
In a world where renewable energy sources are becoming increasingly crucial, solar panels are often touted as a beacon of sustainability and lowering carbon emissions.
But as with any investment, it's essential to understand the costs and potential savings involved.
Here we'll take a look at the financial aspects of installing solar panels and whether they're a bright idea for your wallet.
The price of choosing solar energy
When considering solar panels, the first question for many homeowners is: How much will it cost?
The answer isn't one-size-fits-all, as the price tag is influenced by the size of your home and the system you choose.
Initial investment: how much do solar panels cost?
According to the Energy Saving Trust, the average solar panel system in the UK is 3.5kWp, with an overall average cost of £7,000.
That can rise to as much as £9,000 for a 5kWp system if you have a larger home. These figures represent the total cost, including the panels themselves and the installation costs, which can be substantial.
Specialist labour and necessary roof access, such as scaffolding, are additional expenses that must be factored into the budget.
Depending on your situation, there may be financing options you can take advantage of.
Long-term savings: A sunny outlook?
The upfront cost of solar panels is undeniably steep, but the long-term savings over the course of the system’s lifespan can be substantial.
On average, a home might take about 15 years to break even on their solar panel investment, including installation costs.
This detail is important as it sets realistic expectations for homeowners considering the switch to solar energy.
It’s also worth considering solar panels' value as a home improvement. Solar panels are attractive to potential new homeowners when you next sell your home, which can increase your property value as a result.
Renewable energy and SEG benefits
That might seem like a long time, but it’s worth remembering that solar panels can provide all of your energy needs, making your home potentially energy self-sufficient.
Additionally, you can take advantage of the government’s smart export guarantee (SEG). This allows you to sell back energy you don’t use to the National Grid.
The SEG replaced the more generous feed-in tariff, which paid solar panel owners a price for all the energy they generated, whether it was used by them or returned to the grid.
Comparing SEG deals
Different suppliers offer varying SEG deals, so it's advisable to compare options. Suppliers offer different prices for SEG deals, and it pays to shop around to find the best one for your needs.
For those who plan to stay in their homes for the long term and have the financial means, pairing solar panels with solar batteries can lead to significant savings, though it will extend the time to break even.
Value for money: are solar panel systems shining brighter?
Over the past decade, the cost of solar power has halved, making it a more attractive option for homeowners.
With gas prices on a rollercoaster and climate change concerns mounting, solar panels are expected to become even more cost-effective in the future.
Cutting down on energy bills with solar power
After installation, solar panels start saving you money on energy bills immediately. A standard 3.5kWp system mean annual savings between £150 and £565 each year, depending on your energy consumption, reliance on the grid, and current energy prices.
The range of savings provided depends on whether the system can offer all of your power or if you will need to pay for some from the National Grid.
Earning through SEG
If you are generating enough energy, you can sign up for a SEG tariff, which will see your supplier pay you for the excess energy that you generate, usually by taking money off your electricity bills in each payback period.
You can sign up via the government website and then decide on a supplier. You’ll also need an inverter as part of your solar panel system, as this is what converts solar energy into the AC electricity used by the grid.
The role of solar batteries in a solar panel system
Solar batteries are an additional investment that allows you to store surplus solar energy for later use or to sell back to the National Grid.
Starting at £4,000, solar batteries mean a longer time to break even when combined with the cost of solar panels.
However, for those aiming for energy self-sufficiency, they are a valuable addition to reduce reliance on the grid and lower bills further.
If you want to be eco-friendly and fully self-sufficient in terms of energy, solar battery storage is a great way to keep the energy you generate and slash bills in the process.
Compare solar panel providers and costs
Ready to take the leap into clean, sustainable energy? Our handy solar panel comparison page can help you find a solar panel system at a price that suits you.
For more ways to save on energy bills and increase your energy efficiency, read our energy saving tips.
