Guide
Are solar panels worth it in the UK? When they pay back
Solar panels earn their cost back over years, not months: a 4kW system costs £5,500 to £9,500 fitted, and the return comes from the electricity you stop buying plus export payments for what goes to the grid. Whether that is worth it depends on three numbers you can find before signing anything.
Where the money comes from
A solar system pays you in two ways. Every unit of electricity you generate and use yourself is a unit you do not buy, so it is worth whatever your tariff charges per kilowatt hour. Every unit you do not use goes to the grid and earns the export rate under the Smart Export Guarantee, which Ofgem requires certain suppliers to offer. The rate is set by each supplier and must always be above zero.
Those two values are rarely the same. Compare the import rate on your bill with the export rates suppliers are offering. Where the import rate is higher, as it usually is, a unit used in the house is worth more than a unit exported, and the share of the generation you use yourself becomes the number that matters most.
Working out payback on your own figures
Ask any installer for the annual generation estimate for your roof in kilowatt hours, then do the sum yourself:
- estimate the share of that generation you will use at home, which is higher if someone is in during the day
- multiply the units used at home by your import rate
- multiply the units exported by the export rate you can get
- add the two, and divide the installed price by the total
The table shows the arithmetic with round, made up numbers. They are not a forecast for any house.
| Line | Illustration |
|---|---|
| Annual generation | 3,400 kWh |
| Used at home, 40% | 1,360 kWh at 25p = £340 |
| Exported, 60% | 2,040 kWh at 15p = £306 |
| Value per year | £646 |
| Installed price | £7,500 |
| Simple payback | About 11.6 years |
Change the share used at home from 40% to 60% and the same system pays back sooner, without generating a single extra unit.
What moves the answer
Orientation and shade come first. A south facing roof with nothing overshadowing it generates the most; east and west roofs generate less but spread it across the day; a chimney or a tree shading part of the array can drag down a whole string of panels unless optimisers or micro inverters are fitted.
After that it is how you use power. A battery stores daytime surplus for the evening, a diverter heats the hot water cylinder with power that would otherwise be exported, and an electric car charged at home soaks up generation. Each raises the share used at home and each adds cost, so each needs the same sum doing. A battery is typically £3,500 to £8,000 installed and a diverter £350 to £600.
The rules that change the sums
Installation of solar panels in a home is zero rated for VAT until 31 March 2027, after which HMRC's guidance says the rate returns to 5%. Batteries have been included since 1 February 2024, including a battery added to existing panels.
To be paid under the Smart Export Guarantee, a solar installation up to 50kW needs an MCS certificate or an equivalent, according to Ofgem's guidance for generators. Panels fitted by an installer without one may work perfectly and still earn nothing for exports.
Most roof mounted panels on houses in England are permitted development and need no planning application, within limits on how far they stand off the roof. Listed buildings, and some positions in conservation areas, need checking with the council first. Wales and Scotland have their own rules.
When the numbers do not work
Solar is a harder case on a roof that is heavily shaded, on a roof that will need recovering within a few years, since the panels have to come off and go back on, and in a home that uses little electricity in daylight with no plan for a battery or a diverter. Scaffolding is a fixed cost of £600 to £1,200 on a two storey house whatever the size of the system, which raises the cost per panel of a very small array.
None of these rules solar out. They mean the sum has to be done with your own usage and your own tariff in it, rather than the installer's figures for an average household.
Questions for the installer
- What is your MCS certification number, and is the equipment MCS certified?
- What assumptions sit behind the generation estimate, including shading?
- Is scaffolding in the price, and bird proofing?
- What warranty covers the inverter, and what does a replacement cost?
- Does the consumer unit need any work to take the new circuit?
- Who registers the system with the network operator, and when will I have the MCS certificate for my export application?
Common questions
Do solar panels work on cloudy days and in winter?
Yes, at a lower output. Generation in a British winter is a fraction of summer generation, which is why annual figures rather than a sunny day's figures are the ones to use.
Do I need a battery to make solar worthwhile?
No. A battery raises the share of generation you use yourself, and it is worth having only if the extra saving covers its cost over its life. Run the sum with and without it.
Do I need planning permission for solar panels?
Usually not for panels on the roof of a house in England, provided they meet the permitted development limits. Listed buildings and some conservation area positions are the exceptions.
Can I get export payments without MCS?
Not under the Smart Export Guarantee for a typical home system, which needs an MCS certificate or an equivalent. Check the installer's certification before you sign.