Solar Panel Costs: Everything You Need to Know
Solar energy stands at the forefront of the renewable electricity generation industry, acclaimed for its affordability, efficiency and flexibility. Despite its undeniable advantages, many potential adopters remain hesitant, confronted by a pressing question: “Just how much will solar panels cost me?”
In this article, we explore everything you need to know about how much solar panels cost. This will include cost considerations for individual aspects of a solar panel set-up and how many panels you may personally need for your home. We also offer some examples of common solar panel setups and their associated costs.
✓ Fact: Solar panel efficiency has greatly improved over the years with early panels being around 6% efficient and modern alternatives achieving over 20% efficiency.
For most of the population, solar panels are no small investment.
For example, the majority of homes with more than one person living in usually need upwards of £4,000 to install panels that will cover their daily needs.
However, this figure is comparatively small when compared to the investment that would have been required to install the same system just a few years ago. This price drop is primarily due to advancements in solar technology and better manufacturing processes.
In addition, solar panels can be considered a worthwhile investment. After all, you will immediately start saving money on your usual electricity bill once they are installed.
Plus, with government schemes such as the Smart Export Guarantee (SEG), solar panels can actually become profitable for owners, once the initial investment has been paid off – this can be in as little as 10 to 12 years.
So, to answer the question. Yes, a solar panel system is reasonably expensive in terms of an upfront investment. Yet they are now cheaper than ever before AND can be considered a great investment in your home.
How Many Solar Panels Do I Need?
Knowing the cost of a single solar panel isn’t all that helpful if you don’t know how many panels you may need. Luckily, it isn’t all that difficult to work out.
The best place to find information on how much energy you use on a monthly basis is your energy bill. This should give you a figure in kWh of how much energy you used during the billed time period.
It is best to gather several bills from throughout the year to generate an average usage because how much electricity you use will vary through the year.
You can then use your monthly average to calculate roughly how much energy you use per day. For example, if you use roughly 310 kWh per month, then your daily usage will be around 10kWh.
Next, you need to calculate how many hours of peak sunlight you get per day.
This will vary by region, you can find your own region’s average daily sunlight hours here – we will use the UK’s average (4.9) for illustrative purposes here.
You can then multiply this by the rating of your chosen solar panel (let’s say 350 watts). This will show you how much energy one panel could create in a day.
i.e. 350 x 4.9 = 1715 watt-hours.
However, you will also need to factor in that your panel won’t always be working at full efficiency due to impacts such as shade and position.
To keep things simple, you can use an average yield of 75% in this calculation.
1715 x 0.75 = 1286 watt-hours
Finally, divide your daily energy consumption by the total daily kWh generated by one panel:
10 / 1.2 = 8.3
Therefore, by using these calculations, it shows you that you will need 9 panels to meet your energy needs.
How Much Do Solar Panels Cost?
To get a better understanding of how much solar panels cost, you need to get to grips with the various components that make up a complete solar energy system. You will also need to understand how much someone may charge for installing those components.
At their most basic level, solar panel systems are made up of two essential components: solar panels and an inverter. However, you may also opt for additional components such as battery storage, iBoosts or EV chargers.
To give you an approximation of the costs involved with solar panels, below are some examples of common installations:
- 1-bed home / 3 solar panels/inverter / one battery (+installation) = £5000
- 2-bed home / 6 solar panels/inverter / no battery (+installation) = £5000
- 3-bed home / 10 solar panels/inverter / one battery (+installation) = £13,000
- 4-bed home / 12 solar panels/inverter / no battery (+installation) = £12,500
- 4-bed home / 12 solar panels/inverter / no battery (+installation) = £14,500
*Costs are averages from quotes provided by UK-based reputable solar panel companies.
Solar Panel Cost Breakdown
1. Solar Panels
Solar panels are, unsurprising, an absolutely essential part of any solar energy set-up.
Although there are several different types of panels available, on residential solar systems you will typically find monocrystalline panels.
Monocrystalline panels are made from single silicon crystals. This makes them efficient but also time-consuming and expensive to produce – meaning they cost the end user more.
As a rough guide, you can use around 37p per watt for a monocrystalline panel. This means that a typical 410-watt monocrystalline panel could cost around £150.
As well as the cost of the solar panels themselves, you may also want to protect them with the addition of a barrier. Also known as pigeon-proofing your solar panels, the barriers help to prevent birds (pigeons in particular) from nesting and leaving a mess upon your panels, which will have a knock-on effect of reducing their efficiency.
An inverter is also an essential piece of equipment in your solar panel set-up. Without it, you wouldn’t be able to use the electricity that is produced by your solar panels.
This is because your solar panels use the sun’s energy to produce Direct Current (DC) electricity. This type of electricity is only typically used in scenarios that require a low-voltage such as in a handheld torch. For higher-voltage needs such as the appliances in your home, you need Alternating Current (AC) electricity.
Your inverter is part of the system that turns the DC electricity into AC, which you can then use in your home, store in batteries or send to the grid for use elsewhere.
Inverters vary in price depending on how efficiently you need them to work. For example, there is little point in installing a large number of solar panels on your property, only to install an inverter that cannot deal with a larger volume of inversion needs.
For most homes, a budget of £500 to £1500 would cover the cost of an inverter.
Not all solar systems need batteries. However, for those who use a large volume of electricity a night (when solar panels aren’t generating), li-ion batteries can be a great way to store excess electricity and access it when you need it. This will save you from buying more expensive electricity from the grid.
Again, how much these batteries will cost depends on how much electricity you need to store. This can start at around £1000 and go up to £6000+ for those with larger electricity needs.
The cost of components isn’t the only thing you need to consider when assessing the cost of a solar set-up for your home. You will also need an expert to help you install the panels, inverter and batteries (if you have them).
How much this will cost will vary widely based on several factors such as how easy it is to access the area the panels are being installed, how many panels you are having installed and where you will locate the inverter.
However, as a rough guide, you may expect to pay around £250 for a standard 250W solar panel system.
Reducing The Cost of Solar Panels
There are several ways you can reduce the cost of solar panels, as well as several ways you recoup your investment faster. Below are some of our top tips and hints:
- Reduce your energy consumption, as this could reduce the number of panels you need. This can be done by:
- Swapping low energy efficiency appliances to more energy efficient options
- Ensuring appliances, lights and other electrical equipment are switched off when not being used
- Remove ‘always on’ appliances such as fridges and freezers that rarely get used
- NOTE: Reducing your energy usage is always good practice where possible. However, you must also consider future energy requirements such as wanting to charge an electric vehicle or an increase in consumption due to additional people living in the home. So, fewer panels aren’t always better – but reducing unnecessary energy usage is a good idea.
- Take advantage of energy guarantees such as the SEG to generate an income for any energy which you don’t use or store in batteries
- Ensure that your panels are clear of dust, debris and shade to ensure maximum efficiency
- Work with your installer to ensure that your panels are installed at the optimal position for efficiency
- Use your appliances (or set appliance times) during sunlight hours
It is clear that, although the cost of solar panels is dropping significantly, installing panels on your home is still a relatively large investment. Many factors come into play when assessing the potential cost of solar panels for your own home such as how many panels you need, which inverter to buy and whether you want to also include battery storage.
You can use this guide to help you better understand the general costs of solar panel installations. You can also use the ‘How Many Solar Panels Do I Need?’ section to calculate exactly how much your own solar panel installation may cost.
If you require further information regarding the cost of solar panels, feel free to get in touch and we will try to provide our assistance where possible.
Written By Danny Morgan
Danny is a property developer by trade with over 15 houses successfully rennovated from the bottom up but other than rennovating houses, he's also a car enthusiast with multiple classic and performance cars.
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- Take advantage of energy guarantees, Smart Export Guarantee (SEG), (https://www.ofgem.gov.uk/environmental-and-social-schemes/smart-export-guarantee-seg)
- Installation Guide, Octopus Energy, (https://octopus.energy/homesolar/)