Concerned about your increased electricity bill? Hey, put your worries aside and consider installing solar panels! But do solar panels reduce energy costs? This might be the question popping up in your mind right now.
The average monthly electric bill with solar panels UK can be reduced by 50-70%, while every household is currently paying around £115 per month.
Quite surprising, right? Then stay with me and take a deep dive into this detailed guideline on solar energy panel cost, its working methods, and cost-effectiveness to make a wise, timely, and informed decision.
Do Solar Panels Reduce Energy Costs? A Complete Guide
First, get an idea about how solar panels work.
Understanding Solar Panels
Solar panels convert sunlight into electricity using photovoltaic (PV) cells containing silicon. When the sunlight falls on these panels, they generate direct current (DC) of electricity. A solar inverter turns this into an alternating current (AC) suitable for home appliances.
With the rising concerns of environmentalists, solar panels have become a reliable means of innovation and sustainability. So, consider the Sun as a renewable source of electricity for our planet Earth.
Anyway, now have a quick look at different types of solar panels.
Different Types of Solar Panels
Three types of solar panels are generally found to be used in the United Kingdom.
1. Monocrystalline panels
From installation to maintenance, monocrystalline panels are the cheapest and most popular choice for PV solar technology.
With over 20% efficiency, they are currently the most widely used panels in the UK, outperforming the other panels in high temperatures and low light conditions.
2. Polycrystalline panels
Traditionally, they are a slightly cheaper alternative but still can work with around 15-20% efficiency in solar generation.
3. TFSP (Thin-film solar panels)
Unfortunately, if you have an unusual surface or space to install solar panels, these thin and lightweight panels can be a great choice.
How Solar Panels Lower Energy Costs
The reduction of cost for solar energy panels happens through generating electricity on their own. Therefore, the dependence on the national grid lessens, resulting in a lower electricity bill.
However, your electricity provider won’t tell you about the amount of solar energy you’ve used in a month. The overall electricity cost will simply go down instead.
Besides, there are some other factors that can affect their overall performance.
The Size of the Solar System
You need to determine an optimized system size considering your electricity consumption, budget, and available roof space. A compatibly sized system can generate enough electricity to cover most of your needs. Even if it can’t do that, be sure that you will get compensation on your electricity bills by getting maximum savings.
Its Capacity
Choose high-efficiency solar panels to get more electricity in less space. Although the upfront cost is high, they can still maximize the energy output and contribute to your long-term savings.
The Position of the Solar Panels and Exposure to the Sun
Selecting the right location is important to get the best output. You should set up the solar energy system in a location with maximum sun exposure throughout the day. Be sure to avoid shading from nearby buildings, trees, or other blockages that may affect solar power generation.
Energy Storage
Storage implementation is important to store excess and unused energy generated by your solar panels during peak hours. It facilitates the solar panel to work even during the night or on cloudy days.
Proper maintenance
To get the best performance, the solar panels should be cleaned regularly. Make sure to remove dirt, debris, and snow that can reduce power production.
By focusing on the above factors, you can ensure that your solar system works at its highest possible capacity. This, in turn, leads to greater energy production and significant savings on your electricity bills.
If the solar panels produce more power than the usage amount, the excess electricity goes back to the grid. In this case, you can’t utilise the entire solar energy, and here comes the true flex of this entire system, which is the solar battery. It stores the unused energy to use later on overcast days or in the evenings.
With a battery, most households in the UK can use 60–80% of what they generate, whereas this percentage will be reduced to 20–40% without a battery. Therefore, battery storage is becoming popular as you need to buy much less from your energy supplier.
Okay, at this point, you might be concerned about the cost of solar panels and battery UK.
Don’t worry. Have a look at the section below.
How Much Do Solar Panels Cost UK?
According to one of the industry standards organisation Microgeneration Certification Scheme (MCS), the average cost of solar panels has been reduced to some extent in recent times. Although the cost depends on several factors, such as the power output of your solar panels, the amount of energy your household uses, and the time you use it, here I am showcasing some of the latest data to give an average idea of it.
Typical costs of installing solar panels in the UK in recent years are estimated as follows:
- Cost of solar panels for a 1 or 2 bedroom house: £4,000 with a 2.1 kilowatt-peak (kWp) system.
- Cost of solar panels for 3 bedroom house: £7,000 with a 3.5 kilowatt-peak (kWp) system
- And £9,800 for a four-bedroom property.
Now that you know about the solar energy panel cost, let’s get a quick view of how much do solar panels save on electricity bill UK.
I am pretty sure this will break down the myth of why solar panels are not worth it.
How Much Do Solar Panels Save on Electricity Bills UK?
As sunlight is an abundant source of renewable energy, you can get electricity that is free of cost through solar energy panels. This means the average monthly electric bill with solar panels UK has been substantially decreased, saving around £300 to £700 a year.
Average estimated annual savings on electricity bills:
- One- or two-bedroom house: £290.
- Three-bedroom home: £480.
- Four-bedroom home: £670.
These are the real figures for UK homes. Installing solar panels along with battery storage on newly built houses leads to more significant savings. New research done by the MCS Foundation shows how much UK homeowners could save by installing solar panels in new-build homes:
A semi-detached newly built house with solar panels alone could save more than £1,000 per year. And the battery implementation increases that saving up to £1300 a year.
A mortgage of over 25 years works out to £38,811 in total savings for a standard 3-bed semi.
For a terraced home with both panels and solar battery support, average monthly electric bills drop to just £24.
Therefore, total savings over 25 years across all home types range from £7,500 to £62,500, depending on the type and size of the property.
Approximate Savings from Solar Panel Systems (25-Year Projection)
| System Size (kW) | Estimated Annual Savings (£) | Estimated 25-Year Savings (£) |
| 2 kW | £300 – £500 | £7,500 – £12,500 |
| 4 kW | £600 – £1,000 | £15,000 – £25,000 |
| 6 kW | £900 – £1,500 | £22,500 – £37,500 |
| 8 kW | £1,200 – £2,000 | £30,000 – £50,000 |
| 10 kW | £1,500 – £2,500 | £37,500 – £62,500 |
By the way, here I am also attaching a table showing the average annual energy costs. Have a look at this.
| Type of Home | Panels Only (Annual bills) | Panels + Battery (Annual bills) | Approximate monthly cost (Panels + Battery) |
| Detached | £603 | £275 | ~£23 |
| Semi-detached | £623 | £321 | ~£27 |
| Terraced | £551 | £287 | ~£24 |
Don’t these savings overshadow the upfront cost of solar installation?
Now it’s time to turn back to the core question. Do solar panels reduce energy costs? The answer is YES, and by this time, you already know why!!
Let’s discover some other useful aspects of solar energy panels.
Are Solar Panels Worth It?
Solar panels not only financially benefit you by saving on your electricity bill and sending back the extra electricity to the grid, but also they play an important role in keeping our environment clean, sustainable, and eco-friendly.
Here, I am discussing the other benefits of solar energy:
Carbon Footprint Reduction
Depending on where you live in the UK and how big your solar panel system is, it could save about one tonne of carbon per year. Solar panels lower our dependence on fossil fuels like coal and natural gas. Using less fossil fuels reduces our greenhouse gas emissions, like carbon dioxide, which are major causes of climate change and air pollution. So, installing solar panels could help lower global warming and make the air cleaner.
Low Water Consumption
Solar panels don’t need water to cool them down like energy generators do when they move fuel via pipes. This entirely stops the system from using water.
Improved Air Quality
When you burn fossil fuels to make electricity, for example, you get harmful by-products like carbon monoxide. These toxins leak into the air and increase air pollution, which hurts our health. On the other hand, solar panels produce 20 times less carbon than coal and 12 times less carbon than natural gas.
So, don’t fall for the myth that solar panels are not worth it.
If you are thinking of getting a solar installation, please read the following advice to make a better decision.
Solar Panel Installation
Most homeowners can install solar panels without planning permission, but if you have a flat roof or live in a conservation area, you should check with your local council.
Know that the UK government always encourages us to adopt clean energy by providing various incentives. Though the solar panel UK government grants have upgraded and evolved with time, here I am mentioning the current ones:
1. Zero VAT on Solar Installation (Until 2027)
This program brings massive relief to homeowners, slashing the VAT on domestic solar panels to zero.
2. Smart Export Guarantee (SEG)
When the unused or excess electricity produced by solar panels goes back to the grid, this scheme makes the energy supplier companies pay you back for that additional power. Tariffs may vary, but the typical rates are 3p to 15p per kWh.
So, make sure the energy suppliers you choose must have a Smart Export Guarantee tariff. It will allow you to receive a payment for every unit of electricity you export back to the grid.
There is no doubt that solar panel installation is a great commercial investment for lowering energy costs and promoting sustainability. However, their effectiveness depends on how they are managed and maintained. So, picking the right installer will make this process easier for you.
Choose Future Co
As a leading renewable, MCS-certified energy company, we are one of the best suppliers across Britain. Our expert team is always ready to serve you in London and beyond.
You will get smart, efficient, and reliable solar panel installation services for homes and businesses. Besides, we also offer expert advice to get the most out of your solar energy system.
Our expertly designed solar panels, battery, and heat pump systems help the UK drive toward a cleaner and greener future.
Contact us here and get your free quote for more guidance, .
Final Thoughts
Solar panel installation is a smart and practical investment for UK homeowners. It no longer remains a futuristic idea. By understanding how much solar energy panels cost, exploring available UK government grant programs, and calculating your potential savings, you can confidently decide whether solar is the perfect pick for you.
If you are asking, do solar panels reduce energy costs?— The answer is obviously yes. With proper setup and usage, solar panels can drastically cut your bills, lessen carbon emissions, and even help you earn money through excess energy exports.
FAQ
Is it cheaper to use solar panels?
As the savings from the solar panel outweigh the costs of its installation and maintenance, most homeowners in the UK consider it a great financial investment. Moreover, with a little maintenance, it can serve you over a lifespan of 20 to 30 years.
Do solar panels use less electricity?
Solar panels generate electricity from sunlight, which is an abundant source of energy that is free of cost. Therefore, homeowners have to depend less on expensive electricity from the National Grid. Solar energy panels will cut your electricity bills by up to 50 to 70 percent.
Do solar panels work on cloudy or rainy days?
Solar panels can still generate electricity even when the light is reflected or partially blocked by rain and clouds. The UK climate supports solar energy production throughout the year. In addition, rain actually helps to keep the solar panels working efficiently by washing away the dust or dirt.
Do solar panels really lower electricity bills in the UK?
Yes, solar panels can reduce your electricity bills by 50–70%, depending on location, usage patterns, and system size. The annual savings for most of the UK homes range from £500–£1,200 or even more.
How much does it cost to install solar panels in the UK?
Cost will vary depending on panel quality, solar battery storage, and the installer you choose. The average expenses to install a 3–4 kW solar panel system in the UK are between £5,000 and £7,000.
How long does it take for solar panels to pay for themselves?
It takes 6 to 9 years for most solar panel systems in the UK to pay for themselves. However, it depends on energy savings and Smart Export Guarantee (SEG) earnings.
Are there any UK government grants for solar panels in 2025?
Yes. The Zero VAT on Solar Installation scheme offers a 0% VAT incentive on domestic solar panels until 2027, and the Smart Export Guarantee (SEG) allows you to earn money by exporting excess energy.