Solar Panels: Costs & Payback Times Explained

Rising energy bills have prompted thousands of homeowners to invest in greener sources of energy, including heat pumps and solar panels. In 2023, statistics showed that solar panels were installed in more than 17,000 households every month taking the total number of households with solar panels across the UK to around 1.3 million. 

Upfront Investment 

The overall cost of your upfront investment when purchasing and installing solar panels can vary significantly depending on a number of different factors, including the size of your property and the specifications of your chosen solar panels. That said, it’s worth noting that the average installation costs between £4,000 and £9,000, depending on roof type. 

Typically, the above figure includes the cost of a solar inverter, as well as all labour and materials. It’s worth noting that solar inverters have a shorter lifespan than solar panels, so you will likely need to replace it in around 10 years.

Moreover, a solar battery will enable you to store the energy generated by your solar panels, which can help you to save additional money in the long run. Here at Green Flare, we’re proud to offer state-of-the-art Solar Battery Storage, starting at £2,500.

On average, it will take between 7-10 years to break even on a solar panel investment. That said, many customers report much faster pay-off times, with the panels paying for themselves multiple times over the course of a decade. If you spend a lot of time at home or you use a lot of electricity, you can expect your break even time to be on the lower end of the scale. 

Government Incentives and Schemes 

Depending on where in the UK you live, you may be entitled to government-backed schemes that could help you to reduce the cost of purchasing and installing solar panels. 

Energy Company Obligation 4 Scheme

If you live in England, Wales or Scotland, you may be eligible to receive free solar panels via the ECO4 scheme. This is linked to the ECO4 Flex scheme, which allows Local Authorities to ensure that government backed energy efficiency schemes are tailored to the needs of the local area. ECO4 is expected to run until at least 2026. 

Solar Together

A select number of council areas are participating in the ongoing Solar Together scheme, which facilitates group-buying of solar PV and battery systems. The savings that can be made vary, with homeowners generally saving between 10% and 25%. 

Home Upgrade Scheme 

The Home Upgrade Scheme (HUG2) provides energy-efficient home upgrades to eligible homes in a select number of local authority areas. The savings that can be made are area-dependent, but low-income and off-grid households could receive funding worth up to £10,000. 

0% VAT 

All solar panels purchased in England, Wales and Scotland are subject to a 0% VAT charge. This relief scheme will run until March 2027 and the savings that can be made depend on the overall cost of your solar panels. 

Companies providing renewable energy solutions, such as Green Flare are often best-placed to provide you with up-to-date information regarding the cost-saving schemes and incentives that you may be eligible for. 

How Many Solar Panels Will I Need? 

Broadly speaking, homes that consume a lot of energy will require more solar panels than homes that use less electricity. However, there are also a number of other factors to consider. 

Solar Panel Efficiency 

Highly efficient solar panels are able to generate more energy than less efficient models. This efficiency comes at a premium, so it’s worth spending a bit of time weighing up whether the extra investment will be worthwhile. 

Sunlight Levels 

If your property isn’t surrounded by trees or buildings, your solar panels will receive more light throughout the day, and you will likely need fewer panels to meet your energy needs. 

Long-Term Benefits of Solar Panels

There are a number of benefits to investing in solar panels, including: 

Reduced Energy Bills 

Most people install solar panels to reduce their energy bills and investing in a solar battery will allow you to maximise your savings. The Energy Saving Trust has a helpful online calculator tool that can help you to estimate how much you could save with solar panels. 

Sell Energy Back to the National Grid 

The Smart Export Guarantee (SEG) allows you to earn money by effectively selling any electricity you have generated but haven’t used back to the National Grid. 

Reduce Your Carbon Footprint 

Solar panels are a source of clean, green energy, which will help you to minimise your carbon footprint. 

In most instances it won’t pay to invest in solar panels immediately before selling as the costs of installation can outweigh the gains, however, potential buyers do often include the potential savings and overall eco-friendliness of a property with solar panels into their decision-making process.

Seamlessly Integrated Solar By Green Flare

Here at Green Flare, we’re proud to provide homes and businesses with seamlessly integrated, high-end solar technology. Our incredible team places solar energy at customers’ fingertips, empowering individuals and organisations as they take their first steps towards a greener, more economic future. Get in touch to arrange a quote.