Are Solar Panels Worth The Investment?

With energy bills on the up and the environmental disaster getting worse, is now the right time to switch to solar panels?

There are plenty of good reasons to do so – they will reduce your electricity costs, increase your usage of renewable energy and even increase the value of your property. But many are still wondering whether solar panels are worth it. 

It’s true, they’re not entirely without their downsides. The main reason why homeowners all over the country aren’t installing panels at will is because of the upfront costs. But is this justified or are solar panels really worth the investment?

This guide breaks down everything you need to know in regards to costs, savings, benefits and practical considerations to help you decide if solar panels are right for your home.

Starting with the basics, how do solar panels work?

Solar photovoltaic (PV) panels are the cornerstone of a solar energy system. It’s these ingenious pieces of technology that convert sunlight into usable electricity to power your home. Alongside the PV panels, you also need an inverter, wiring and some form of management control centre to complete your system. 

Here’s a simple breakdown of how solar panels generate electricity and integrate into your home’s energy system.

  1. Sunlight to electricity – Solar panels are made up of photovoltaic cells, usually made from silicon. When sunlight hits these cells, it triggers the photovoltaic effect – a process where light energy (photons) collide into electrons in the silicon. This creates an electric current, known as direct current (DC) electricity.
  2. Conversion into usable electricity – Most electrical appliances in UK homes run on alternating current (AC) electricity, not DC. This is where the inverter comes into play. The inverter takes the DC electricity produced by the solar panels and converts it into AC electricity, making it usable for your lights, heating and appliances.
  3. Power use and storage – Once converted to AC, the electricity flows into your home’s electrical system. If you have a battery storage system, any excess electricity generated during the day can be stored for later use. Without a battery, surplus energy that isn’t immediately used is exported to the national grid. Through the Smart Export Guarantee (SEG) scheme, you can receive payments for the excess electricity you export.

It’s common to hear the argument that solar panels aren’t any good for the UK as the weather is too bad and it’s too cloudy. Is there any truth to this?

Not really. Solar panels don’t actually require direct sunlight to work. It certainly helps when there’s full sun, but solar PV can still function on cloudy or overcast days from the daylight available—making them suitable for our sometimes unfavourable UK weather conditions. 

Interestingly, solar panels work more efficiently in cooler temperatures, with peak efficiency occurring between 1°C and 20°C. Too much heat can reduce their performance.

Energy output is naturally higher during summer when daylight hours are much longer, but panels still produce energy during the shorter winter days too. 

Solar technology is getting better all of the time, with many modern panels now optimised for low-light conditions.

Newer solar panels have efficiency ratings of around 18–22%, with top spec models touching on 23-24%. This is a reflection of how much sunlight they convert into usable electricity. Lower quality solar panel models will operate around 15-17% efficiency. 

These percentages may seem low compared to other heating and energy systems, such as infrared panels where electricity is converted into heat at near 100% efficiency. However, the key difference lies in the source of energy. Solar panels generate electricity from daylight, a free and renewable resource, rather than transferring existing energy.

It’s also true that the average power rating of a solar panel has increased over the past decade from around 250 watts to 370 watts. This means that even a few extra percentage point increases in efficiency can make a huge difference to the electricity generated. You can read more on how efficient are solar panels.

The cost of installing solar panels in the UK depends on factors like system size, quality of the model and components, plus installation complexity depending on the property and roof structure.  

Looking at the averages, homeowners can expect to pay:

  • 3kW system: £4,500–£5,500 (suitable for smaller homes or low-energy users)
  • 4kW system: £6,000–£7,500 (good for medium-sized homes)
  • 5kW system: £7,500–£8,500 (best for larger homes with higher energy demands)

These costs should cover the panels, inverter and professional installation. Solar systems with higher capacities naturally cost more but provide greater energy output and cost savings over time.

Adding battery storage to a solar system is a good idea for many (more on this shortly), however it does come at an additional cost of between £3,000–£10,000 depending on capacity and brand.

Are solar panels VAT-free?

Yes, solar panels are currently VAT-free in the UK and have been since April 2022. This government incentive reduces installation costs by 20% to make solar panels more affordable for homeowners looking to invest in renewable energy. The 0% VAT rate also applies to battery storage.

This VAT cut is expected to end on 1st April 2027, when it will go back to a 5% reduced rate.

The savings from solar panels depend on a variety of factors, such as your location, size of your solar system and energy use habits.

As solar panels generate ‘free’ electricity on a daily basis, UK homeowners can expect significant savings on their electricity bills. The Energy Savings Trust says the average home saves 70% on their bills with solar panels. 

It’s difficult to put an exact figure on it without knowing all of the details but you can expect to save the following:

  • Small home (3kW system) – Save £400–£500 per year.
  • Medium home (4kW system) – Save £500–£700 per year.
  • Large home (5kW system) – Save £700–£900 per year.

Let’s talk you through an example. 

Based on an average of 2.5 peak sun hours per day, a standard 4kW system can generate approximately 3,400kWh a year. This works out as 9.3kWh of electricity per day, which is at the upper end of an UK average electricity consumption of 6-10kWh per day. 

During summer months, solar panels can produce much more energy than your home uses, accounting for around 50% of total energy production across the year. This can be captured in a solar storage battery or exported to the grid. Depending on your setup, the long summer days mean it’s possible for your home to go off-grid for days at a time – saving you from buying any electricity from the grid. 

Even in the winter, you’ll still be making savings as panels can still generate energy in low light. However, the PV is somewhat capped by the shorter days, meaning that winter usually accounts for 10-15% of annual energy production. This will mean you’ll need to use the grid for energy, but it will be at a reduced amount. 

The average payback period for solar panels in the UK ranges between 8–12 years. 

But the truth is that the return on investment for your solar panels all depends on how much solar energy you use directly. 

The more solar energy you use, the less energy you have to buy from the grid and the quicker you’ll get a positive return. Your solar array might be producing a tonne of electricity during the day, but if all this is getting sent to the national grid, you won’t really be benefitting. Yes, you may receive payments under SEG, but this will be less than what you have to pay to buy that energy back during the evenings or early morning. 

It’s for this reason why battery storage can be so useful – you’re saving up that self-generated solar when you’re not around or your house doesn’t demand it, so you don’t have to buy grid electricity when you do need electricity. 

All in all, the payback time for solar panels will depend on a few factors, such as:

  • Energy use patterns – Homes with higher daytime energy usage see faster returns as you get to use more self-generated energy.
  • System size – Larger systems generate more electricity, leading to greater savings (but they do also cost more)
  • Electricity prices – Rising energy costs mean that savings from solar panels are increasing, shortening payback periods.
  • Battery storage – Are you saving solar energy you don’t immediately need to use at a later time?
  • Smart Export Guarantee payments – Selling excess energy back to the grid can also help to reduce the payback time.

Solar panels on their own can offer significant benefits, there’s no doubt about that. However, combining them with battery storage can take your energy savings and independence to the next level. 

A solar-only system has a lower upfront cost and can still provide considerable energy savings. Any excess energy generated is sent to the grid, where you may earn payments under the SEG scheme. But, without battery storage, you’ll remain reliant on the grid during evenings or periods of low solar generation, which limits the system’s full potential.

Adding battery storage to a solar system allows you to store surplus energy produced during the day for use later. This reduces grid reliance, especially during evenings when electricity demand and prices are highest. Batteries can also take advantage of time-of-use tariffs, allowing you to charge during off-peak hours (around 3 times cheaper than peak times) and use stored energy when rates rise. 

Most homes with solar panels would benefit from a battery storage system between 5-12kWh in capacity – this depends on how much of your solar energy usually gets exported to the grid.

The initial cost of adding a battery ranges between £4,000–£8,000, but the long-term savings and energy independence can make it a very much worthwhile investment. For example, our 10kWh battery saves us between £800-£1,000 in energy costs per year. It cost £6,000, which gives it a payback time of 6 years. Over the lifespan of the year, this will turn into a significant plus.  

In our opinion, adding battery storage to your solar PV is a fantastic option for homeowners. 

Solar panels are regarded as one of the most sustainable energy solutions available today. By generating clean electricity from sunlight, they significantly reduce reliance on fossil fuels and don’t emit any carbon emissions at source. 

The downside is that solar panels do contain a number of materials, such as silicon, metals, glass and plastics, which all add to an embodied carbon footprint to create it in the first place. 

However, it’s said that a 4kW solar panel system can prevent around 1 tonne of CO₂ emissions entering the atmosphere a year, which is the equivalent of driving over 3,000 miles in a petrol car.

Solar panels will play a key role in decarbonising homes and reducing the country’s overall carbon footprint. When paired with renewable energy tariffs and/or battery storage systems, they become an even more beneficial solution.

Yes, solar panels are highly recyclable. Around 95% of their materials, including glass, silicon, aluminium and other metals, can be effectively recovered and reused.

The glass and aluminium frames, which make up the majority of a panel’s weight, are easily recyclable, whilst silicon can be repurposed for new solar cells or other electronic applications.

Solar panel recycling is going to be really important going forward as more and more panels start to reach the end of their 25-30 year lifespan. Initiatives in Europe are helping to make sure that solar panels remain a circular, low-waste solution.

Yes, solar panels will increase the value of your home

A number of UK surveys, including those by Boxt Energy and Effective Home, suggest that solar panels can add between 4–14% to a property’s worth. Buyers are increasingly drawn to homes with sustainable systems already in place, as these eliminate the upfront cost of installation and promise long-term energy savings. 

For example, with the UK’s average house price of £260,000, solar panels could add £10,400–£36,400 in value. In higher-priced regions like London, this figure can reach up to £90,000.

Benefits of solar panels

  • Energy bill savings – Reduce electricity bills by up to 70%.
  • Energy independence – Generate and store your own energy so you’re not as reliant on the grid.
  • Environmental impact – Lower carbon emissions and support renewable energy adoption.
  • Government incentives – Earn money via the SEG scheme and benefit from VAT-free installation.
  • Increased property value – Homes with solar panels can sell for up to 14% more.
  • Long lifespan – Panels last 25–30 years with minimal maintenance.
  • Protection from rising energy prices – Lock in lower energy costs as electricity prices continue to rise.

You can read more on the less obvious benefits of solar panels here.

Cons of solar panels

  • High upfront cost – £4,500–£8,000 for standard residential systems.
  • Payback period – 8–12 years on average
  • Seasonal variations – High generation in the summer and lower generation in the winter. Also there’s slightly lower output in northern UK regions compared to the south coast. 
  • Roof space – Limited roof space can restrict system size and output.
  • Aesthetic concerns – Some homeowners may find the appearance of solar panels unattractive.

So, are solar panels worth the investment?

For most homes in the UK, the answer is a resounding yes. 

Solar panels can significantly reduce energy bills, provide long-term savings and help cut carbon emissions. They’re an excellent investment for those looking to lower their reliance on the grid and set up a greener future.

That said, there are some factors to consider before taking the plunge. Your roof’s suitability plays a key role – south-facing roofs with minimal shading deliver the best results, but even east or west-facing roofs can perform well. 

Energy usage is another important consideration. Homes with high daytime consumption benefit most, as they can maximise self-consumption of the electricity generated. If this isn’t the case, storage batteries are a great option to save your solar energy. Upfront costs may be a hurdle, but the long-term prospect is well worth it. 

In our opinion, solar panels offer a win-win solution for savings and sustainability for most households. 

About the author 

Ben Hardman

Ben is a professional writer and the creator of sustainable living website TinyEco.com.
It's here where he helps people to reduce their environmental impact through simple, everyday choices. Away from the laptop, Ben loves spending time in the natural environment with his young family and Murphy the cocker spaniel.

Experience:
First Class BSc Biology degree (environmental and climate change focus)
Six years of working and writing in the environmental sector, including two years working at an international sustainability consultancy
Written for Ethical Consumer magazine, My Mother Tree, Unsustainable Magazine, Happy Eco News, Emission Index, PeakDistrict.org
Commented in The Independent, The Guardian, GreenMatch. Also featured on Radio 1's environmental special 'Minute of Me'

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