Page last updated 04 March 2013
There is plenty of information available about how much money you can save by installing solar panels at your home or business premises – but details about the costs involved in doing so are less easy to find. This list of FAQs on solar panel costs can help you to make an informed decision about whether or not to install a solar PV system.
Solar PV costs vary greatly and depend upon both the size of the panels and the amount of electricity you are looking to generate. The majority of homeowners opt for a 3.5kWp system, which typically costs around £6,500. Smaller systems are available for as little as £2,500, while the largest can cost over £15,000.
It's important to note that larger systems are generally more efficient, meaning that greater initial costs can lead to bigger savings or profit in the future.
Probably. Solar PV costs reflect the complexity of the technology involved, while solar systems eventually allow owners to make significant gains, either through reduced energy bills or via the government's Feed-In Tariff (FIT) scheme. Solar PV systems can shave up to 50% off your annual energy bills and the National Grid will buy back your unused power at a rate of 4.5p/kWh.
Solar panels can also increase the value of your property. While there is some dispute over the exact amount of value added, a recent study has shown that solar systems generally make homes more appealing to potential buyers.
Not always. Energy companies across the UK are prepared to offer homeowners free solar panel installation depending on the type of property and its location. While this may be a tempting option, you should bear in mind that if you opt for a free installation you usually forfeit potential FIT payments and only benefit through reduced energy bills.
If you can't afford the solar panel installation costs, there are loans available. A number of installers and power suppliers now offer loans to cover the upfront fees, meaning that you can still benefit from both FIT payments and reductions in your energy bills. You can then use these savings to fund your loan repayments.
The Green Deal is a government incentive that covers the initial cost of installing solar panels. It works in the same way as a loan, although you make repayments through your energy bills rather than directly to a financial provider. These repayments are made clear beforehand and are effectively financed by the savings you make in your electricity bills. If you are on a low income, you may be able to get further financial assistance.
Solar PV systems typically require very little maintenance, although solar inverters might need to be replaced every ten years or so. On top of upfront solar panel costs, you may need to pay to strengthen your roof. Those looking to have panels built into the roof's structure will also have to pay a little bit extra. However, it's important to remember that all these costs can be offset by the significant potential earnings that come with solar panel systems.