How much do solar panels cost in 2023?
It’s very easy to overpay for solar panels.
Some companies charge a lot more than others. However, if you do pay too much, it will take you longer to recoup your investment.
This guide is designed to help you:
- Rule solar panels in or out, if you are not sure whether you want them or not; and/or
- Help you secure a fair price from an installer, if you have decided to go ahead with a solar panel installation.
A typical Solar Panel system
In 2023, an average-sized solar PV system for a house should cost around £7,500.
£7,500 should get you a system sized at between 4 kWp and 4.5 kWp (see our page on Energy Terminology for an explanation of ‘kWp’ and other confusing terms).
Individual panels are rated between roughly 330W and 420W at the moment.
The system could comprise, for example:
- 10 x 400W panels = 4.0 kWp
- 12 x 350W panels = 4.2 kWp
If you are thinking about getting an electric car, and have the roof space, you might want to consider a larger solar array. Something along the lines of:
- 13 x 400W panels = 5.2 kWp
- 16 x 400W panels = 6.4 kWp
Obviously, your overall price will be higher with more panels on. However, solar panels are relatively inexpensive nowadays, and the extra panels won’t add a huge amount to the total cost of the project.
Having a bigger solar panel system = more electricity to feed your electric car with. EVs have very big batteries, and to keep your home electricity costs down, you should install as large a solar panel array as possible.
0% VAT on Solar Panels
On 1 April 2022, the VAT rules for solar panels changed:
- For all domestic solar panel installations, VAT is applied at 0%. Yippee!
- This new VAT regime runs for 5 years until 31 March 2027
If you wish to have battery storage installed alongside solar panels, then the 0% VAT rate will also be applied to the batteries.
If you have battery storage installed separately, VAT on the batteries will be at 20%. So, if you are interested in batteries, get them put in at the same time as your solar panels, budget permitting.
When might you pay more than £7,500?
There are often reasons why your particular 4 to 4.5 kWp system may cost more than £7,500.
For example:
- If the scaffolding is complicated or larger than usual.
- You have a small roof and need to use expensive, high capacity panels to reach your desired system size.
- If your roof suffers from shading and you therefore require shade-mitigation technology such as SolarEdge.
- You have an ‘in-roof‘ installation, rather than an ‘on-roof’ one.
- If you have slate or clay tiles, rather than concrete tiles.
- If the installer wants to make higher profits and/or has high running costs or overheads.
When might you pay less than £7,500?
On the other hand, if everything is in your favour, you may pay less for a 4 to 4.5 kWp system.
Conditions conducive to a low price include:
- Bungalows with easy roof access, meaning scaffolding costs are lower.
- A big roof allows you to use lower capacity panels which are cheaper.
- Concrete tiles are easier and cheaper to install on than slate or clay tiles.
If you can then find a local installer who is fair and reasonable with their pricing, you are on to a winner.
Beware, though, if the price is too low. It may be the installer is cutting corners to get the price down that low.
For example, they might be:
- Employing cheap, unqualified labour.
- Skimping on proper scaffolding = unsafe working conditions.
- Using the very cheapest solar panels and inverters.
Smaller Solar Panel Systems
If your roof is very small, or you don’t have the budget for a larger system, here are guideline prices for some smaller systems:
- 10 x 350W panels = 3.5 kWp = £6,200
- 8 x 380W panels = 3.04 kWp = £5,400
- 6 x 420W panels = 2.52 kWp = £4,500
Larger Solar Panel Systems
As mentioned above, if you have or are getting an electric car, which has a big battery inside, you might well want to go for a larger solar panel array.
Here are some sample costings:
- 13 x 400W panels = 5.2 kWp = £9,000
- 16 x 400W panels = 6.4 kWp = £11,000
- 19 x 400W panels = 7.6 kWp = £13,000
Additional Components
There are a couple of technologies which are often installed at the same time as solar panels.
They both have the same objective: to capture excess solar electricity.
Why would you have excess solar electricity? Because solar electricity falls into the “use it or lose it” category.
When solar panels generate electricity, the electricity needs to flow somewhere. If you have devices turned on in your home, the solar electricity will flow to those devices.
Equally, if your electric car, say a Tesla Model 3, is plugged into its charging point, solar electricity will flow to it.
However, if your electric vehicle is away at work and most of the devices at home are turned off, you will almost certainly be generating a lot more electricity from your panels than you need at that moment.
This is especially the case around lunchtime, if you have south-facing solar panels.
This surplus solar electricity has to flow somewhere, and if your electric devices are turned off and not calling for it, it will flow out to the national grid.
On 1 January 2020, the government introduced the Smart Export Guarantee (SEG). This means you can be paid for any solar electricity you export to the grid. You just have to sign up with a participating electricity supplier and have a smart meter installed (free of charge). The rate you get varies significantly from supplier to supplier and is currently in the range of 1p to 15p for every unit (kWh) of electricity exported. That’s a massive variation in rates, so it’s worth shopping around for the best rate. There is an even higher SEG rate available of 25 per kWh as part of the Octopus Flux offering, although that product is quite complex and you should do your homework thoroughly before signing up to it.
However, rather than export your precious, zero-cost electricity from the sun, why not keep it in the home in one or both of the following ways…
Battery Storage
This is where battery storage comes in.
Rather than losing the surplus solar electricity to the grid, you can store it automatically in a home battery. You can then access that stored electricity later in the day or at night, perhaps to charge your Nissan Leaf or Polestar 2, or power your oven for dinner.
Battery storage costs range from about £4,000 for a small battery to over £15,000 for the largest batteries. There are many manufacturers of storage products at the moment and it’s worth doing your due diligence to ensure you get a product that will stand the test of time. Larger, well-established battery producers like Germany-based Sonnen or USA-based Tesla with their Powerwall are often a safe bet.
Please refer to our Battery Storage page for a full analysis of the technology, pricing, installer tips, etc.
Immersion Controllers
A battery captures excess solar electricity and lets the electricity out again later in the day or during the night.
An immersion controller works differently.
It diverts excess solar electricity – at the moment the electricity is generated – and sends it to the immersion element inside your hot water tank. When the immersion element receives this solar electricity, it turns on and heats your water.
In other words, the immersion controller device allows you to store your surplus solar electricity in the form of hot water.
These devices are relatively cheap and easy to install on the same day as the solar panel system. Typically they cost about £500 to £800 fully installed.
