Solar Panel Prices 2020
Solar panel prices have decreased in price significantly over the last five to six years. Below offers an outline of what solar panels may cost in the current market.
In 2017, there were 709,000 UK installations of solar panels on homes, workplaces, and in solar farms. If this trend continues, 10m homes in the UK will be fitted with solar panels by 2025 and that will mean that, amazingly, two fifths of the electricity we'll use as a country during summer will come from solar panels.
If you install a solar panel system on your home, you'll save money on your electricity bills every year and the Government will actually pay you money each month for 20 years after on the electricity your panels generate.
To have solar panels installed on your home, you'll be looking at an initial investment of between £1,500 and £10,000.
In this article, we'll look at the cost of solar panels to purchase for your home, installation costs, how much you'll save on your utility bills, and how much you'll receive each year from the Government for having your system fitted.
Buy solar panels for your home
Did you know that the payout from the Government for electricity produced by solar panels means that some farmers are actually converting entire fields into solar farms and that's all because the money they make from the feed-in tariffs is more than they can make from growing food or raising cattle?
No wonder it's become so popular. So, when you get an installer out to give you a quote on the cost of solar panels, what do you need to know?
The solar electricity facility installed neatly on your roof will be made up of individual solar panels. Each of the solar panels will cost you between £350 and £550. In terms of space, each solar panel is around 4m2 and each one will output between 400 and 450 kilowatt hours of electricity during the course of a normal year.
As you'd imagine, the more solar panels you have on the roof, the more electricity you'll produce to power your own home. It also means that the cost of your installation will rise too but you can cover all or most of that cost over the next 20 years because you'll be paying less for your electricity and you'll get up to three forms of subsidy payments from the Government.
Solar panel prices UK
Below, please find examples of typical household solar panel costs UK installers are currently charging for different sizes of the system:
||Number of solar panels
||What will this cost you including installation?
||The space on the roof you'll need
||How much electricity per year?
||What type of household is this suitable for?
||£1,450 to £3,050
||Around 850 kilowatt hours
||Property with a single adult
||£2,900 to £5,100
||Around 1,750 kilowatt hours
||Property with two adults
||£4,900 to £6,100
||Around 2,600 kilowatt hours
||Property with one adult and one child
||£5,900 to £8,000
||Around 3,450 kilowatt hours
||Property with two adults, two children, and more
Solar panels – cheap for sale now compared to a few years ago?
As we've seen in this article, the popularity of solar panel installations on homes and businesses continues to grow. It's not just a British phenomenon though – other countries around the world are seeing a similar surge in installations.
That, together with ongoing advancements in the technology behind solar panel production, means that if you're looking for solar panels cheap now, UK installers will be pleased to help you.
If we turn the clock back to the start of a decade, the average price, including installation for a solar power panels system suitable for a family of three would be between £12,000 and £13,000. In today's market, you'd be looking at paying between £4,900 and £6,100 – that's half the price of a few years ago.
With prices falling year after year, does that mean it'd be smart for a homeowner to delay investment in their own solar panels?
Solar panels prices 2020 – why should you invest now?
The minute you drive a car off the showroom forecourt, you know it's lost a lot of value. That's the reason so many of us either don't buy new cars or we buy second hand.
With solar panels, it pays to think differently though. A lot of people a few years ago who had the same mindset accidentally cost themselves a lot of money by waiting and waiting to buy solar panels.
How did they lose out? The price you pay for an installation is only half the story when you purchase solar panels for your home. In addition to saving money on your electricity bill, you receive payments from the Government under something called the Feed In Tariff system.
Back in 2010, when the costs of solar panels were much higher, so was the value of the "Feed In Tariffs". As the price of solar panels continued to fall, the Feed In Tariff remained quite high. This continued for a number of years, and the homeowners who had their system installed before 2016 continue to make a lot of money from their solar panel systems because their rates are locked for 20 years.
In 2016, the amount of money paid out by the Feed In Tariff system dropped dramatically. In late 2015, the Feed In Tariff offered 12.47p for every kilowatt hour produced (both generation and export – more on what that is very soon). From 8th February 2016, that dropped to 4.38p.
Let's show what that means in the real world. If you got a 4kw solar system installed in December 2015, you'd get back around £475 a year in Feed In Tariffs. If it were installed on 8th February 2016, it would be £166. Over twenty years, the homeowners who got a February installation lost out to the tune of nearly £6,000 – a lot of money.
That's why waiting might be a bad decision – although the cost of the technology is still falling, delaying your decision could cost you a lot more in the long run if the Government decides to slash the tariff again.
Solar panels – what is the Feed In Tariff?
You make money in three different ways with your solar panel installation. We'll take a look at them here and calculate what these payments actually mean for a homeowner with solar panels.
Number one is the Feed In Generation Tariff.
With the Feed In Generation Tariff, the company you pay your electricity bills to actually sends you a fixed amount of money based on the amount of electricity your solar panels have produced in a month. You receive Feed In Generation Tariff payments once a month and you get this money as soon as your system is installed. Payments of the Feed In Generation Tariff carry on for 20 years after your installation.
Number two is the Feed In Export Tariff.
Again, this is paid by your electricity company and it's for the amount of electricity you feedback into the National Grid. In other words, you get paid for the energy you don't use because you've effectively generated it for the electricity company on their behalf. Payments of the Feed In Export Tariff carry on for 20 years after your installation.
Number three is the Domestic Renewable Heat Incentive Scheme.
The Domestic Renewable Heat Incentive Scheme (DRHIS) pays money to homeowners who install one or more of a wide variety of green electricity facilities – that includes biomass generators, ground source heat pumps, air source heat pumps, and, of course, solar panels. Once you have been approved by the Domestic Renewable Heat Incentive Scheme, you receive an additional 20.66p for every kilowatt hour of electricity your solar panel produces for seven years after it has been fitted.
Let's look at all three incentives in one table to show where your payments will be coming from…
||Feed In Generation Tariff
||Feed In Export Tariff
||Domestic Renewable Heat Incentive Scheme
||1 June to 31 August 2019
||4.01p per kilowatt hour
||5.03p per kilowatt hour
||20.66p per kilowatt hour
There are some important things for you to know:
- The base price of the Feed In Tariff (both rates) will be frozen at the amount offered per kilowatt hour for 20 years going up every year by the rate of retail price inflation
- The rates above only apply to homes with an Energy Performance Certificate rating of D or higher. If yours is lower, your rates are reduced. An Energy Performance Certificate is the same certificate that estate agents provide you with if you put your home up for sale
- Your installer has to be registered with the Microgeneration Certification Scheme (MCS) when they fit your system and they must report the installation to MCS in order for you to be able to qualify for the Feed In Tariff Scheme and the Domestic Renewable Heat Incentive Scheme.
- You also have to apply to join the Domestic Renewable Heat Incentive Scheme. They have a set of rules that you will have to follow for the seven years after your system has been fitted. Each year, you have to contact the Scheme to report your ongoing compliance. To find out more, please check out the Government's information page by clicking here.
Solar panels prices 2020 – do the numbers stack up for this?
It would be great if homeowners got the same level of Feed In Tariffs they got before February 2016. Unfortunately though, that's never going to come back so it's reasonable for you to ask whether it's still worth it? Is it worth the upfront expense for the savings you'll make over the next 20 years with a new solar power panel system?
Most UK homeowners install a 3kW system. Earlier, we saw that the investment required for that is between £4,900 and £6,100. Let's half the difference and look at a system costing £5,500.
Every year, what you save and what you earn will be about 5% of the cost of your system – 1.5% of that will be in lower electricity bills, 1.4% of that will come from the Feed In Generation Traffic, and the rest from the Feed In Export Tariff. According to UK Power, the average 3-bed semi electric bill is £49 a month or £588 a year.
5% of £5,500 is £275 a year which adds up to £5,500 over the first 20 years. That's the cost of your system covered. In addition, for the first 7 years, you'll earn 20.66p per kilowatt hour from the Domestic Renewable Heat Incentive Scheme – so having solar panels on your home can still make you money.
Many solar power companies offer finance packages to allow you to spread your initial cost over up to 10 years meaning that you don't have to have all the money upfront now to install your new solar panels.
Solar panels prices – are there any other costs?
Solar panel systems are designed to be low maintenance and capable of producing power for 25 years or more after installation. They're also incredibly safe as manufacturers and installers have to abide by some of the strictest health and safety regimes across all industry sectors.
Every now and again, a solar panel may stop working. Your manufacturer's warranty will cover this and, in most cases, so will your installer guarantee. Always make sure to ask.
In addition, if you'd like the peace of mind of having someone check over your system on a regular basis, there are solar power maintenance companies offering this for a fixed annual price.
Should my solar panel installer belong to any trade body?
Unless you know an installer very well and personally, it's always safer to work with a company with at least one year's trading history behind it. For further peace of mind, you might want to ask to speak to one or two existing customers – most reputable solar panel installers will be absolutely fine about your doing that.
You must also make sure that an installer you choose to work with is registered with MCS otherwise you won't benefit from the Feed In Tariffs or the Domestic Renewable Heat Incentive Scheme.
Choosing an installer to fit your solar panels
We work with partner solar panel firms across the UK which we've checked for MCS membership and suitable trading history. This is an important decision for any homeowner, and it pays to know that someone has performed a thorough check on a potential supplier before you speak with them.
We can put you in touch with 3 or 4 reputable local installers of solar panel systems. They'll provide you with a free no-obligation quote personalised to you and your home. Just fill in this form, and we'll contact them on your behalf.
This service is free of charge to you. In addition, you do not have to accept a quote from any of the installers you engage with.