How Much Do Solar Panels Cost in the UK in 2025?

Jade Fury
Nov 10
3 min read

Updated: 22 hours ago

Solar panels have become one of the smartest investments UK homeowners can make, helping to cut energy bills, reduce carbon footprints, and increase home value.

But how much do solar panels cost in 2025? And what kind of savings can you expect under current UK energy tariffs and incentives?

This guide breaks down everything you need to know, from installation prices and system sizes to payback times and government schemes that make solar more affordable than ever.

Average Cost of Solar Panels in the UK (2025)

In 2025, the average cost of a solar panel system in the UK is between £5,000 and £8,000 for a typical 3–4 kW system, which is suitable for an average household.

System Size	Average Cost (2025)	Estimated Annual Savings	Estimated Payback Period
3 kW	£4,500 – £6,000	£300 – £450	10–13 years
4 kW	£6,000 – £8,000	£400 – £550	9–12 years
5 kW	£7,500 – £9,500	£500 – £700	8–11 years

These figures include equipment, installation, and VAT (currently 0% on residential solar installations under the government’s green energy VAT exemption).

Find out more about solar panels in: The Ultimate Guide to Solar Panels

What Affects the Cost of Solar Panels in the UK?

Several factors determine how much you’ll pay for a solar installation:

1. System Size

The more panels you install, the more electricity you generate — and the higher the upfront cost. Larger systems also reduce your payback period because they offset more of your energy use.

2. Roof Size and Type

Complex or shaded roofs may require extra mounting equipment or optimisers, slightly increasing the price.

3. Panel Type and Efficiency

Monocrystalline panels: More efficient and premium-looking, but costlier.
Polycrystalline panels: Slightly less efficient but more affordable.
Thin-film panels: Rare in the UK, mainly used on large or flat roofs.

4. Location

Sunlight levels vary across the UK. Homes in southern England and Wales generally get more solar yield than those in northern regions — which can influence long-term savings.

5. Adding Battery Storage

A solar battery can cost £2,000–£5,000 but allows you to store excess energy for use at night, making your home less dependent on the grid. Many homeowners install batteries to future-proof their system and increase self-consumption.

Have a Look at - Solar Panel Installation In The UK

UK Solar Incentives and Government Schemes

While the old Feed-in Tariff (FiT) ended in 2019, there are still excellent ways to earn money from your solar power in 2025:

Smart Export Guarantee (SEG)

Under the SEG, energy suppliers pay you for every kilowatt-hour (kWh) of unused solar energy you export back to the National Grid.

Typical export rates range from 4p to 15p per kWh (varies by supplier).
Payments are made monthly or quarterly.
You’ll need a smart meter to qualify.

Zero VAT on Solar Installations

Residential solar panels and battery systems currently enjoy a 0% VAT rate until 2027, reducing upfront costs by hundreds of pounds.

Energy Company Grants and Local Schemes

Some councils and energy providers offer additional green home grants or low-interest loans for renewable installations, especially for low-income households or energy-efficiency upgrades.

More information on this can be found in - Solar Tax Credits and Incentives for Solar

How Long Does It Take for Solar Panels to Pay for Themselves?

In 2025, most UK homeowners see a payback period of 8–12 years, depending on:

Installation cost
Energy prices
Sunlight exposure
SEG export rates
Battery storage use

After that, the electricity your panels generate is essentially free, and your system can last 25 years or more.

Example: 4 kW System in the South of England

Let’s break down a realistic example:

Factor	Amount
System Size	4 kW
Installation Cost	£6,800
Annual Savings on Bills	£450
SEG Payments	£120/year
Total Annual Benefit	£570
Payback Period	~11 years
25-Year Lifetime Savings	£7,000–£9,000

If you add a solar battery, your self-consumption can increase from around 50% to 80%, meaning more savings and less dependence on the grid.

Will Solar Panels Increase My Home’s Value?

Yes, research from Rightmove and the UK’s Energy Saving Trust shows that homes with solar panels typically sell faster and for 2–4% more than similar properties without them.

Buyers value lower energy bills and a smaller carbon footprint, especially as energy costs remain unpredictable.

Environmental Benefits

Switching to solar power doesn’t just save money, it helps the planet. A typical 4 kW solar system in the UK can reduce your household carbon emissions by over one tonne per year, contributing to a cleaner, greener energy grid.

Key Takeaways

Average cost (2025): £5,000–£8,000 for a 3–4 kW system
Payback period: Around 8–12 years
Savings: £400–£600 per year (plus SEG payments)
Incentives: 0% VAT + Smart Export Guarantee
Lifespan: 25 years or more

Solar panels are a solid long-term investment for UK homeowners, offering both financial and environmental returns, especially as electricity prices continue to rise. Contact Newpower today for a free no obligation quotation.