Perhaps the best thing about installing solar panels is how it can increase your independence from the grid and help you save money. But you have to balance that fact with initial installation costs.
So, how long does it take for solar panels to pay for themselves? It’s difficult to say: but the answer depends on how much you pay for the panels, how much your electricity would otherwise cost, how much green energy the panels make from the sunshine you get, and whether you have a battery installed or not. The average payback period for solar PV is anywhere from 12-26 years.
The guide below breaks down the equation into simple terms: how much you pay for installation, how much panels save (and even make) per year, and how you can reduce installation costs by working together with Solar Together.
How much do solar panels cost?
There are two key variables that determine how long your solar panels will take to pay for themselves. These are how much you pay for them and how much they save/make you per year.
The average installation cost is £4,800 for a 4kW system. That’s for 12 panels at a 330 Watt peak (or Wp). That might sound like a lot, but don’t be put off—the point of Solar Together is to help you find cheaper prices for panels and installation through group-buying.
How much do solar panels save you per year?
Again, the precise amount varies a lot, but homeowners report saving between £90 and £240 per year. Solar panels will save you more or less money based on several factors. Some of these are within your control, while some of them aren’t. In no particular order:
- Electricity production/usage: The more electricity your solar panels make, the less electricity you have to buy from the grid, and the more money you save. You could for example have more panels than average installed.
- Cost of electricity: If you live in an area with higher gas or electricity costs, or if you don’t have access to cheaper tariffs from other providers, then the value of the electricity your solar panels replace will be higher.
- The Smart Export Guarantee: The SEG allows you to send excess energy to the grid, which you’re paid for typically at around 5-6p per kWh. If you have an SEG-compliant system, and are on an SEG tariff, your panels will pay towards their own costs as well as providing savings.
- Battery storage vs. no storage: If you don’t have a battery to store the energy, and if you don’t have a SEG tariff to sell the energy back to the grid, it will go unused. This limits the amount of solar energy you have to use or sell, making it take longer for them to pay back their installation fees.
If you’re interested in saving the maximum amount possible, then you can arrange for a smart meter installation (necessary for SEG tariffs) and battery storage when you have your panels installed.
What is the payback period for solar panels?
With a little quick maths, you can figure out how long it might take. Take the estimate for the installation, divide it by the estimate of how much you’ll save per year, and it’ll tell you how many years it’ll take. For example:
£5,000 / £200 = 25 years
£4,500 / £300 = 15 years
£4,000 / £250 = 16 years
Please bear in mind that these aren’t precise estimates for your situation, nor do these prices reflect how much a system would help you save and earn. That’s because all sorts of variables like the amount of sunlight you get, how much the panels cost, how much of the variables above could make your payback period longer or shorter than average. Additionally, we didn’t take inflation into account which would further reduce the time needed to return the investment.
In other words, it’s better for you to figure it out based on your unique circumstances, rather than us guessing for you!
How to get lower-cost solar panels?
Besides maximising your panels’ output, you can also help them pay for themselves by minimising the cost of installing them. There are sensible and less-than-sensible ways of doing this; as you’ll see, going for the cheapest option isn’t always best.
Cheap panels & cheap installation
Not all panels are made equal, and some are more expensive than others. The cost can vary based on the panels’ coating, how many panels you’re having installed, who you’re having install them, and the manufacturer.
It may be tempting to try and make substantial savings at this point in the process. However, that may not be the best idea. For example, the cheaper and less experienced engineer could make one of several mistakes: they could install the panels at the wrong angle for example, or leave the cabling exposed where it can be damaged easily. Or, you could have cheaper and outdated panels installed that aren’t as efficient or effective, and therefore pay for themselves despite being cheaper.
Are there grants or rebates for solar panels in the UK?
In some parts of the world, you can make use of incentives and rebates—discounts, essentially—that give you money off solar panel installation. In the UK, there used to be interest-free loans and grants for solar panels, but these were discontinued in 2015. There are currently no plans to reintroduce these same schemes, or to replace them with new ones. Until then…
Group-buying with Solar Together
The best way of minimising the cost of installing solar panels? Doing it through Solar Together.
Solar Together is a group-buying scheme that can help you significantly reduce the cost of having solar panels installed. We work in conjunction with local authorities, grouping residents together from across the country, giving you exclusive access to a discount price on PV systems you simply can't match if you buy alone.
We vet suppliers for the quality of their service so that you don't have to. Beyond that, we even offer optional add-ons like battery storage and EV charge point installation, and insurance-backed guarantees for customer protection.
So, do you want to do your bit for the environment, and save money in the process? If it all sounds too good to be true, you can learn more through our Blog.