How Much Do Solar Panels Cost?
A typical domestic solar panel system in the UK costs between £5,000 and £10,000 depending on the size, panel quality and installation complexity. A standard 4kW system suitable for a three-bedroom home costs around £6,000 to £8,000. Adding a battery storage system increases the cost by £2,000 to £5,000 but lets you store excess energy for use in the evening.
Installation costs have fallen significantly over the past decade, and VAT on domestic solar panel installations has been reduced to 0% until at least March 2027, making now a particularly cost-effective time to invest.
Energy Savings and Payback Period
A well-positioned solar panel system can cut your electricity bills by £400 to £800 per year, depending on your energy usage, the system size and how much solar energy you use directly rather than exporting to the grid. With the Smart Export Guarantee (SEG), you can also earn money for surplus electricity you export.
The typical payback period for solar panels in the UK is now around 8 to 12 years, after which you're essentially getting free electricity for the remaining life of the panels (usually 25 to 30 years). If you're remortgaging anyway and adding the cost to your mortgage, the monthly energy savings may cover or exceed the extra mortgage payment from day one.
Impact on Property Value
Solar panels generally increase a property's value, particularly as energy efficiency becomes more important to buyers. An EPC (Energy Performance Certificate) rating improvement can make your home more attractive on the market and may qualify buyers for green mortgage deals with better rates.
However, there's one important caveat: if solar panels were installed under an old lease arrangement (where a third party owns the panels on your roof), this can actually complicate a future sale. Panels you own outright are always preferable from a property value perspective. Most modern installations are owner-purchased.
Lender Attitudes to Solar Panels
Most lenders are comfortable with solar panels as a reason for capital raising, especially as the government pushes for improved home energy efficiency. Some lenders even offer green mortgage products with preferential rates for energy-efficient improvements, which could further reduce your borrowing costs.
If you already have solar panels under a lease arrangement (where a company owns the panels on your roof), some lenders have historically been cautious about lending on the property. Owning your panels outright avoids this issue entirely and is the standard approach for new installations today.
Important: Your home may be repossessed if you do not keep up repayments on your mortgage. There will be a fee for mortgage advice. The actual rate available will depend on your circumstances. Think carefully before securing other debts against your home.