I’m sure you will agree that energy bills are getting pretty expensive.
But it doesn’t have to be like that.
There is one easy way to stop rising costs and protect your home and family for the next 25 years.
- The average home needs a 3kw solar system. The cost for this ranges from £4000 to £7000 + VAT.
- Solar panel costs are continuing to fall inline with Swanson law (20% decline for every doubling of shipped volume). This translates into a decline of 10% a year since 1980, and a 61% drop from 2010 prices.
- Solar savings can be increased by adding a battery storage system. Which stores power generated during the middle of the day, when grid costs are highest. For use in the evening when most energy is used.
- Installing solar panels can give you a £4000+ profit for larger systems, along with a 50% saving on your electric bill.
- Ready to compare the top solar quotes in your area? Click here to get prices now!
In this guide you will find:
» Cost of home solar panels
» Cost of commercial solar panels
» Why solar panel prices are going down
» How you make money with solar
» How much you can save with solar
» Are free solar panels worth it?
» What size solar array should you get?
» How long do solar panels last?
Costs of Solar Panels for Home Use
It’s tough to find accurate solar panel prices online, there are many reasons for this. Every install can vary in time by as much as 70%, every roof has a different pitch and access route which can speed up, or slow things down. The type of panels, roof material and grid connection can also play a part.
That’s not good enough. So we surveyed 11 local and national solar panel installers for prices, the most expensive and cheapest removed for accuracy and the remaining 9 were averaged to get the following price:
16 solar panels (4kw), inverter, installation, grid connection, 25-year warranty.
You might be wondering:
What about prices for other sized systems? The good news is we have also obtained ball park prices for 1 – 4kW home installations, and 10 – 100 kW commercial systems below.
Most residential or domestic solar panel arrays range between 1 and 4 kW, with some going up to 10kW. These still vary in size depending on the brand and installation method, but the following includes average rates per system.
|System Size||Estimated Cost||Estimated Output||Tons of Co2 Saved||Estimated First Year Returns||Estimated Profit over 20 Years||Roof Space Required|
|1 Kw||£2,500-3,200||850 kWh||10||£130||£100||8sq m|
|2Kw||£3,200-4,800||1,700 kWh||20||£222||£562||14 sq. m|
|3Kw||£4,000-7,000||2,550 kWh||30||£316||£1,320||21 sq. m|
|4Kw||£6,000 – 8,000||3,400 kWh||40||£404||£2,080||28 sq. m|
These costs will vary depending on your preferred brand, the cost of the installation, and specific technology choices. The estimated profits and first year returns are based on current FIT rates.
Cost of Solar Panels for Commercial Use
Commercial solar panels are typically larger, provide more power, and require more space. However, they also generate more returns. Again, costs can vary a great deal, but the following includes a look at average prices in the sector.
|System Size||Estimated Cost||Output||Tons of Co2 Saved||Estimated First year Returns||Time to Pay Off||Roof Space Required|
|10 Kw||£16,000-20,000||8,440 kWh||100||£1,060||16-18 Years||64sqm+|
|25Kw||£30,000- 40,000||21,100 kWh||250||£1,616||18-21||160sq. m|
|50 Kw||£60,000-70,000||42,200 kWh||500||£2,323||20.3||320 sq. m|
|100 kw +||£200,000+||84,800 + kWh||1000+||£5,050+||16-21||640 sq. m|
These rates and prices are all based on the current cost of solar panels, as well as current FIT rates as of June 2016
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How Long do Solar Panels Take To Install?
Survey to provide firm quote: 1-2 hours.
Inspection of electrics and taking final measurements: 1-3 hours.
Scaffolding erected to gain safe access to the roof: 4-5 hours.
Installing the panels: 4-5 hours.
Installation of electronics: 3-6 hours.
Tidying up and removal of scaffolding: 3 hours.
Total: 16 – 24 hours
Why are Solar Panel Prices Going Down?
The cost of solar panels is constantly going down. In fact, data shows that prices have dropped nearly 45% year over year since 2008, for a total cost reduction of more than 70%.
For example, in 2010, a 4 kW array cost around £15,000 to install, and the current average in 2017 is right around £6,500. The same applies across all levels of solar, as prices have reduced dramatically in the industry.
This price reduction is mostly a result of advancing technology making it easier and more affordable to produce the semiconducting materials which absorb sunlight.
This also benefits buyers in the fact that technological advances are making modern solar panels more efficient at converting sunlight to PV power, resulting in lowered prices, and higher production.
Other factors contributing to reduced costs of solar panels include lowered VAT, lowered production costs, and larger companies, who can produce panels more affordably. Government schemes, which provide incentives for people to purchase solar, also increase demand, which, in turn, lowers pricing.
International Renewable Energy, Renew Economy, and Deutsche Bank all predict that the cost of solar will continue to drop, by as much as 40% in the next two years. With a 40% decrease in the cost of solar by the end of 2017, solar will achieve grid parity in about 80 per cent of the world, including the UK, meaning that it is profitable or break even, even without government incentives like the FIT program.
How Do I Make Money with Solar?
You can earn money with solar in three ways. You save money on your electric bill by replacing some of the energy you would otherwise purchase with solar PV. The government also pays for solar power you use and do not use through the Feed in Tariff.
How much you earn depends on the FIT rate you qualify for, your grid sell back rate, and how much you save on your energy bills.
How Much Can I Save with Solar Panels?
Saving money is one of the main reasons that many people chose to install solar on their homes and businesses. While not the main goal of using solar, it is something to consider.
Importantly, the exact rates will vary depending on your homes suitability for solar, the size of the array, the quality of the array, and what you chose to do with the energy provided. The following estimates are therefore just that, but do offer a good overview of what you could save.
One very important consideration is that earnings can change a great deal depending on which FIT rate you qualify for. For example, the January 1st 87% cut to the FIT rate affected earnings will a great deal, but you can still earn an average of a 4.8% return on solar over 20 years.
|Source||Before Dec. 2015||After Jan 2016|
|Electricity Bill Savings||£126||£125|
|Total per year||£673||£266|
Electricity Bill – Saving money on your electricity bill is the easiest way to save using solar PV. You generate solar power with your array, direct it into your home power system using an inverter to change it from DC to AC, and use it to run your lights, refrigerator, washing machine, etc. One consideration is that with a standard grid tie in system with no power storage, you only provide your own power during the day. This can save you around £126 per year with a 4 Kw system. With a battery power storage system, you can save more by utilizing more power, but you will be spending more when you purchase the system.
FIT Rate – The FIT rate is the government incentive for using solar power. You are paid for power that you generate and use, whether you sell it back to the grid or not. This rate varies a great deal depending on your EPC rating, the size of your system, and when you sign up for the FIT rate. The 2017 FIT rate in 2015 is around 4.39p per kWh, which translates into £61 per year with a 3-4 kW system (or about £404 per year including all deductions, and reduced electric usage).
Export Tariff – You can also get paid for the energy that you sell back into the grid. While rates are low, you can get around 4.85 pence per kWh as of 2017, for an average annual earnings of £79 per year with a 4 kW system. This rate is not expected to change, but may go up as the cost of electricity rises.
What About with Reduced FIT Rates?
Most homeowners will be looking at earnings of about 4.8% over 20 years, although some panels might not break even until well after the 20 year mark. However, with the falling costs of solar panels, the price of a 4Kw system only has to drop by some 14 per cent to achieve a break-even rate with no FIT program. With predictions suggesting that solar panels could drop as much as 14% by the end of 2017, that’s already highly likely.
What is the Likely Return on Investment for Installing Solar?
Depending on when you install solar panels, you may see a large return, or a small one. Homeowners who install panels after January 1, 2016 are likely to break even, or have a slight loss after 20-25 years if purchasing solar at the current rate. Calculate your your likely return here with our solar panel calculator.
Is Solar Panel Financing a Good Idea?
If you don’t have money for installing a solar panel array on your own, you can get funding from a variety of places. In some cases, you may qualify for government grants such as the Green Deal Financing and assistance, assistance from organizations, and much more.
Financing can be a great idea, because it allows you to purchase a system that you wouldn’t otherwise be able to afford. However, you should pay close attention to interest rates to ensure that you are getting a good deal.
Are Free Solar Panel Schemes Worth It?
Free solar panel schemes are popular, and plentiful, and for good reason. They offer ‘free’ solar panel installations to homes, allow them to use the solar, but keep all of the FIT generated earnings.
This will translate into an average of £125 saved per year for a 4 kW system, but no more.
These savings will go up as the cost of electricity and fuel raises. You also won’t own the system, and will have to sell it with the house or home. These systems are advantageous in that you don’t have to spend anything to get it, and that you can save a small amount of money.
However, if FIT rates go up,you will not benefit from them. However, if you don’t have the capital to invest in a solar array but still want to help the environment, a free solar panel system may be a good option. You can see if solar panels are still worth it in 2017 here.
What Size Solar Panel Array Should I Get?
The number of panels on your roof should depend on the available space on your roof, your energy needs, and your budget. The more panels you install, the more quickly you can earn money back, because you generate more power.
However, most homes only have enough space for a 4 kW system, which is about 15 panels. A 10Kw system is usually made up of 40 panels, and requires considerably more space. If you don’t know the number of square meters available on your roof, many solar panel installers will come out and offer a free inspection, with a recommendation for the number of panels.
You should also pay attention to the brand, because some panels are more efficient than others. For example, a solar panel brand that is £500 more expensive may generate as much as 14% more energy, which adds up considerably over time.
Is My Roof Suitable for Solar Panels?
The easiest way to find out if your roof is suitable for solar panels is to ask for an EPC inspection. You are required to have an EPC inspection in order to qualify for the FIT rate, as the EPC rating determines which rate you qualify for. Some solar panel installers will reimburse you for the cost, or provide it as a free service.
If you have a D rating or higher, then your roof is suitable for solar. While a south facing roof has the highest potential for solar PV generation, you do not need one to generate power.
Instead, you want an unshaded roof that gets around 2 hours or more of direct sunlight per day. East and west facing roofs produce about 15% less power than a south facing roof.
How Long do Solar Panels Last?
Depending on the brand, solar panels might last anywhere from 25 to 50 years. Most modern solar panels have generation guarantees of 80-90% efficiency from factory efficiency at 25 years, meaning that they will continue to produce power after 25 years, but the rate will gradually decrease.
For this reason, most PV installations, and most solar panels, have a warranty or guarantee of 25 years.
What are the Risks of Installing Solar?
Installing solar panels is relatively low risk because with no moving parts, low cost of cleanup, and high life expectancy, they require very little maintenance.
While you should invest in cleaning your panels regularly, and you may have to replace your inverter every 5-10 years (choosing an inverter with a 10-year warranty reduces risks), there are no real risks associated with installing solar, unless you do the installation yourself, or the wiring is performed incorrectly.
For this reason, you should always choose an MCS accredited installer. You can reduce risks even further by adding the panels to your home insurance policy.
Solar panels are an investment, but they do provide returns, in cash and for the environment in the form of reduces Co2, reduced usage of non-renewable energy sources, and less consumption of resources.
This, in turn, benefits you as well as the earth, providing cleaner air, a healthier ecosystem, and in some cases, more money in your pocket. At the least, you will reduce your energy bills for the foreseeable future, while doing something good for the environment.
The best way to make sure you are getting a good deal on your solar panels is to compare quotes to get the best rate. This allows you to make your money back as quickly as possible, without having to choose lower quality panels.
You can search for your local solar panel installers to ask for quotes, check to see how much you can earn with our free solar earnings calculator or use our free service, and we will compare quotes for you.