Solar energy is popular among homeowners for a reason. Everyone knows that it is a more sustainable, cost-effective, and environmentally friendly way to generate power. It can also help households become less dependent on the grid while slashing their energy bills as well.

The savings that solar energy can bring are multi-faceted. Not only can solar panels directly reduce your electricity bills, but you also have the option to sell the spare electricity your panels generate back to the grid (provided you have the necessary system set up) to make some additional income as well.

Let’s take an in-depth look at how solar panel savings contribute to your household income and give you a great return on investment in the long term.

1. How much does it cost to get a solar panel system?

Before we dive into the subject of solar panel savings, let’s take a look at how much it costs to get a solar panel system installed in your home and the factors that affect this cost.

The average cost of purchasing and installing solar panels for UK households can range from £5,000 to £11,000. Based on household consumption, a 4kW solar panel system is standard for UK households and they can cost around £7,000.

Several factors can affect the cost of solar panel systems. The main factors are the system size, the type and brand of solar panel, the cost of the installation, and any additional solar components you decide to install like a battery or a power management system.

Naturally, for bigger solar panel systems with a higher energy generation capacity, the cost will also be higher. The same can be said for the type and brand of solar panel you choose as certain solar panels have more power generation capabilities, durability, and maintenance requirements.

As for the installation process, it is worth doing your research and finding a reliable solar panel installer so that you can make sure your investment does not go to waste in the later stages of getting a solar panel system.

2. How do solar panel savings work for UK households?

With the typical 4kW solar panel system mentioned above, a UK household can save anywhere from £226 up to £580 on energy bills annually.

Solar panel savings also work differently for the different types of households that can be seen around the UK.

For example, a terraced house with a solar panel can save up to £247 per year on the electricity bill. What’s more, adding a solar battery to the system can boost these savings to more than double—granting savings up to £586 per year.

For a semi-detached house, a solar panel system can save up to 25% of their electricity bill annually while adding battery storage can boost this by almost 150%—granting savings up to £895 per year.

For bungalows, savings would be around £300 annually, with a battery storage system boosting it up to £791.

That’s not all, the UK also has multiple government-backed incentives for solar energy adoption. The Smart Export Guarantee (SEG) is the focal point in this case—allowing small-scale generators like households to get paid for the excess energy they generate and send back to the national grid via certain electricity suppliers, known as SEG Licensees.

The ECO4 (Energy Company Obligation Scheme) is another incentive scheme that allows households, especially low-income ones, to get funding for a variety of solar energy projects, including solar PV installations. The scheme allocated £4 billion between 2022 and 2026, indicating an increased focus on encouraging UK residents to adopt solar energy.

Additionally, the VAT for solar panels is 0%, for both the panels and the installation. This makes the process of actually getting a solar power system installed significantly cheaper. The 0% VAT rate is applicable until March 2027.

3. Find a reliable solar panel installer and reduce your costs even more

Solar energy is a great way to save up on energy bills, especially during this time when energy bills are consistently going up. The average solar panel system used by UK households can save up to £580 on energy bills annually.

You can bump up your solar panel savings even more by choosing an installer that can deliver reliable, tailored services. To find such an installer, you have to properly understand the nature of your project, understand the financial incentives available to you, check the installers for licences and certifications, and speak to them about the project.