The variance in Solar Panel Prices is mainly down to the size of system being installed and the number of panels that are being used. As a reference point for a residential property with a sizeable south facing roof we would recommend aiming to install a 4kW solar system. This would be a large enough system to potentially power up to 50% of an average residential property. If you have a smaller roof then perhaps a 2 kW solar system might be more suitable for you. It must be stated that the amount of money earned through the Feed in Tariff scheme reduces as the size of solar system increases as illustrated in the table below:
| Size of Solar System |
Space Required |
Solar System Price |
Estimated Output per annum |
Estimated First Year Return |
Estimated Profit over 25 years |
| 1 kWp |
Approx 8m2 |
£6,000 to £9,000 |
850 kwh |
£440 |
£13000 |
| 2 kWp |
Approx 14 m2 |
£8,000 to £12,000 |
1700 kwh |
£880 |
£26000 |
| 3 kWp |
Approx 21 m2 |
£9,000 to £15,000 |
2550 kwh |
£1320 |
£40000 |
| 4 kWp |
Approx 28 m2 |
£10,000 to £18,000 |
3400 kwh |
£1760 |
£50000 |
A Breakdown of the Pricing
There are generally three expenses that make up the cost of the total installation. The solar panels themselves, the labour used in the installation itself and the inverter (that takes the Solar Panels DC charge and converts it to a usable AC current) which typically cost £800 to £1,500. The solar market works by the installers purchasing direct from the Solar Panel Manufacturers or their distributors. Manufacturers of solar panels include large firms such as Mitsubishi, Schott, Sanyo, Yingli and Sharp. The cost of your system can vary a great deal based on how well the installer has negotiated the purchase of the solar panels.
Here are a few examples of the breakdown of the costs of a Solar System installation:
- 3kwp System
- Panels – £7,000
- Inverter – £1,100
- Installation – £2,000
- Total – £10,100
- 2kwp System
- Panels – £5,500
- Inverter – £1,000
- Installation – £2,000
- Total – £8,500
When Not to Install Solar Panels
In certain circumstances it makes little financial sense to install solar panels on your property. If you have a north facing roof, it is likely that the energy generating potential of your roof is below average. In this case it is quite likely that the financial return on your initial investment in a Solar PV System return will be a lot worse than if your roof was south facing. Geographical location also plays a part in how efficient a Solar PV System will be, for example people installing solar panels in Scotland struggle to make as much as those in England. If you have a very small roof or a roof that has trees obscuring it from the sun for some of the day then it may be worth thinking about whether the system would be worth the initial investment or whether another form of renewable energy would be a more suitable option. It is worth speaking to a variety of installers to get an idea of what return you may get based on your initial investment based on the various characteristics of your home.
Solar Panel Revenue
The government introduced a scheme called the Feed-In Tariff on 1st April 2010. This new tariff allows home owners to install panels on their roof and make a pretty decent return. A home owner might generate revenue in several ways including – make money from generating electricity under the feed in tariff (41.3p per kwh) or selling any excess electricity back to the grid (an extra 3p per kwh). The household also benefits from the the money saved on their electricity bill by using the energy they generated. A home owner with a reasonable sized south facing roof may expect to make £1,000 to £1,500 per annum, with the majority of that revenue coming from Feed In Tariff.
Things to Consider when Choosing an Installer
If you decide to go ahead and install Solar PV Panels then make sure you get an installer who is MCS accredited otherwise you won’t be eligible to receive the financial benefits of the Feed in Tariff scheme. Make sure you find a solar panel installer with a reputable and proven track record of previous Solar installations and be sure to check the installation company is financially stable.