Solar Panels

Breakdown of solar panel earnings and costs

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Page last updated 04 March 2013

Installing your own solar PV system brings with it a range of costs and financial benefits. We've summarised the key financial information in this breakdown of major solar panel costs and earnings.


Standard solar panel costs

The standard solar PV costs associated with any installation depend on your system's brand, efficiency and power generation capability. Standard costs include:

  • Equipment and installation costs of between £2,500 and £15,000 depending on the size and quality of your system. (A typical 3.5kWp system, which has the potential to provide you with up to 75% of your electricity needs, costs around £6,500.)
  • A fee of between £60 and £120 for an Energy Performance Certificate, which you need before you can receive payments under the Feed-In Tariff (FIT) scheme.

All these initial costs can be offset against future profits, and financial assistance is available for those who need it. For more information, see our guide on Solar Panel Costs.

Additional solar panel costs

On top of these standard costs, you may need to pay for:

  • Repairs and improvements to your roof if it is not capable of handling the weight of a solar PV system.
  • Planning permission if your property does not meet the government's minimum requirements for a "Permitted Development".
  • Clearance of any overhanging branches, which may shade your system and reduce its efficiency.
  • Maintenance of your system, including new solar inverters every ten years or so and the cleaning of the panels themselves.

Potential solar panel earnings

There are significant solar PV earnings to be made over the average 25-year lifespan of your system. A large portion of earnings will come from the government's FIT scheme, which guarantees a fixed income for 20 years from the date of installation of your panels. Potential earnings include:

  • Between 7.1p/kWh and 16p/kWh for the electricity that your system generates. (An average of 15.44p/kWh for a typical 3.5kWp system.)
  • An additional 4.5p/kWh for surplus electricity that you sell back the grid.

On top of these FIT earnings, you also benefit from a large reduction in your energy bills, with the average system generating up to 75% of your annual power usage. You can find out more by reading our guide to Solar Panel Earnings.

Lifetime solar panel earnings

The longer you have your system installed, the greater your solar PV earnings. The average solar panel system pays for itself after around ten years. This table shows how much you can expect to earn from a typical 3.5kWp system, costing £6,500:

Year Cumulative Generation Earnings Cumulative FIT Payments Cumulative Electricity Savings Total Profit
1 £460 £53 £375 -£5,612
5 £2,300 £625 £1875 -£2,060
10 £4,600 £530 £3750 £2,380
15 £6,900 £795 £5625 £6,820
20 £9,200 £1,060 £7,500 £11,260

* Figures based on generation of 3,000 kWh per year, with an average of 1,180 kW fed back into the grid, an annual electricity bill of £750 and a 50% bill saving.

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