Solar Panel Costs Over Time
A 4kW solar system - right for most UK homes - costs £6,000-£8,000 fully installed in 2026. That's higher than the figures you'll see on older comparison sites, which haven't kept up with installer labour costs. The panels themselves are cheap; installation, inverters, and scaffolding aren't.
Here's what the numbers actually look like, and what's driven them to where they are.
How Prices Have Fallen Over 20 Years
Solar panels cost around £10 per watt in the early 2000s. By 2010 that had halved to £5. By 2020 it was down to £2. In 2026, panels alone cost around £0.20-0.30 per watt at the component level - a 97% reduction in two decades.
That figure doesn't translate directly to what you pay an installer, because labour, scaffolding, inverters, and electrical work make up 40-50% of a typical quote. But it explains why a system that would have cost £40,000 in 2005 now costs £6,000-£8,000.
The driving forces are manufacturing scale, automated production, and competition from hundreds of global suppliers. Panel efficiency has also risen from around 10% to 20-24% for standard monocrystalline models, meaning fewer panels deliver the same output.
Current Costs by System Size (2026)
| System | Panels | Annual generation | Installed cost |
| 3kW | ~8 panels | ~2,550 kWh | £5,000-£7,000 |
| 4kW | ~10 panels | ~3,400 kWh | £6,000-£8,000 |
| 6kW | ~14-15 panels | ~5,100 kWh | £9,000-£12,000 |
0% VAT applies to all residential solar installations until March 2027.
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What's in the Installed Price
Panels account for roughly half a typical quote. The rest breaks down as:
- Inverter: £600-£1,500. String inverters cost less; hybrid inverters (battery-ready) cost more.
- Mounting system: £300-£600 depending on roof type.
- Electrical components and consumer unit work: £200-£500.
- Scaffolding: £400-£800 for a standard two-storey house.
- Labour: £800-£1,500 depending on system complexity and access.
- MCS certification and commissioning: included in most installer quotes.
Optional additions: battery storage (£2,500-£6,500), power optimisers (£50-£80 per panel), and extended warranties (£200-£500).
Payback and Returns
At the current Ofgem electricity rate of 24.5p/kWh, a 4kW system in Hampshire generates electricity worth around £700-£800 per year to a household that uses most of it during the day. Add Smart Export Guarantee (SEG) income - the best fixed rates in 2026 are 25p/kWh (Good Energy) and 24p/kWh (EDF) - and total annual benefit runs to £900-£1,100 without battery storage.
Payback periods:
| Scenario | Typical payback |
| 4kW system, no battery | 7-10 years |
| 4kW system with battery | 9-12 years |
| High energy user (EV, heat pump) | 6-8 years |
| Low energy user, small system | 10-13 years |
View our battery storage service
Financing Options
Cash purchase gives the best long-term return with no interest to pay.
0% finance spreads the cost over 3-7 years. Available through some installers and green finance providers.
Warm Homes Plan (replaced ECO4 in April 2026): interest-free loans for eligible homeowners, and fully funded packages worth up to £30,000 for low-income households. Check eligibility through your local authority or viaour grants page.
Green mortgages: some lenders offer better rates for energy-efficient properties. Worth checking if you're remortgaging at the same time.
What to Expect From Prices in the Next Few Years
Panel costs will continue falling. The consensus among industry analysts is a further 20-30% reduction in panel prices by 2030, driven by next-generation cell technologies including perovskite and tandem cells. Battery costs are falling faster - 40-50% reduction in storage costs is a reasonable expectation by 2030.
Installation costs are less likely to move. Scaffolding, labour, and certification costs track general construction inflation rather than technology trends. The total installed price of a 4kW system in 2030 will probably be lower, but not dramatically so - the savings from cheaper panels get partially offset by stable or rising labour costs.
Electricity prices show no sign of returning to pre-2021 levels. The payback case gets stronger if prices rise further; it stays solid even if they hold steady.
Regional Price Variation
Installers in London and the Southeast typically quote 10-15% above the national average, reflecting higher labour costs and demand. Scotland runs 5-10% higher due to logistics. Wales, the Southwest, and northern England sit around the national average.
Hampshire falls in the favourable band - close enough to distribution hubs to avoid logistics premiums, with better solar irradiance than most of the UK.
FAQ
Is 2026 a good time to buy, or should I wait for lower prices? The electricity you'd generate between now and any future price drop costs you more than you'd save waiting. At 24.5p/kWh and current generation rates, a 4kW system produces around £750 worth of electricity per year. Waiting two years to save £500 on the system price isn't a good trade.
Do cheaper systems perform significantly worse? Panel quality matters less than it did a decade ago. Mid-range panels from established manufacturers perform within 5-10% of premium equivalents over a 25-year period. The bigger risk in budget installations is component quality (inverters, connectors) and installer workmanship rather than the panels themselves. Check MCS certification and ask for local references.
How much does a battery add to payback time? A 5kWh battery costing £3,500 installed pushes payback from around 8 years to 10-11 years in most cases. The financial case for battery storage is stronger if you're on a time-of-use tariff, have an EV to charge overnight, or heat pump to run.
Will solar panels increase my home's value? Solar Energy UK research puts the uplift at 1-2% for a typical UK home - around £2,000-£5,000 in most Hampshire markets. A better EPC rating (solar typically pushes a D-rated home to C or B) also matters for buyers and lenders.
What happens to the SEG if I add a battery? A battery reduces what you export, so your SEG income falls. The electricity you keep and use yourself saves more per unit (24.5p) than you'd earn exporting it (4-25p depending on tariff), so this is financially beneficial overall.
CRG Direct has installed solar panels across Hampshire since 2017. MCS Certified, HIES Accredited.
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