What solar panels cost

A domestic solar installation is quoted as one number, and that number hides almost everything you need in order to judge it. Two installers can look at the same roof, specify a system of the same size, and give you prices that differ by several thousand pounds. Neither of them is necessarily wrong.

This hub explains what you are actually paying for, which parts of a quote are fixed costs and which are margin, and how to compare two documents that have been deliberately formatted so they cannot be compared easily.

The one number that matters is not the total

The headline price tells you very little on its own, because it says nothing about what you get for it. The comparable figure is cost per installed kilowatt peak: divide the total price by the system size in kWp.

Work it out for each quote you hold:

1. Find the system size in kWp. It is usually near the top, sometimes written as the panel count multiplied by the panel wattage.
2. Divide the total price, including VAT, by that number.
3. Compare the results.

A quote that looks expensive often turns out to be specifying a larger system, and a cheap one is frequently smaller than you assumed. Once you have the cost per kWp, the difference that remains is a real difference: better equipment, harder access, or margin.

What is inside the price

Roughly, a domestic quote is made of:

• Panels. The most visible cost and rarely the largest one. Panel prices have fallen a long way; they are no longer where the money mostly goes.
• The inverter. A significant cost, and the component most likely to need replacing during the system’s life. A hybrid inverter, which can run a battery later, costs more than a plain string inverter.
• Mounting and labour. Roof type drives this. Slate is slower and more fragile than concrete tile. A steep or awkward roof costs more.
• Scaffolding. A fixed cost that barely changes with system size, which is why very small systems have poor cost per kWp.
• Electrical work. Isolators, cabling, the consumer unit, and the connection itself.
• Certification and paperwork. MCS registration and the network operator application. These are what make you eligible for export payments.
• Margin. Every business has it. The question is not whether it is there but whether it is proportionate.

Scaffolding and certification barely move with system size. That is the single most useful thing to know about solar pricing, because it means the economics improve as the system gets bigger, right up to the point where your roof or your usage runs out.

Why bigger is usually cheaper per unit

Because a large share of the cost is fixed, adding panels to an existing job is much cheaper than the average price per panel suggests. The scaffolding is already up, the installer is already on site, and the paperwork is already being filed.

This is why “how much do solar panels cost” has no useful single answer, and why quotes for four kilowatts and six kilowatts are often much closer together than you would expect.

It is also why undersizing is a common and expensive mistake. If your roof and your usage can support more, the extra capacity is the cheapest capacity you will ever buy.

What the quote will not tell you

Two things are routinely absent from a quote and both change the return:

The generation estimate. Most quotes carry an annual generation figure in kilowatt hours. It is produced by a model, and models vary in how optimistic they are about shading, orientation and losses. Ask which tool produced it and what shading assumption it used. A generation figure that is ten per cent high makes the payback look about ten per cent better than it will be.

What you will actually use. The saving depends far more on how much of your own generation you consume than on how much you generate. A unit you use is worth what you would have paid to import it. A unit you export is worth the export rate, which is typically a fraction of that. Two identical systems on two identical roofs can return very different amounts because the households behave differently.

Grants change the price, but fewer exist than advertised

A large amount of the material online about solar funding is lead generation rather than information. Schemes that closed years ago are still described in the present tense, and eligibility is routinely overstated.

What genuinely exists varies by UK nation, and the Scottish, Welsh and Northern Irish positions are all different from the English one.

How to use this section

If you are collecting quotes, start with how to read one and what the line items mean. If you are still deciding whether to bother, the payback question is the one to answer first, because a cheap system with a poor return is still a poor investment.

Whatever the quote says, the way to test it is to put your own figures into a model that shows its working, rather than accepting a savings number produced by the company that wants the sale.