Solar panel cost and funding
Here you will find the details about the cost, available funding, and full costs and savings for two example projects.
The costs of a PV system can be offset to some extent by savings on traditional roofing or facade materials when PV is integrated into a new building or where roofs or walls are being replaced. Cost will usually depend on factors such as:
- the complexity of the project
- ease of roof/ site access
- the type and structure of the building
- the type of photovoltaic panel used
- mounting structure or inverter used
- the need for planning permission or Environmental Impact Assessment.
The inverter will probably require replacement over a system life span, which costs £1,000 to £2,000 in a domestic system. For a commercial system, the inverter is likely to constitute 10 to 20 per cent of project costs.
Photovoltaic solar panels are eligible for the feed-in tariffs and guaranteed for 25 years. The income for both the generation and export tariffs is tax free. The income for the generation tariff is paid regardless of how much electricity you use. While the income for the export tariff is paid if you don't use some of the electricity generated.
For PV to qualify for the feed-in tariffs, installers and equipment accredited under the Microgeneration Certification Scheme must be used. For more information about the feed-in tariffs see:
Finances for two example projects
Example 1: solar panels on a home or office
This is a retrofit project to put a 2 kW panel on a home or office. It is eligible for the feed-in tariffs and some of the electricity is used in the building:
- capital cost of £9,000
- earn £753 per year from the feed-in tariffs
- save up to £221 per year in reduced electricity bills
- simple payback of 10 to 13 years.
In total, you will receive between £751 and £923 in income and savings depending on how much electricity you use and export.
Example 2: solar panels on 100 homes
This is a retrofit project to put PV solar panels on 100 homes (total size 200kW). The project is eligible for the feed-in tariffs and the homes use some of the electricity:
- capital cost of £600,000
- earn £54,910 per year from the feed-in tariffs
- save up to £22,100 per year in reduced electricity bills (£221 per household)
- simple payback of 8 to 11 years
In total, you will receive between £54,910 and £71,910 in income and savings depending on how much electricity you use and export.
A more detailed cost breakdown of these examples is available here:
1 May 2012