Along with their environmental credentials, a key factor when deciding whether solar panels are worth it for your home is the answer to a simple question: how much money can they save on your energy bills?
Exactly how much you’ll save depends on several factors, including the size and efficiency of your solar panel system, how much electricity your household uses, and whether any excess electricity generated by the panels can either be sold back to the grid or stored in a battery for use later.
The current cost of electricity can also affect how much money you’ll save, since generating your own power will have a bigger impact on your bills when the cost of power bought from the grid increases. And, similarly, the calculation will be affected by how much you can earn by selling electricity generated by solar panels back to the grid. All of this must then be weighed up against the cost of solar panels, which for a larger system with a battery can be substantial, and what solar panel grants are available to help lower that outlay.
Below, we explain how much different households could save with a solar panel system, how long it can take to recoup the installation cost and how to calculate potential savings for your own property.
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How much can solar panels save on energy bills?
Solar panels can save a typical UK household hundreds of pounds per year by reducing the amount of electricity it needs to buy from the grid. Any surplus electricity can also be sold back to the grid through an export tariff, providing an additional financial benefit, or stored in a home battery and used later. For example, solar panels can help power a home and charge a battery during the day, then the battery can be used to help power the home at night.
Exactly how much money can be saved depends on the size of your solar panel system, how much electricity it generates (which can vary with location, roof orientation, shading and weather), and how much of that energy is used by the home itself. Even a small solar panel installation will help lower a home’s demand for electricity from the grid – and of course there are plug-in solar panels available now too.
According to the Energy Saving Trust, a typical 4.5kWp solar panel system costs around £7,600 to install and could save a household in London between £900 and £930 a year, including earnings made from exporting surplus electricity. These figures fall to between £740 and £810 a year in Manchester, and to between £680 and £740 in Stirling. Electricity use during daylight hours can have a significant impact on these amounts. These are all calculated using a detached, four-bedroom house, and with fuel prices from July 2026.
Based on the same calculations, the Energy Saving Trust estimates a typical 4.5kWp solar system will pay back its installation cost in nine years in London, 10 to 11 years in Manchester, and 11 to 12 years in Stirling.
The exact payback period depends on factors like location, exposure to sunlight and how much of the electricity generated is used by the household. These estimates were accurate as of summer 2026 and don’t account for future energy prices, inflation, maintenance or replacement costs.
How to calculate your own solar panel savings
To work out how much you could save with solar panels, you’ll need to know how much electricity your system is expected to generate each year, how much of that electricity you’re likely to use, and the rates both for what you pay for electricity from the grid and what you’ll receive for exporting surplus power.
To start with, take the amount of solar electricity you expect to use at home (measured in kilowatt-hours, or kWh) and multiply it by the unit rate charged by your electricity provider. This gives you the amount saved by using your own solar-generated electricity instead of buying it from the grid. Now multiply the amount of electricity you expect to export by your provider’s export tariff, and add the two figures together.
For example, if your solar panel system generates 3,500 kWh per year and you use half that, 1,750 kWh of grid electricity is avoided. If electricity is 26p per kWh, that would save £455 a year. Export the other 1,750 kWh of generated but unused electricity at, for example, 12p per kWh, and that’ll generate another £210. Add those together and the total annual benefit in this example is almost £670.
The Energy Saving Trust has a useful tool for calculating how much you could save and how long it will take to recoup your investment.
Read more: Best solar panels, reviewed
Do solar batteries increase how much solar panels save you?
Adding a solar battery can increase how much you save with solar panels by storing surplus electricity generated during the day, then powering the household with it later. This is particularly useful for homes that are empty during the day, since otherwise power generated by daylight gets exported; with the battery, that power is saved, ready to use when you’re home again in the evening, and overnight when the solar panels produce no electricity.
Without a battery, excess power is exported to the grid. This can generate income through an export tariff, where you’re paid for each unit of energy created by your panels and exported to the grid. However, the price received can be lower than the price of buying electricity from the grid later. Depending on your import and export tariffs, storing that energy yourself and using it later can therefore be more cost-effective than exporting it.
That said, adding a battery to your solar panel system can add thousands of pounds to the installation cost. The battery is also likely to need replacing before the panels, since its cells generally don’t last as long and it will gradually store less energy as it ages. So, while the battery can reduce your energy bills by more than having solar panels alone, it won’t necessarily reduce the amount of time it takes for the entire system to pay itself off.
Do solar panels save money on cloudy days?
Yes. Solar panels continue to generate electricity on cloudy days, but their output is lower compared to bright and sunny days. This means they can still reduce the amount of electricity your home needs to buy from the grid, even during overcast weather through the autumn and winter months.
It is important to remember that solar panels respond to daylight rather than heat, so they don't need a hot summer’s day to perform at their best. They can still perform well on a crisp, clear winter day, although shorter daylight hours mean a system will generally produce much less electricity during a winter day than in the summer.
Output also falls in the hours around dusk and dawn, and no electricity is produced at night. For more on this, see our guide to whether solar panels work in winter and on cloudy days.
Read more: My honest review of Octopus solar panels
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