Average Monthly Electricity Bill With Solar Panels UK (Guide 2024)

Solar panels bring a wealth of benefits to your home and way of life. Beyond environmental reasons, installing solar panels can significantly reduce your electricity bills by providing clean, renewable energy generated at home, reducing your home's reliance on grid power. 

In this article, we'll take a closer look at the potential savings you could earn, factors that influence your solar panels’ output, and ways you can maximise these savings. 

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Solar panels reduce the amount of grid electricity your household consumes, thus bringing down your electricity bills. Solar panels do this by generating renewable energy that you can consume first, lowering the amount you need from your supplier. 

A typical 2-3 bedroom household in the UK with a 4kW solar panel system can save up to £330, according to current electricity prices (Ofgem). In the following section, we'll dissect how these savings are made up and factors that can affect the level of savings you could potentially make. 

An additional way to save on your electricity bill with solar panels is through a 'net metering' system. These systems let solar panel owners earn a rate per unit of solar energy they send to the grid. 

Therefore, you can make some additional savings from any excess solar energy your system produces that you don't use. Through the Smart Export Guarantee, energy suppliers with over 150,000 customers are required to offer tariffs to solar panel owners in England, Scotland, and Wales. 

SEG rates vary between suppliers, typically ranging from 1p to 30p per kilowatt-hour (kWh) exported. Some suppliers even offer dynamic tariffs that change every 30 minutes based on wholesale electricity prices. 

For a typical 2-3 bedroom house with a 4kW solar system, the average annual electricity bill savings is £330, which represents a 50% saving compared to non-solar households.

When combining direct savings from reduced grid electricity usage with SEG payments, the best solar panels can make a significant impact on your electricity bills. 

Solar panels don’t eliminate bills entirely. They generate no electricity overnight, meaning you will need to use grid power during this time. Additionally, winter months see reduced solar generation and higher demand, which also increases grid reliance.

The timing of energy use also impacts savings. If the home is empty during peak solar hours (10 am - 4 pm), excess energy is exported to the grid instead of being used on-site. Installing a solar battery can help store this energy for later use, helping to increase solar consumption closer to about 80%.

The Smart Export Guarantee (SEG) allows homeowners to earn £80 - £170 annually, based on the average tariff rate of 10.8p/kWh, by selling surplus energy back to the grid. 

While solar panels won’t cover all electricity costs, they significantly reduce bills and typically pay for themselves within half their lifespan. Adding batteries can further enhance savings, but will extend the payback period because of the additional solar battery prices.

Below we've listed some of the most important factors that will influence the amount of savings you can expect to make from installing solar panels:

Seasonal variations

Solar energy production fluctuates throughout the year. In summer (June - August), longer daylight hours and higher sun angles boost solar panel efficiency and output. On the other side, winter (December - February) sees shorter days and lower sun angles, reducing energy generation. This seasonal disparity impacts the amount of electricity you can generate and export annually.

System size and efficiency

The size and efficiency of your solar panel system determine how much electricity you produce. Larger, high-efficiency systems generate more energy, increasing both savings and export potential.

Solar panel cost estimates are provided by the UK government. Average annual electricity bills do not include standing charges. 

Local climate and weather

Regional differences in the UK’s climate affect solar panel performance. Areas with more sunny days experience greater energy production and higher savings compared to regions with frequent cloud cover.

Electricity prices

The average cost of electricity plays a key role in savings. Higher electricity prices mean greater savings for every unit of solar energy you generate and use. As of December 2024, the current rate of electricity is 24p/kWh. 

There are some key ways you can maximise the savings you make after installing solar panels, as we've listed below:

Dynamic time-of-use tariffs

Some suppliers offer dynamic tariffs where electricity prices can change daily or even hourly based on wholesale electricity prices. These tariffs can bring you additional savings if you align your energy use (or battery charging) with periods of lower prices.

Smart Export Guarantee (SEG) tariffs

The SEG scheme allows you to earn money by exporting excess electricity generated by solar panels back to the grid. Different energy suppliers offer varying SEG rates, which can significantly impact your savings. For example, Octopus Energy offers 30p per kWh exported during peak hours (4 - 7 pm) for customers with solar panels and an eligible battery.

Top tip: Many energy providers offer better SEG rates to their own customers. Switching your energy supplier to access higher export rates could significantly increase your earnings.

Time-of-use tariffs

Some energy providers offer time-of-use tariffs, which charge different rates for electricity depending on the time of day. These tariffs typically have lower rates during off-peak hours (usually at night) and higher rates during peak hours. 

For solar panel owners, this can impact savings in two ways:

Battery storage

Installing a battery storage system can increase your self-consumption rate by allowing you to store excess solar energy for use during non-generating hours. This can lead to greater savings, especially if combined with a time-of-use tariff.

Self-consumption rates

The percentage of solar-generated electricity you use directly (self-consumption) significantly affects your savings. The more solar energy you use yourself, the less you need to buy from the grid. For example, if you're home during the day and can run appliances when your solar panels are generating electricity, you'll save more than if you're typically away during peak generation hours.

Roof orientation and shading

Proper roof orientation and minimising shading are crucial for maximising solar panel efficiency:

Incorporating solar panels into your home is a smart way to lower electricity bills and even earn extra income through schemes like the SEG, which pays for surplus energy sent to the grid.

Solar panels lower your electricity bills by reducing reliance on grid power. A typical 2 - 3 bedroom UK household with a 4kW system can save up to £330 annually by using solar energy instead of grid electricity.

With the right setup and usage habits, solar energy can be a cost-effective and sustainable choice that upgrades your home for years to come.

Now that you're clued up on the potential savings that come with installing solar panels, the next step is to compare quotes from reputable installers. It's the most effective way of landing a good deal. 

However, who has time for hours of scouring the sea of options out there? Instead, let us connect you with the best installers in our network through our 30-second form. Their quotes are free, tailored, and come with no obligations. 

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