Solar panels will be mandatory on all new homes in England from 2025, a policy that adds roughly £2,000 to £4,000 to build costs but could cut a typical household’s electricity bill by up to £800 a year. Ed Miliband, the Energy Security and Net Zero Secretary, confirmed the mandate in a speech last week, as reported by The Telegraph. The move is part of a broader push to decarbonise the UK’s housing stock, which accounts for around 17% of national emissions.
Who qualifies, and who doesn’t
The mandate applies to all new homes in England, including flats and houses, from January 2025. Existing homes are not affected, but the government is consulting on extending the requirement to major renovations. The policy covers all new-build developments, regardless of location or orientation. Builders must install a minimum of 1.5 kWp of solar panels per home, roughly equivalent to four to six panels. Homes with north-facing roofs or heavy shading are not exempt, though developers can apply for a waiver if they can prove the panels would generate less than 50% of the expected output. The Energy Saving Trust estimates that a typical 3-bed semi with a 3.5 kWp system (around 10 panels) can save £600-£800 a year on electricity bills, assuming 50% of the electricity is used on-site.
What it costs a typical 3-bed semi
For a homeowner buying a new-build, the upfront cost of solar panels is rolled into the purchase price. Builders typically pay around £1,500-£2,500 per kWp installed, so a 3.5 kWp system adds about £5,000-£8,750 to the build cost. That translates to roughly £2,000-£4,000 extra on the final sale price, once developer margins are included. Over 20 years, the savings on electricity bills, currently around £700 a year for a typical semi, would more than offset that cost. With the Smart Export Guarantee (SEG), households can also sell excess power back to the grid at around 5p-10p per kWh, adding another £100-£200 a year. The catch: the savings depend on how much of the generated electricity you use during daylight hours. Households that are out all day may export more and save less. Ofgem data shows that the average export rate is about 40% of generation for homes without battery storage.
But what about the sun? Or lack of it
Critics argue that solar panels are less effective in northern England, where annual sunlight hours are lower than in the south. That’s true, but the difference is smaller than many assume. A 3.5 kWp system in Manchester generates around 2,800 kWh per year, compared to 3,200 kWh in Brighton, a 12% gap. Even in winter, panels produce about 60% of their summer output on clear days. The bigger variable is shading from trees or neighbouring buildings, which can cut generation by 30-50%. The policy requires builders to site panels on the most favourable roof slope, but not to fell trees or redesign plots. Homebuyers should check the orientation and shading of their specific home before committing. The EPC impact is significant: a home with solar panels can jump from Band C to Band A or B, adding £10,000-£20,000 to its market value, according to estate agent data cited by the Department for Levelling Up.
What to do next
If you’re buying a new home after January 2025, you can expect solar panels as standard. Ask the developer for the estimated annual generation figure and the SEG tariff they recommend. If you already own a home, you can still install solar panels under the current Boiler Upgrade Scheme, which offers a £7,500 grant for heat pumps but not for solar alone. However, the Energy Company Obligation (ECO4) scheme may cover solar panels for low-income households. The government’s zero-VAT rate on solar installations (20% removed until 2027) remains in place. For new-build buyers, the key deadline is 1 January 2025, after that, solar panels are no longer an optional extra, but a legal requirement.
Frequently Asked Questions
Yes, but the increase is modest, typically £2,000 to £4,000 extra on the sale price, which is offset by annual electricity savings of £600-£800 and an EPC boost that can add £10,000-£20,000 to property value.
Builders must install panels on the best available roof slope, but can apply for a waiver if generation would fall below 50% of expected output. Check the developer's generation estimate and consider whether a waiver has been granted.
