The price of grid electricity has risen 75% since 2019, from 16p per kWh to 28p per kWh under the current price cap. That single number reshapes the economics of rooftop solar for every UK household considering it.
New modelling by MakeMyHouseGreen, reported by Pressat, finds that a typical 4 kW solar array installed today saves £1,018 a year on electricity bills. The same system fitted in 2019 saved just £720. That is a 41% increase in annual savings, and the gap will widen as retail tariffs continue to climb.
Why the numbers have shifted so sharply
Three factors explain the jump. First, the unit price of electricity. Ofgem’s price cap has risen from 16p/kWh in October 2019 to 28p/kWh in April 2025. Every kilowatt-hour a solar panel generates and uses on-site replaces a unit bought at that higher rate. Second, panel efficiency has improved from around 18-19% in 2019 to 22-23% today, meaning more power from the same roof area. Third, the Smart Export Guarantee (SEG) now pays a typical 15p/kWh for surplus electricity, up from 5.5p under the old Feed-in Tariff. For a household exporting half its generation, that adds £100-150 a year.
The catch is that installation costs have not fallen in lockstep. A typical 4 kW system cost around £5,000-6,000 in 2019 and still costs £5,500-7,000 today, according to Energy Saving Trust data. But the payback period has shortened from roughly 8-9 years to 5-6 years, and that calculation excludes the 0% VAT on installations introduced in 2023.
What this means for your EPC rating
Solar panels add up to 15 points to an Energy Performance Certificate score, typically moving a D-rated home to a C or a C to a low B. That improvement matters: properties with EPC C or above command a 5-8% price premium on the resale market, according to Nationwide’s 2024 analysis. For a £300,000 home, that is £15,000-24,000 in additional value, far more than the installation cost.
Yet the EPC methodology still undervalues on-site generation. The current SAP 10.2 calculation assumes a fixed 40% self-consumption rate, whereas smart monitoring data from Octopus Energy shows typical households achieve 50-60%. The government’s planned EPC reforms, expected in 2026, should correct this, potentially adding another 2-3 points to a solar-equipped home’s rating.
Who should act now, and who should wait
Households with south- or east-west facing roofs, minimal shading, and annual electricity use above 3,500 kWh are the prime candidates. A typical 3-bed semi using 4,000 kWh a year can save £900-1,100 annually with a 4 kW system, according to Energy Saving Trust calculators. Those on time-of-use tariffs such as Octopus Flux can push savings higher by storing excess generation in a battery and discharging during peak evening hours.
But renters, flat-dwellers, and homes with north-facing or heavily shaded roofs will see lower returns. For them, community solar projects or purchasing shares in a local solar farm, such as those listed on the Energy Saving Trust’s community energy directory, may offer better value.
The government’s Boiler Upgrade Scheme does not cover solar, but the 0% VAT reduction is permanent. Households considering a heat pump should note that pairing it with solar panels can cut running costs by a further 30-40%, as the panels offset the heat pump’s electricity demand during daylight hours.
Households interested in solar should obtain at least three quotes from MCS-certified installers, check their roof’s orientation and shading using the Energy Saving Trust’s Solar Energy Calculator, and compare SEG tariffs on the Ofgem-accredited comparison site. The window for optimal returns is now: retail electricity prices are projected to rise another 5-10% by 2027, and export tariffs are likely to follow. Waiting a year costs the average household £1,000 in foregone savings.
Frequently Asked Questions
Most modern panels come with a 25-year performance warranty and a 10-12 year product warranty. Inverters typically need replacing after 10-15 years at a cost of £800-1,200. With proper maintenance, panels can generate at 80% of their original capacity after 25 years.
In most cases, solar panels are permitted development and do not require planning permission, provided they do not protrude more than 200mm from the roof plane, are not installed on a listed building, and are not in a conservation area. Always check with your local planning authority before installation.
