Solar panels for a UK home in 2026: costs, VAT and export rates

Electricity in Great Britain costs 26.32p per kWh under the October 2026 cap, VAT is zero on both the electricity you buy and the panels you install, and the relief on the panels ends on 31 March 2027. That combination is why enquiries to installers are running high this autumn. Here is what the numbers look like for an ordinary house, and where the catches are.

What a system costs in 2026

The reference figure most UK guides use comes from the government’s own solar PV cost data, republished by Sunsave in August 2026: a 4 kW system costs about £6,488 installed, and the same system with a 10 kWh battery about £10,488. A 4 kW array (typically nine or ten panels of around 450 W) produces roughly 3,600 kWh a year in an average UK location, from about 3,400 kWh in Glasgow to 4,700 kWh in Exeter. Larger systems cost less per kW; a 5 kW to 6 kW array on a bigger roof is common now that panels are cheaper than they were in 2022.

Quotes vary a lot with roof shape, scaffolding and whether the consumer unit needs work. Get three, and check every installer is MCS certified (or FlexiOrb, which suppliers also accept), because without that certificate you cannot claim export payments.

Why the VAT date matters

Since 1 April 2022 the VAT on residential solar has been 0% across Great Britain, extended to Northern Ireland and standalone batteries in May 2023 and to batteries retrofitted to an existing system from February 2024. The relief is legislated to end on 31 March 2027, after which the rate is due to return to 5%. On a £10,000 system that is £500. The rule that trips people up: the same company must supply and install for the zero rate to apply. Buying panels online and paying a separate electrician means 20% VAT on the hardware.

The government could extend the relief at the Budget. It has not said it will, so plan on the March date and treat any extension as a bonus.

How much you actually save

Two things happen to solar electricity: you use it or you export it. Used at home it replaces electricity at the capped 26.32p (or your fixed-tariff rate). Exported it earns whatever your export tariff pays. A house that is empty during the day might self-consume 30% to 40% of its output without a battery; with a battery, an EV charged from the panels, or a hot water diverter, that share rises sharply.

Take the 3,600 kWh a year from a 4 kW system. If 40% is used at home (1,440 kWh at 26.32p, about £379) and 60% exported at 12p (2,160 kWh, about £259), the annual benefit is roughly £640 before any battery. At the same £6,488 price that is a ten-year payback on today’s prices, faster if electricity rises in 2027 as forecasters expect and slower if it falls. These are worked examples with the assumptions stated, not a promise; our solar calculator lets you change every one of them, including your roof direction and how much you can use during the day.

The Smart Export Guarantee and better export tariffs

The Smart Export Guarantee (SEG) obliges licensed suppliers with 150,000 or more domestic customers to pay something above zero for exported electricity. The rates are set by the supplier, not the regulator, and the spread is wide. As of mid-2025, The Eco Experts’ comparison counted eleven suppliers over the threshold and two more taking part voluntarily, with rates from around 1p per kWh at the bottom to 27p per kWh for Octopus customers on Intelligent Octopus Flux with a compatible battery. That table dates from June 2025, so re-check before signing.

The practical split is between “open” tariffs and “own customer” tariffs. Octopus’s plain SEG tariff pays 4.1p per kWh to anyone with an MCS certificate and a smart meter, regardless of who supplies their import. Its Outgoing tariff pays 12p per kWh but only to households that also buy their electricity from Octopus. Prime Outgoing pays 16p between 4pm and 7pm and 9p the rest of the day; Agile Outgoing follows half-hourly wholesale prices with no cap. In the mid-2025 comparison, Scottish Power’s SmartGen was one of the few open tariffs paying a similar rate. Export payments are therefore a reason to compare import and export together, not separately, which is worth remembering when you compare tariffs.

Requirements for any of them: a smart meter able to record half-hourly export, an MCS or FlexiOrb certificate, an installation in Great Britain, and no Feed-in Tariff payments on the same system in the previous 12 months. The old Feed-in Tariff closed to new entrants in 2019; anyone still on it has a fixed contract and should not switch to SEG without checking.

Batteries: the second decision

A 10 kWh battery adds roughly £4,000 to a 4 kW quote in the government data. It raises self-consumption from perhaps 40% to 70% or more, and it opens the door to overnight cheap-rate charging on a time-of-use tariff, so the battery earns even in December when the panels do little. It also carries a lifespan of ten to fifteen years, sometimes shorter than the panels, so the second battery is part of the sum. For a home with an EV or a heat pump the case is usually strong; for a two-person household out all day and away at weekends it is marginal.

Grants and loans

There is no universal solar grant. What exists in 2026:

• The Warm Homes Plan (published 20 January 2026, £15 billion to 2030) funds free packages for low-income households, and the government press release describes solar with a battery, “typically £9,000 to £12,000” in value, as part of them. In England this runs through the Warm Homes: Local Grant, delivered by councils to owner-occupiers and private tenants with a low income in homes rated EPC D to G. The July 2026 statistics show solar PV was 38% of all measures installed, the most common one, although only about 5,100 households had been upgraded by the end of June.
• The same plan promises government-backed zero and low-interest loans for solar and batteries for all households. The government has said the loan details come later; as of September 2026 the product is not open, so ask before an installer tells you it is.
• ECO4 (the supplier obligation) still runs until 31 December 2026 and can include solar for eligible low-income homes; it has no successor.
• Scotland (Home Energy Scotland loans) and Wales (Nest) run their own schemes.

Permits and paperwork

Roof-mounted panels on a house are usually permitted development, so no planning application, with the usual exceptions for listed buildings and conservation areas (front elevation) and for flats, where the freeholder’s consent is needed. The installer notifies the distribution network operator: a system up to 3.68 kW per phase is notified after the fact (G98), anything larger needs prior approval (G99), which can take weeks and occasionally leads to an export limit. Ask the installer which route your system takes before you sign.

What has moved since 2025

The Warm Homes Plan replaced the patchwork of small schemes with council-led grants and a promised loan; ECO4’s end date moved from March to December 2026; the price cap rose 13% in July and 4% in October, which improves the case for self-consumption; and the 0% VAT deadline of March 2027 moved from a distant date to a scheduling problem, because good installers in many areas are quoting lead times of several weeks.

Where people get caught out

Free-solar and “government scheme” cold calls that turn out to be finance agreements. Quotes that assume 80% self-consumption for a home that is empty all day. Export tariffs read without the import tariff they are tied to. Installers who are not MCS certified. And forgetting that the export payment lands with your supplier, so a future switch of supplier means switching the export tariff too. None of these are reasons not to install; they are reasons to read the quote twice.