Solar panels vs rising electricity prices: which offers better long-term value?

TL;DR:

• Households relying on grid electricity remain fully exposed to rising and volatile energy prices.
• Solar panels reduce the amount of electricity you need to buy, creating more predictable long-term costs.
• Over time, solar could act as a financial hedge against energy inflation while offering potential income through export tariffs.
• Flexible financing options mean upfront costs can often be spread, improving affordability.

Energy prices in the UK have been unpredictable in recent years, leaving many households facing fluctuating and often high electricity bills.

According to the House of Commons Library, although prices have fallen since summer 2023, they remain well above pre-energy-crisis levels.

This uncertainty has prompted a growing number of homeowners to wonder whether installing solar panels is a cost-effective way to lower energy costs while generating their own electricity.

Why are the UK’s electricity prices so high?

Britain’s electricity prices are high largely due to global gas dependence and market volatility.

According to Cornwall Insight, the UK’s electricity costs are closely tied to wholesale gas prices, meaning geopolitical tensions, supply shortages and global demand can push bills higher.

Events such as Russia’s invasion of Ukraine and the crisis in the Middle East have kept prices elevated, as a result of which electricity prices remain among the highest in Europe.

Under the latest Ofgem energy price cap, bills went down by around 7% on 1 April 2026, but the Iran war has led to severe disruption in energy supply. Cornwall Insight now predicts that costs will rise in the summer.

Homeowners wanting less reliance on the grid may want to think about installing solar panels to offset long-term uncertainty.

Are solar panels a hedge against inflation?

Yes – solar panels can stabilise your electricity costs and offer households greater energy independence.

The Bank of England’s Monetary Policy Committee expects inflation to reach 3.5% in the third quarter of 2026. As it’s expected to remain above the 2% inflation target, solar panels could act as a practical hedge.

When you generate electricity at home, you are less dependent on suppliers or affected by rising tariffs. While savings vary by households, solar power offers greater control and predictability over long-term energy spending.

Grid electricity vs solar panels

According to calculations by SolarTherm UK, the average UK household uses around 2,700-3,200 kWh of electricity per year. Assuming the electricity price is 30p per kWh with a 5% annual increase, here’s how much your electricity costs would come out to be.

Source: SolarTherm UK

By this estimation, that adds up to roughly £11,000 to £12,500 in electricity costs over the period.

Solar panels are ideal for households that want to reduce their reliance on the grid, while building predictable savings over the long term.

According to E.ON Next, a typical solar system (8-12 solar panels) can cost between £5,000 and £7,000.

This means that customers can save between £700 and £1,000 annually with an 8-12 panel PV-only system, or £7,000 – 10,000 over ten years.

It means that you could pay £6,000 for solar and £4,000 for electricity over ten years, or £11,000 for electricity without solar panels.

Which is cheaper in the long-term?

Solar panels are generally cheaper over the long term. The key difference between grid electricity and solar is how much it could cost you over time.

• Grid electricity is a recurring expense that can rise at any time
• Solar is more of a one-time investment with long-term savings

Solar is less about short-term gains and more about risk management and cost certainty. By generating your own electricity, you gain more control over your energy costs, reduce reliance on external suppliers and potentially earn from surplus power generation.

With uncertain geopolitics and volatile energy prices, it’s hard to predict where your household bills will go, and that’s one less thing to worry about with solar panels.

How much can you save with solar panels?

Solar panels could slash thousands of pounds in just the first decade, and even generate additional income.

Most panels are warrantied for 25-30 years, and inverters and batteries last about 15 years, which means savings continue long after the initial installation cost is recovered.

On top of that, under the government-backed Smart Export Guarantee (SEG) scheme, households can earn money by exporting unused electricity back to the grid. For example, E.ON Next’s SEG tariff can pay you up to 17.5p per kWh exported to the grid.

What is the best way to pay for solar panels?

While solar needs an initial investment, there are flexible payment options that can make it more accessible.

Many providers now offer ways to spread the upfront cost of installation, including:

• 0% APR finance options
• Multiple instalment plans
• Bundled energy and solar packages

Reasons to buy solar panels from E.ON Next

E.ON Next combines competitive pricing, flexible instalment options and export packages.

It is widely available across the UK, meaning no matter where you are based, you may be able to get solar panels installed from a trusted provider.

The cost of buying solar panels from E.ON Next starts from around £4,995 for six panels and £6,495 for 12 panels. You can pick from various SEG tariffs, and there are 0% APR finance options available for up to three years.

Split your instalments into three chunks by paying a 25% deposit up front, 50% when the materials are ordered, and the remaining 25% upon completion. You can also pay in full: it’s quick and without the need for a credit check.

Households can see savings of up to £1,146 a year when you install a 12-panel system with a 5 kWh battery, including earnings from any surplus power you export. You can also get an E.ON Next solar and battery system with no upfront payment, get a 25-year manufacturer warranty, and up to 30 years of performance warranty on your home.

If you have an electric vehicle, E.ON Next’s Next Drive EV tariff can offer more savings, by allowing you to charge your solar battery overnight at cheap rates in the winter, to power your home during the day. Existing E.ON Next customers can also get an extra £200 discount on solar and battery sales.