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Page last updated on 7th July 2025

How do solar panels work, and will solar panels reduce my electric bill?

This guide will be taking a closer look at solar energy, how do solar panels conserve energy and how do solar panels reduce energy bills for those wanting to gain control over their energy management.

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How do solar panels work?
Do solar panels reduce electricity bills?
Solar energy: pros and cons
How do I install a solar panel in my home?

With changing energy costs and growing interest in sustainability, you may have investigated different renewable sources of energy for your home. Among those various sources, solar panels have become a popular choice for homeowners. But how do solar panels work, and how much do solar panels save in the long run when it comes to energy use?

How do solar panels work?

In a nutshell, solar panels convert sunlight into electricity.

Solar energy is a renewable source of energy. When installed in homes, solar panels lower electric bills by providing an additional source of electricity, which can be used to power appliances without taking electricity from the grid.

Now let’s take a deeper look at the way solar panels generate electricity by converting sunlight into energy:

Sunlight hits the panel

Once sunlight hits the surface of the solar panel, it excites the electrons in the solar cells. This creates an electric charge.
DC to AC

The electric charge that is created forms a direct current (DC) of electricity, which passes through a solar inverter to create an alternating current (AC), which is the type of current used to power homes.
Giving power to your home

With the newly generated AC electricity, the solar panel can power all the different appliances in the home, even on cloudy days!

So, will solar panels save me money?

Most likely, yes - solar panels installed in customers’ homes could save them money over time. But you’re likely wondering, how does solar energy save money and how will solar panels reduce my electricity bill?

1. Reduced monthly costs

Once you have paid for the installation of your solar panels, the electricity they generate is completely free for you to use. Sunlight is free, and the electricity your solar panels produce can either be used at home or exported to the grid.

You could even save more by using battery storage, which is a device that stores electricity for use when the sun isn’t shining, such as at night. This could reduce your reliance on and help you save on energy bills.

2. Earn back for energy you don’t use

You might find yourself in a situation where your solar panels have generated excess electricity. Schemes like the Smart Export Guarantee enable homeowners to earn money by exporting any unused energy back to the electricity grid, as long as this energy has been generated by a renewable source. So, for every unit of energy exported, you can earn some money back in return.

Now that we’ve answered questions on ‘how do solar panels work?’ and explained whether solar panels lower electric bills, let’s explore some of pros and cons of solar panels.

Solar panels: pros and cons

We’ve compiled a list of pros and cons of having solar panels installed:

Pros:

Environmental benefits

Solar energy is a clean, renewable source of energy; by using solar energy, you are reducing your reliance on fossil fuels. According to the Energy Saving Trust, ‘a typical home solar panel system could save around one tonne of carbon per year, depending on where you live in the UK.’ Therefore, as well as helping you reduce electricity bills, solar energy can also help reduce your carbon footprint.

Energy independence

There is nothing more frustrating than feeling like your utility bills are out of your control. But there are steps you can take to feel more in control of your energy bills, such as getting a smart meter.

Generating your own electricity using solar panels can help you to have more control over the management of your bills and make more informed decisions about your energy use. By reducing your reliance on fossil fuels and electricity from the grid, you are taking your energy consumption and production in your own hands.

Increased property appeal

If you’re considering moving or selling, having solar panels in your home could appeal to fellow eco-conscious buyers. Also, because home solar panels can reduce reliance on the grid, your Energy Performance Certificate (EPC) can be improved, which can be a selling point.

Cons:

Installation costs

While having solar panels installed at home can lower electric bills, there are installation costs to consider. According to the Energy Saving Trust, who are an independent and trusted voice on energy efficiency, solar panels can cost around £7,000. Cost can depend on things like size, how easy it is to access your roof, or whether you prefer panels or tiles.

Roof suitability

Whether your roof is suitable for solar panels could affect how well the solar panels work and how much they cost to install. For example, a steep roof might slowly build-up dirt on the solar panels. If you have skylights or roof vents, this may make it harder to install solar panels and increase the installation costs.

While south-facing roofs typically perform best, you can still benefit from solar energy with north-facing roofs.

Maintenance

Another factor to consider is that some solar panels will need regular maintenance. This could include:

Checking your solar panels after rough or stormy weather.
Watching out for animals nesting near the panels.
Scheduling annual inspections.

Solar panels maintenance could contribute to the cost of the solar panels, even after they’ve been installed.

How do I install solar panels in my home?

Before investing in solar energy, make sure you find out whether your location is suitable. It is best to get in contact with MCS-certified installers who can help you determine where you can set up your solar panels, whether your property is suitable for one, and how much the costs are.

In most cases, solar panels do not require planning permission before installation. However, certain buildings, such as flats and listed buildings, may have certain rules and regulations you need to follow.

Contact your local planning authority for more information.

And, if you’re interested in managing your energy use, learn more about how getting a smart meter could help you.

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