Do Solar Panels Reduce Energy Bills in UK Homes?

Rising electricity prices in the UK have increased interest in residential solar photovoltaic (PV) systems as a means of reducing household energy bills. While solar panels are often promoted for their environmental benefits, the extent to which they reduce energy costs depends largely on how the electricity they generate is used. This article summarises peer-reviewed UK research examining how solar panels affect household electricity demand, grid reliance, and the mechanisms through which energy bill reductions occur.

Evidence from UK household solar PV systems

McKenna, Pless and Darby (2018) analysed measured electricity generation and consumption data from UK households equipped with rooftop solar PV systems. Using high-resolution data from a smart grid demonstration project, the study examined how solar electricity is divided between on-site household use and export to the electricity grid.

The researchers found that, on average, approximately 45% of electricity generated by residential solar PV systems was consumed directly within the home. The remaining 55% of generated electricity was therefore available to be exported back to the grid, reflecting the timing mismatch between peak solar generation and typical household electricity demand.

This distinction is important, as electricity used on site directly offsets electricity that would otherwise be purchased from an energy supplier, whereas exported electricity is subject to export tariffs and wider network conditions.

Reduction in grid electricity use

Based on observed consumption patterns, households with solar PV systems imported around 24% less electricity from the grid compared with similar households without solar installations. This reduction represents the net effect of on-site solar self-consumption under baseline conditions, without the use of dedicated electricity storage technologies.

The findings demonstrate that even when a substantial proportion of generated electricity is exported, residential solar PV systems can still materially reduce household dependence on grid-supplied electricity.

Interpretation and scope for increased self-consumption

While the study observed average self-consumption levels of 45%, it also showed that more than half of generated solar electricity was not used immediately within the home. As such, the reported reduction in grid electricity use should be understood as a baseline outcome, rather than a technical or behavioural upper limit.

In practice, households may increase the proportion of solar electricity used on site by adjusting when electricity is consumed or by adopting complementary technologies. For example, aligning household electricity demand with periods of solar generation, or integrating battery storage to retain electricity that would otherwise be exported, may increase self-consumption and further reduce reliance on grid electricity. These potential improvements are consistent with wider energy systems research, although they were not directly assessed within this study.

Why this matters for UK households

This research helps explain why solar panels can reduce energy bills even when households do not use all of the electricity they generate.

By consuming around 45% of solar electricity directly, households immediately reduce the amount of electricity they need to buy from the grid. Even where the remaining electricity is exported, households still benefit from lower grid dependence and reduced exposure to electricity price volatility.

Crucially, the findings show that solar panels establish a foundational reduction in grid electricity use, rather than a fixed or capped level of savings. As electricity prices rise and households adopt smarter ways of using energy, the proportion of solar electricity used within the home can increase, strengthening the financial case for residential solar over time.

Reference

McKenna, E., Pless, J. & Darby, S. (2018). Solar photovoltaic self-consumption in the UK residential sector: New estimates from a smart grid demonstration project.