Levelised Cost of Electricity — the total lifetime cost divided by total lifetime generation. It accounts for all costs (purchase, replacement, maintenance) and spreads them over every kWh generated. It's the standard way to compare electricity sources (used by IRENA, IEA, and BEIS).

Does this account for the inverter replacement?

Yes — we include a £1,200 inverter replacement at year 12-15 and £1,000 for occasional maintenance/cleaning over 25 years. Total lifetime cost: £9,400 for a system originally costing £7,200.

What about the opportunity cost of the money?

At 5% discount rate, the NPV-adjusted LCOE rises to approximately 12-14p/kWh. Still 40-55% cheaper than grid electricity. Even with aggressive discounting, solar wins.

Solar vs Grid: Cost Per kWh

By Home Solar Guide Team|Updated 20 October 2026|money

Independently written | Plain-English guide

Solar vs grid cost per kWh — Solar: 6-9p/kWh over 25 years. Grid: 26.32p/kWh. Solar is 60-75% cheaper.

What would this actually cost at your home?

Installed prices vary widely by roof, access and region. Get an installed price for your property from MCS-certified installers.

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What would this actually cost at your home?

Installed prices vary widely by roof, access and region. Get an installed price for your property from MCS-certified installers.

Get an Installed Price

How much does solar electricity cost per kWh?

Levelised Cost of Electricity (LCOE) comparison — solar vs grid in the UK: SOLAR LCOE CALCULATION: Total 25-year cost: System £7,200 + Inverter replacement £1,200 + Maintenance £1,000 = £9,400. Total 25-year generation: 3,800 kWh/yr × 25 years × (1 - 6.25% cumulative degradation) = 89,100 kWh. SOLAR LCOE: £9,400 ÷ 89,100 kWh = 10.6p/kWh INCLUDING all costs. Self-consumed portion only: £7,200 ÷ 89,100 = 8.1p/kWh (excluding inverter/maintenance from self-consumed portion is conservative). GRID COST: Current Ofgem cap: 26.32p/kWh (ofgem.gov.uk). At 3% annual inflation: 25-year average = 34.5p/kWh. At 0% inflation: 25-year average = 26.32p/kWh. COMPARISON: Solar (8-11p/kWh) vs Grid (24.5-34.5p/kWh) = solar is 55-75% CHEAPER per kWh. Even including ALL costs, solar electricity is the cheapest source of electricity available to UK homeowners. Sources: Ofgem price cap (ofgem.gov.uk), IRENA LCOE methodology (irena.org/costs), PVGIS annual yield (re.jrc.ec.europa.eu), manufacturer warranty data.