The Three Types of Solar Panel
The solar industry uses the word “solar” to cover at least three distinct technologies. They share nothing in common except that they all use sunlight as an input. Understanding the difference before you get quotes will save you from comparing apples with oranges.
1. Photovoltaic (PV) Panels
PV panels convert sunlight directly into electricity using semiconductor cells (typically silicon). The electricity generated can power your home, be stored in a battery, or be exported to the National Grid. This is the most common type installed in the UK and what most people mean when they say “solar panels.”
A typical 4kWp domestic system in Greater London generates approximately 3,400–3,800 kWh per year — enough to cover 70–100% of an average household's electricity demand depending on usage patterns.
2. Solar Thermal Panels
Solar thermal panels collect heat from sunlight and use it to warm a heat-transfer fluid, which in turn heats your domestic hot water via a twin-coil cylinder. They do not generate electricity. They are highly efficient at what they do — converting 60–80% of captured solar energy into usable heat, compared to 15–22% for PV.
A well-sized solar thermal system can provide 50–70% of a household's annual hot water demand. They are particularly effective in spring and summer and work alongside a combi boiler or heat pump for the remainder.
3. Hybrid (PVT) Panels
Hybrid panels — also called PVT (photovoltaic-thermal) — combine both technologies in a single unit. They generate electricity and simultaneously capture the heat that PV panels normally lose, using it to pre-heat water or assist a heat pump. They maximise energy output per square metre of roof space.
Hybrid panels cost significantly more than either standalone type and are most relevant where roof space is limited or where you need both hot water and electricity generation from the same area.
PV vs Thermal vs Hybrid — Side by Side
| PV | Thermal | Hybrid (PVT) | |
|---|---|---|---|
| What it generates | Electricity | Hot water / heat | Both electricity & heat |
| Typical cost (installed) | £5,000 – £9,000 | £3,000 – £6,000 | £8,000 – £14,000 |
| Efficiency (energy captured) | 15–22% | 60–80% | 60–80% (combined) |
| Grid export possible? | Yes — via Smart Export Guarantee | No | Yes (electric portion) |
| Best for | Reducing electricity bills | Reducing hot water costs | Maximising roof space output |
| Typical payback period | 7–10 years | 5–8 years | 8–12 years |
| MCS certification required? | Yes | Yes | Yes |
Why Most UK Homeowners Choose PV
Photovoltaic panels dominate the UK residential market for good reason. The combination of falling hardware costs, the Smart Export Guarantee, and the ongoing rise in electricity prices has made PV the default choice for homeowners looking to reduce bills and improve their property's EPC rating.
- Reduces electricity bills immediately and significantly
- Excess generation exported to the grid via the Smart Export Guarantee (SEG)
- Can charge an EV or battery storage system
- Low maintenance — no moving parts
- Eligible for 0% VAT on residential installations
- Works in diffuse daylight (not only direct sun)
When Solar Thermal Makes Sense
Solar thermal is often the right choice for households with high hot water demand — families with multiple bathrooms, properties with swimming pools, or homes that already have good electricity supply but high energy bills driven by water heating.
- Highly efficient at converting sunlight to usable heat
- Reduces hot water costs by 50–70% annually
- Smaller roof footprint than equivalent PV systems
- Lower upfront cost than PV for hot water alone
- Works well alongside a heat pump or combi boiler
- Particularly effective in spring and summer months
Why MCS Certification Is Non-Negotiable
MCS (Microgeneration Certification Scheme) is the UK's quality standard for small-scale renewable energy installations. Both installers and products must be MCS-certified. This is not a nice-to-have — it is a hard requirement for several reasons.
Smart Export Guarantee eligibility
You cannot register for the SEG (and receive payment for electricity you export) without an MCS-certified installation. Non-MCS systems generate electricity but cannot earn export income.
Warranty validity
Most panel and inverter manufacturers require MCS-certified installation to honour their product warranties (typically 10–25 years on panels, 5–10 years on inverters). A non-certified installer may void the product warranty entirely.
Insurance and mortgage considerations
Some home insurers and mortgage lenders require evidence of MCS certification before providing cover or lending against a property with solar panels fitted.
DNO notification
Your installer must notify your Distribution Network Operator (DNO) before the system goes live. MCS-certified installers handle this as a standard part of the process. Non-certified installers often skip it, leaving you with a system that is technically not authorised to export to the grid.
How to verify
Search the MCS installer register at mcscertified.com. Your installer should also provide an MCS certificate at the end of the installation. If they cannot, the installation is not compliant.
Warning Signs From Solar Installers
The solar industry has attracted its share of high-pressure and misleading sales tactics. If you encounter any of the following, walk away.
Understanding the Return on Investment
Solar ROI depends on three factors: how much electricity (or heat) your system generates, how much of that generation you consume directly rather than export, and the current unit rate for electricity in your area.
A typical 4kWp south-facing PV system in Greater London might generate 3,600 kWh per year. At a blended electricity cost of 28p/kWh, that represents £1,008 of potential annual value — split between direct consumption savings and SEG export income. The actual split depends on whether anyone is home during peak generation hours and whether battery storage is fitted.
The industry frequently overstates savings by assuming high self-consumption rates (70%+) that many households — particularly those where occupants are out during the day — will not achieve without battery storage. When getting quotes, ask your installer to model both a low self-consumption scenario (25%) and a high one (65%) so you understand the realistic range.