Investing in Solar Energy in 2025? Here are the pros, cons, and future prospects

The sun emits powerful solar energy that can be harnessed to generate electricity, power devices and heat water in homes. Solar energy is sustainable and an abundant energy source, making it a clean, renewable alternative to fossil fuels.

Recently, the UK has experienced a surge in solar energy usage, so you might be thinking about investing. In this post, we’re going to talk through the current trends surrounding solar energy and explore the benefits and potential challenges of adopting this energy source.

Current trends in the UK around solar energy adoption

It’s no secret that solar energy adoption in the UK is on a steep incline. According to Solar Power Portal, the UK has a total of 17.2GW of solar generation capacity as of October 2024 (a 6.3% increase since October 2023).

Conversely, as of August 2024, reliance on harmful fossil fuels has dropped to less than 20% of the UK’s energy.

Most of the additional solar installations have been domestic, showing a steep trend in mainstream adoption of solar energy sources and an increased awareness of environmental issues. In fact, as of March 2025, 1.5 million homes in the UK have installed solar panels, and this figure is only expected to rise.

This increased residential adoption of solar energy is likely being influenced by rising government support for renewable energy in our society. For example, an £80 million fund will be used to support around 200 schools nationwide to install rooftop solar panels, and an additional £100 million for almost 200 NHS sites. The first solar panels are expected to be installed by summer 2025.

This initiative could be game-changing for schools and hospitals, especially since the eye-watering energy bill hikes the nation has been faced with recently (and the NHS being the biggest energy user of all public sectors). It’s estimated that the average NHS site could save up to £45,000 per year on energy bills by using solar panels.

Environmental and Economic benefits of investing in solar energy

If you’re considering going solar, we’ve collated some of the most compelling environmental and economic benefits that this energy source provides.

Reduced Carbon Emissions

Unlike fossil fuels, which release harmful carbon emissions when mined, transported and burned, solar energy is considered one of the cleanest sources of energy. By replacing toxic fossil fuels with solar, the average UK home could reduce their carbon footprint by 1.5-2 tonnes annually.

Resource Preservation

Solar energy reduces the reliance on finite resources such as oil, gas or coal, and doesn’t require the use of water to generate electricity (unlike other energy sources).

Biodiversity Preservation

Carbon emissions are extremely harmful to our environment. Not only do plants and animals suffer from air and water pollution caused by harmful fossil fuels, but their natural habitats are frequently destroyed to make space for power plants or drilling infrastructure. Solar removes the risk of any form of pollution, and can be installed compactly on rooftops.

Lower Energy Bills

From an economic perspective, solar has the ability to reduce your energy bill up to £340 annually. Plus, thanks to the Smart Export Guarantee (SEG), you can sell any unused energy back to the grid.

Increased Resale Value

If you’re considering selling your home in the future, installing solar panels can often increase your property’s value for more environmentally-conscious buyers.

Energy Independence

A huge benefit of going solar is no longer having to rely on volatile global markets, and be subject to astonishing energy price hikes.

Job Creation

Installing solar panels benefits society at large by creating new jobs within the industry. In fact, according to Solar Energy UK, the solar industry is expected to support 60,000 jobs by 2035.

The potential challenges and risks of a solar energy investment

Whilst installing solar panels has plenty of benefits, there are some potential challenges to consider before making the investment.

Financial Risks

Despite solar panels offering lower energy bills annually and increasing the value of your home, they tend to have a high up-front cost (£7,000 on average). Based on this cost, but depending on energy usage and property size, it can take a long time for homeowners or businesses to break even.

Though extremely helpful, government initiatives and policies (like the SEG) are subject to change based on legislation and economic downturns, so homeowners may see a fluctuation in their return.

To reap the greatest return on investment, your motive for going solar needs to be both financial and environmental.

Operational Risks

Owing to the name, solar panels rely on the sun to produce energy. Though they still work on a cloudy day, it’s worth mentioning that the weather will affect the yield of energy produced.

To fully benefit from solar panels, you should consider investing in additional battery systems to store excess power (which are also a relatively expensive upfront cost).

Plus, like any other energy resource, solar panels are expected to degrade over time and are subject to maintenance and repairs. Homeowners should also check if the installation of rooftop solar panels requires planning permission.

Is it a good Idea to Invest in solar energy in 2025?

Despite the steep upfront costs and potential operational risks, the facts show that investing in solar energy in 2025 creates both financial and environmental opportunities for homeowners and our society at large.

The environmental benefits for our planet are undeniable. Investors of solar energy play a direct role in supporting the government’s goal of reaching net zero, preserving wildlife and biodiversity and protecting the wellbeing of the planet for future generations.

The government’s strong commitment to renewable energy has resulted in multiple initiatives and schemes, such as the SEG, where homeowners can sell their unused energy back to the grid, and Contracts for Difference (CfD). The CfD is essentially an insurance policy; it guarantees renewable energy providers a fixed price regardless of the market.

Finally, investing in solar means that homeowners can be independent from volatile market prices, achieving greater security and predictability with their energy bills.