Photovoltaic vs Solar Panels – Key Differences for UK Properties

With energy prices climbing and the UK government pushing for greener homes and buildings, solar energy has never been more appealing. But there’s one question that often leaves people confused: what’s the difference between photovoltaic and solar panels?

Whether you’re a UK homeowner aiming to slash electricity bills, a landlord seeking to improve EPC ratings, or a commercial property owner chasing sustainability targets, understanding the right solar technology is crucial. Choosing the wrong one could mean missing out on government incentives or underperforming installations.

This guide demystifies the photovoltaic vs solar panels debate, explores which is best suited to your needs, and provides a clear path to making an informed investment in solar energy.

What’s the Difference Between Photovoltaic and Solar Panels?

While many people use the terms interchangeably, there’s a critical distinction. “Solar panels” is a broad term that can refer to both photovoltaic (PV) systems and solar thermal systems. Photovoltaic panels generate electricity, while solar thermal panels heat water. Understanding this difference is key to choosing the right system for your home or business.

Are They the Same Thing?

Technically, all photovoltaic (PV) systems are solar panels—but not all solar panels are PV. The term "solar panel" is often used broadly to describe different types of panels that harness solar energy. The key distinction lies in how the energy is used:

• Photovoltaic panels convert sunlight directly into electricity using semiconductors.
• Thermal solar panels (also called solar thermal collectors) use sunlight to heat water.

Understanding Photovoltaic Panels

Photovoltaic panels (also called PV panels) use photovoltaic cells, typically made from silicon, to generate electricity. When sunlight hits the cells, it excites electrons and generates a flow of electricity (direct current). An inverter then converts this into usable AC electricity for your property.

Understanding Solar Thermal Panels

Solar thermal panels work differently. These systems heat fluid in pipes within the panels, which is then used to heat your water supply. They don’t produce electricity and are primarily used for domestic hot water.

Which Is Better for UK Homes—Photovoltaic or Solar Thermal?

For most UK homeowners, photovoltaic (PV) systems are the better option due to their greater energy savings, income potential through the Smart Export Guarantee, and versatility. However, there are specific scenarios where solar thermal may be more suitable, particularly for homes with low electricity use but high hot water demand.

Benefits of Photovoltaic Panels for UK Homeowners

• Reduced electricity bills: PV panels power your home appliances, reducing grid reliance.
• Smart Export Guarantee (SEG): Sell excess electricity back to the grid via licensed suppliers.
• Battery storage options: Store unused power for evening use.
• Government support: Systems installed by MCS-certified installers are SEG-eligible.

Downsides of Solar PV

• Initial costs: A typical 3kW–4kW PV system can cost £5,000–£7,000.
• Roof space required: Ideal positioning is south-facing with minimal shading.

When Solar Thermal Might Make Sense

• Small households: Lower hot water needs can be cost-effectively met.
• Properties with limited electrical usage: Not ideal for full solar PV benefit.
• Existing boiler systems: Thermal panels can integrate with conventional heating.

What Should UK Landlords Know About Solar Panels?

Landlords in the UK are under increasing pressure to meet energy efficiency standards while keeping properties appealing and cost-effective for tenants. Solar panels—especially photovoltaic systems—can play a major role in meeting EPC targets, improving tenant satisfaction, and increasing long-term property value.

EPC Ratings and Legal Requirements

The UK government mandates that rental properties in England and Wales meet a minimum EPC rating of ‘E’. From 2028, this is expected to rise to ‘C’ for new tenancies.

Solar PV panels improve EPC ratings and reduce tenant energy costs, making properties more attractive and legally compliant.

Tenant Considerations

• Tenants benefit directly from lower electricity bills.
• Ensure metering arrangements support SEG participation.

Capital Cost vs Long-Term ROI

While landlords cover installation costs, the increased property value, better tenant retention, and future-proofing against stricter EPC laws offer strong ROI.

What About Commercial Solar Panel Installations?

Commercial properties stand to benefit greatly from solar PV, with large-scale systems capable of significantly reducing operational costs and carbon footprints. From office blocks to warehouses, solar is an increasingly strategic investment for businesses aiming for both savings and sustainability.

Why Businesses Are Switching to PV

• Cost savings: Businesses with high daytime usage (retail, manufacturing) can slash energy bills.
• Net zero goals: Helps meet corporate sustainability targets.
• Brand value: Visible commitment to ESG boosts reputation.

Scale and Customisation

• Systems can range from small 10kW setups to 250kW+ installations.
• Roof and ground-mounted options available.
• Battery storage and EV charging integration are becoming more common. Large installations may need approval from the National Grid Distribution Network Operator (DNO).

Funding and Tax Incentives

• Capital allowances: Claim tax relief on equipment.
• Green business grants: Check local authority and government schemes.
• SEG compatibility: Sell surplus energy to the grid.

How Do You Choose the Right System for Your Property?

Choosing between photovoltaic and solar thermal panels depends on your energy usage, roof suitability, and long-term goals. For electricity needs, PV is typically the smarter choice. For hot water, especially in smaller homes, solar thermal could be sufficient. A professional assessment can help you make the best decision.

Evaluate Your Energy Needs

• PV suits properties with high electricity consumption.
• Thermal suits are homes with consistent hot water demand.

Check Roof Orientation and Size

• South-facing roofs optimise energy generation.
• Shading and pitch angles can affect output.

Consult MCS-Certified Installers

Use an MCS-certified installer to ensure SEG eligibility, safety standards, and insurance protection.

What’s the Cost Difference Between Photovoltaic and Solar Panels?

Photovoltaic systems tend to be more expensive upfront but offer greater long-term financial returns. Solar thermal systems cost less to install but generate smaller annual savings.

It’s important to weigh both installation and lifetime value when deciding which solar technology fits your property and budget.

PV Panel Costs

• 3kW system: £5,000–£6,000
• 4kW system: £6,000–£7,000
• Battery storage adds £3,000–£6,000

Solar Thermal Panel Costs

• £3,000–£5,000 installed
• Lower savings potential

Stat:
According to Energy Saving Trust, a typical PV system can save up to £610/year, while solar thermal may save only £55–£95/year.

Can You Combine Photovoltaic and Solar Thermal Systems?

Yes. Hybrid solar systems combine electricity generation and hot water heating—ideal for larger properties or where both demands are high.

Pros

• Maximises energy independence
• Increases potential savings

Cons

• Higher upfront cost
• More complex installation

Final Verdict

Choosing between different types of solar panels can feel overwhelming, but understanding the core differences between photovoltaic and solar thermal panels makes the decision clearer.

For most UK homes, landlords, and commercial properties, photovoltaic panels offer greater long-term savings, better compatibility with modern energy systems, and the potential to earn money through the Smart Export Guarantee.

That said, solar thermal systems can be a practical choice for specific use cases, especially in homes with modest electricity needs but high hot water consumption. Landlords looking to boost EPC ratings and businesses working towards net-zero targets can particularly benefit from scalable PV installations.

By working with a trusted, MCS-certified installer, you ensure your system is eligible for incentives and installed to the highest standards.

FAQs

Are photovoltaic panels more efficient than solar thermal panels?

Yes, in terms of overall energy flexibility. Photovoltaic panels generate electricity, which can power appliances, lighting, and even heat pumps. Solar thermal panels are more efficient at converting sunlight into heat, but are limited to hot water usage.

Can I install both photovoltaic and solar thermal panels on the same roof?

Yes. You can combine both systems on the same property if roof space and layout allow. This hybrid approach maximises energy generation for both electricity and hot water.

Do photovoltaic panels work in cloudy UK weather?

Absolutely. PV panels still generate electricity on cloudy days, just at reduced efficiency. Modern systems are designed to perform well under typical UK conditions.

What is the lifespan of photovoltaic vs solar thermal systems?

Photovoltaic systems typically last 25–30 years with minimal degradation. Solar thermal systems usually last around 20 years but may require more maintenance, especially with moving parts like pumps.

Which type of solar panel qualifies for the Smart Export Guarantee (SEG)?

Only photovoltaic systems that generate electricity and are installed by MCS-certified installers qualify for the SEG. Solar thermal panels are not eligible since they don’t produce electricity.