Solar PV generates electricity; solar thermal heats water directly. For most UK homes, solar PV is the more useful choice because electricity can run anything in the house and can be exported for extra income, while solar thermal only ever contributes to hot water (typically 50–60% of annual demand) and can’t offset electricity or heating bills. Solar thermal still has a place – it’s cheaper to install and converts sunlight to usable heat more efficiently – but the case for it has narrowed as heat pumps and cheap PV have taken over most of the ground it used to cover.
What’s the Difference Between Solar Thermal and Solar PV?
Solar PV (photovoltaic) panels convert sunlight directly into electricity using semiconductor cells, feeding your home’s electrics through an inverter. Solar thermal panels – usually flat-plate or evacuated-tube collectors – instead circulate fluid through a system heated by the sun, transferring that heat into your hot water cylinder. Both sit on the roof and both rely on sunlight, but from that point on they do completely different jobs: one makes power, the other makes hot water.
Solar Thermal vs Solar PV Compared
| Factor | Solar thermal | Solar PV |
|---|---|---|
| What it produces | Hot water only | Electricity for any use in the home |
| Sunlight-to-output efficiency | Around 60–70% | Around 20–24% |
| Typical annual contribution | 50–60% of hot water demand | Depends on system size and usage, often 30–50% of electricity demand |
| Roof space needed | Smaller, 3–6m² typical | Larger, most systems 10–20m²+ |
| Typical installed cost | Usually lower | Usually higher, but falling per kWh generated |
| Battery storage possible | No – hot water cylinder is the only storage | Yes, with a solar battery |
| Export income (SEG) | Not applicable | Yes, for surplus electricity |
| 0% VAT relief | Yes | Yes |
Which Saves You More Money: Solar Thermal or Solar PV?
Solar PV usually wins on total savings simply because electricity touches more of your bill than hot water does. A well-sized PV system can offset lighting, appliances, and increasingly heating and hot water too if it’s paired with a heat pump and a battery, plus you can sell surplus electricity back through the Smart Export Guarantee. Solar thermal’s savings are capped by how much hot water your household actually uses; it’ll reliably cut your water-heating costs for maybe six or seven months of the year, but has nothing to offer your electricity bill at all. If your priority is the biggest realistic reduction in outgoings, solar PV is very likely the better use of the same roof space and budget.
Efficiency: Solar Thermal Converts Sunlight Better, But For What?
Solar thermal collectors are genuinely more efficient at turning sunlight into usable energy – often 60–70%, against roughly 20–24% for a good solar PV panel. That statistic gets used to argue solar thermal is “better,” but it’s comparing efficiency at two very different jobs. Heating water directly is a simpler physical process than converting light to electricity, so it’s not surprising thermal collectors do it more efficiently; the real question is whether hot water or electricity is the more useful thing to be generating for your household, and for most homes today, that’s electricity.
Installation and Roof Space Requirements
Solar thermal systems are physically smaller – a typical home needs only 3 to 6m² of collector to meaningfully contribute to hot water demand, versus 10 to 20m² or more for a solar PV system sized to make a real dent in electricity bills. That makes solar thermal a realistic option on roofs too small or too shaded for a worthwhile PV array, though it’s worth checking whether that same small area might be better used for a modest PV system instead, given PV’s wider usefulness.
Government Support: VAT and Grants for Each
Both solar thermal and solar PV qualify for the same 0% VAT relief on materials and installation when fitted by a certified installer in a residential property, so neither has a VAT advantage over the other. Where they diverge is on grants: schemes like ECO4 and the Warm Homes: Local Grant can fund either technology as part of a wider retrofit, but the Boiler Upgrade Scheme, which supports heat pumps, doesn’t extend to solar thermal. Our guide to government grants for solar battery storage covers the PV-and-battery side of this in more detail, and our tax incentives for solar installation guide covers the wider financial picture.
Can You Install Both Solar Thermal and Solar PV?
Yes, and it’s a sensible option if you have enough roof space, though it’s less common than it used to be. The two systems don’t compete for the same job, so a house with both gets a genuine reduction in both electricity and hot water costs. The trade-off is roof space and budget: most homeowners with limited space now choose to put all of it towards solar PV, since electricity has more uses and PV panels have become significantly cheaper over the last decade relative to their output.
So, Which Is Right for Your Home?
If you can only fit one, solar PV is the better default for most households because it addresses a bigger, more flexible slice of your bills and pairs with a battery and export income for extra value. Solar thermal remains worth considering if your roof space is genuinely too limited or shaded for a useful PV array, your hot water usage is high (a large family, for instance), or you already have a strong PV system and want to squeeze extra value from spare roof space.
Frequently Asked Questions About Solar Thermal vs Solar PV
Is solar thermal or solar PV cheaper to install?
Solar thermal is usually cheaper upfront because the system and roof area needed are smaller. Solar PV costs more to install but tends to deliver bigger total savings over time, since electricity from PV can offset a wider range of household costs than hot water alone.
Can solar thermal heat my whole house, not just hot water?
No. Domestic solar thermal systems are designed to heat water stored in a cylinder, not to run central heating or radiators directly. Heating your whole home from solar energy generally means solar PV feeding an electric heat pump, not a solar thermal collector.
Does solar thermal work on a cloudy UK day?
It still produces some heat, but output drops significantly with less direct sunlight, similar to solar PV. Most UK solar thermal systems are paired with an immersion heater or boiler backup precisely because they can’t be relied on for 100% of hot water needs year-round, especially through autumn and winter.
Do I need a hot water cylinder to use solar thermal?
Yes. Solar thermal needs somewhere to store the heated water until you use it, so it only works with a cylinder-based hot water system. If your home uses a combi boiler with no cylinder, you’d need to add one to install solar thermal, which adds cost and complexity that solar PV doesn’t require.
Can I sell excess energy from solar thermal, like I can with PV?
No. The Smart Export Guarantee only applies to exported electricity, so solar PV owners can be paid for surplus generation while solar thermal has no equivalent income stream. Any heat your solar thermal system produces beyond what your cylinder can store is simply lost.
