Solar Panel Efficiency Over Time (Plus Tips to Improve It)
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Dan Simms is an experienced writer with a passion for renewable energy. As a solar and EV advocate, much of his work has focused on the potential of solar power and deregulated energy, but he also writes on related topics, like real estate and economics. In his free time — when he’s not checking his own home’s solar production — he enjoys outdoor activities like hiking, mountain biking, skiing and rock climbing. Learn About This Person
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You’ll likely read about solar panel or solar cell efficiency in just about every article about panel performance, but many homeowners and solar customers still don’t understand why it’s such a crucial metric in the industry. Ultimately, your panel efficiency rating and degradation over time determine your energy output and, consequently, how much money you save on your utility bills.
In this article, we’ll be discussing why and how panels degrade over time, how long panels typically last, when you should replace them and how to boost performance and production until you do.
Do Solar Panels Lose Efficiency Over Time?
Yes, all solar panels lose efficiency over time, and the rate at which they do depends on a variety of factors, including the panel brand.
Solar panel degradation happens because of constant exposure to UV light, cyclic changes in panel temperature and more, all of which reduce the panel’s ability to absorb sunlight and convert it to usable electricity for your home. We’ll explain the reasons for degradation in greater detail in a later section.
For now, it’s useful to understand just how much efficiency you can expect your solar panel system to lose over time.
The actual rate of degradation depends on the brand of the panel you install, but the average is around 0.5% per year. The only exception is the first year after installation, which is the only time degradation is accelerated. The typical panel loses around 2.5% of its starting efficiency in the first 12 months.
Since most panels come with a 25-year performance warranty, it’s convenient to use that time frame to gauge degradation. With a 2.5% dip in the first year and a 0.5% dip per year over the following 24 years, that leaves you with a total loss of 14.5% and around 85.5% of the starting efficiency at the end of the 25 years.
Since the average panel efficiency starts at around 18.5%, the 14.5% loss would leave you with a total panel efficiency of 15.39% at the end of the 25-year efficiency warranty.
SunPower
How Has Solar Panel Efficiency Improved Over the Years?
The first solar cell was invented back in 1883 and had an efficiency of below 1%. It wasn’t until about 70 years later that a PV cell with practical application—due to an efficiency rating of around 6%—was invented.
Since the 1950s, there have been a handful of advancements that have helped push panel efficiency higher and higher toward the 22.8% residential panels—under standard test conditions— from SunPower are now capable of. We’ll explain the difference these advancements made briefly below.
- Late 1950s — Monocrystalline solar cells: Monocrystalline solar cells are made from a single sheet of silicon as the semiconductor rather than multiple silicon crystals, as is the case with polycrystalline solar cells. This advancement brought the possible efficiency up from 1% to around 6%, making solar a viable option for energy production.
- 1983 — Solar tracking technology: Panels generate more power when they receive more direct sunlight. In the early 80s, the first sun-tracking mounting system was invented. This didn’t increase cell performance, but it allowed for increased production throughout the day.
- Mid-1980s — Anti-reflective coatings: Anti-reflective coatings help prevent energy from the sun from bouncing off of the rear wall of the solar panel and getting lost to the environment. These coatings were developed in the 1980s, and there have been many iterations and improvements since.
- 1988 — Multi-junction solar cells: Multi-junction cells, also known as tandem cells or tandem perovskite cells, are manufactured using several light-absorbing materials to capture a wider range of solar energy. In the 80s, these peaked efficiency at around 40%. However, given how expensive it was to produce them, the tech was only used for specific applications, like energy production in space.
- 1989 — PERC technology: The first passivated emitter and rear contact (PERC) solar cell was invented. This technology improved efficiency by upwards of 10%, as it allowed for the reabsorption of solar energy that normally would have been lost.
- 2010 — Bifacial panels: Bifacial panels essentially trap solar energy between two surfaces until it can be absorbed by the solar cells inside. This technology was invented in the 70s but wasn’t popularized until around 2010 due to production limitations and cost.
- Early 2020s — Tandem solar cells for commercial production: The multi-junction or tandem solar cells developed in the late 80s started to become viable for use in residential solar systems. They boosted potential efficiency by an additional 25% and could allow for home solar systems to reach efficiencies of around 30%.
Over the years, improvements to the adhesives used for cell connection have also played a role in improving panel efficiency and durability.
How is solar panel efficiency measured?
Simply put, solar panel efficiency is the ratio of energy from sunlight that a panel can transform into electricity. If you want to be a little more technical, here’s the formula:
Even without plugging in any numbers, you can see that the more watts a photovoltaic (PV) cell can produce (using the same amount of sunlight), the more efficient a solar panel will be. This can be important when evaluating commercial solar panels, but we’ll cover that later. First, let’s start with a little history.
A short history of solar cell technology
Humans have been tapping the power of the sun for centuries. Magnifying glasses were used to concentrate the sun’s rays to ignite fires in the 7th century B.C., and architects throughout history have built structures with an eye toward the sky to capture as much radiant heat as possible. But it wasn’t until the 1800s when the PV revolution really kicked into high gear. Here are some highlights:
- 1839: Edmund Becquerel discovered the photovoltaic effect in France when he noticed the voltage between two metal electrodes in an electrically-conductive liquid increased when exposed to sunlight.
- 1873: Willoughby Smith discovered that the element Selenium has photoconductive properties.
- 1876:William Grylls Adams and Richard Evans Day created a selenium solar cell that produced electricity when exposed to light, proving that solid matter is capable of transforming light into electricity (less than 1% efficient).
- 1932: The photovoltaic effect of cadmium sulfide was discovered by Audobert and Stora.
- 1954: Bell Labs developed the first silicon photovoltaic cell capable of producing usable electricity, with an initial solar panel efficiency rate of 4%.
- 1958: Hoffman Electronics created PV cells with 9% efficiency.
- 1959: Hoffman Electronics followed up with 10% efficient cells.
- 1960: Solar panel efficiency hit 14% by Hoffman Electronics.
- 1985: A 20% efficiency level was reached for silicon solar cells.
- 1994: The National Renewable Energy Laboratory (NREL) created a solar cell that exceeded 30% conversion efficiency.
- 1999: Spectorlab, Inc. and NREL developed a solar cell that was 32.3% efficient. (Three layers of photovoltaic material were combined into a single solar cell to achieve this level.)
- 2012: Solar Frontier achieved 17.8% efficiency on thin-film PV.
- 2015:SunPower recorded 22.8% efficiency for high-rate production commercial photovoltaic modules.
- 2016: NREL and the Swiss Center for Electronics and Microtechnology (CSEM) recorded 29.8% efficiency on a lab cell.
- 2016: SunPower broke their previous world record for the highest-efficiency (24.1%) commercial solar panel using silicon cells.
- 2019: EnergySage ranks SunPower #1 among the top 5 companies who produce the most efficient solar panels.
The major take-away from this quick skip through time is that the history of solar panel efficiency shows impressive advances at first, but is now running up against the barriers of physics. Higher efficiencies require technologies that are harder to produce at scale at an agreeable cost. In other words, don’t expect any major jumps in efficiency for commercially-available solar panels any time soon.
In fact, depending on which physicist you talk to, there is also a very real theoretical limit to how much efficiency is possible for commercially-viable modules. Most authorities put that upper cap at about 30%. For some perspective, the average commercial solar panels manufactured today (with a few exceptions) hit a range of 17% to 20%.
Bottom line: While the future of solar technology is bright, advances will likely be modest for high-efficiency commercial solar panels.
But records are made to be broken, right?
Creating high-efficiency commercial solar panels that break records is a worthy goal. However, when you see claims of a new efficiency milestone being reached, be warned the results are often confined to the laboratory with no practical real-world applications on the horizon. The maximum efficiency number noted earlier is for something called “single junction cells.” These are your standard, mass-produced (and relatively-inexpensive) solar cells. When you see efficiency numbers climbing into the high 20s or beyond, be sure to read carefully. It usually means there’s some fancy tech going on that won’t likely hit the commercial market any time soon (if ever).
There are some other processes that can produce greater solar efficiency rates that do offer real commercial potential. For example, layers of different materials can be sandwiched into a single cell to capture different light spectrums, resulting in greater efficiency (more light is captured). Another approach uses lenses to concentrate sunlight onto small, highly-efficient cells (more sunlight goes into the cell, so more energy is produced). These applications can vastly improve solar panel efficiency, but likely at a considerably higher cost. The added expense may be worth it if you’re trying to power an orbiting satellite—where size, weight and amount of power generated are key. For commercial solar power systems, however, they simply aren’t practical.
Comparing efficiency ratings
Now that you have a better understanding of what you’re looking at when you see a solar panel efficiency rating, here are a few other things to think about:
- Not all solar cells are made the same. Seems obvious, but it’s worth noting. Take the industry-dominant silicon solar cell. Is it mono- or polycrystalline silicon? Monocrystalline silicon is purer and produces a more efficient solar panel; however, it is also more expensive to produce. For an interesting overview of the pros and cons of different types of solar panels, check out this article from Energy Informative.
- Not all solar equipment providers readily offer up the efficiency of the panels they sell. It could be the company doesn’t want to provide the information if it doesn’t help sales. Or, they could actually believe that efficiency is not important. Having this information is required by law, so don’t hesitate to ask.
What is the most efficient solar panel today?
Since the invention of the photovoltaic principle in the 19th century, the efficiency of solar panels has been increasing dramatically. In the 1950s, researchers at Bell Laboratories produced solar cells with 6% efficiency. In the 1970s and 1980s, researchers experimenting with different types of materials and production techniques gradually increased the level of efficiency. Today, the most efficient solar cells have around 40% efficiency and researchers around the world are working hard to push this level even higher. Unfortunately, most commercially available solar panels are significantly below this record level of efficiency, but there is no doubt that future solar energy systems will be built using higher efficiency solar cells.
Evolution of solar cell efficiencies as of December 2015 (source: NREL). Please click to enlarge.
What is multi-junction technology?
Solar cells are manufactured using different semiconductor materials. Each material can harvest a specific portion of the solar radiation spectrum. By overlaying cells made of different materials, we can increase the total amount of radiation that can be captured. As the sunlight passes through multiple layers of cells, each one optimized to absorb a certain wavelength of light, the overall efficiency can be increased drastically. Today, best performing traditional silicon solar cells have efficiencies around 25% (blue lines in the above chart), while multi-junction cells have surpassed the 40% level (purple lines). This sounds great, but increased efficiency comes at a price: multi-junction cells are much more complex and, as a result, more expensive than traditional solar cells.
A study performed by NREL revealed that the output of solar panels decreases by 0.5% to 0.8% every year. This is mainly due to the exposure of the panels to the elements, and in very arid climates, intense ultraviolet rays increase the level of degradation. Therefore, over the expected lifetime of a solar panel (20-25 years), it is natural that the efficiency will gradually decrease.
Should I buy the most efficient solar panels on the market?
Increased efficiency means higher output per unit area of solar panels. Thus, if you have two brands of solar panels with the exact same dimensions, the one with the higher efficiency will generate more electricity. Alternatively, the two brands may have the same power rating, but the higher efficiency panel would be smaller, an important consideration for certain solar energy applications.
Although it is tempting to invest in the most efficient solar panels, this may not necessarily be the best investment decision. Some of the more efficient solar panels are billed as premium products with a higher price tag. If you have limited roof space, or you are interested in a specialty application such as solar energy for your boat or your cabin, then a higher efficiency panel may indeed be the best choice. On the other hand, if you have ample roof space, then the reliability of the panels and the price should be the main drivers of your decision.
If you are considering your solar panel options, why not take them for a spin using WhatNextNow Solar GO? Our free tools will help you test drive different solar energy options at your location and give you a much better idea about how much electricity you can generate. And please remember that you are in this for the long-haul. A reliable panel purchased at a good price point can be your best solar investment, even if it’s not the most efficient model on the market.
How Are Solar Panels Tested for Efficiency?
Essentially, testing the efficiency of a solar panel means finding the ratio between the amount of electricity that the solar panel is able to produce and the amount of solar irradiance the panel is exposed to. Here is how that test is conducted:
Solar panels are tested at 25°C and exposed to 1,000 watts (or 1 kWh) per square meter of solar irradiance—what is known as standard test conditions (STC), then their electricity output is measured.
A panel’s power output rating (Pmax), measured in watts, is the maximum amount of power a solar panel is designed to produce under STC. A standard residential panel might have an output rating of 275-400 watts.
As an example: A 2-square meter panel under STC would be exposed to 2,000 watts. If it has a power output rating (Pmax) of 350 watts, it will have an efficiency rating of 17.50%.
To calculate a panel’s efficiency, then, divide the Pmax by the panel’s solar irradiance, then multiply by 100%. So, 350 / 2000 =.1750, and.1750 x 100 = 17.50%.
Tips for Maximizing Efficiency
The most efficient panels may not be the best use of your money. Consider the entire system cost for the panels (separate from “soft costs”). Given the panels’ efficiency, how many watts will they generate over the next 25 years (assuming standard test conditions)? How many watts do you need? Perhaps you are overbuilding, while a less efficient system will supply all your needs at lower cost.
Once you’ve installed a solar system, keep your panels clean. Regular rainfall will do the job, but if you live in a dry climate, use plain water (no soap, which can leave a film) twice a year to remove dust and dirt. Trim back branches if they’re over-hanging your roof, and remove any debris between the panels and your roof, since greater air circulation keeps your panels cooler. If needed, get a solar easement to remove shade from neighboring obstructions.
Software that comes with a solar system will monitor its output in kilowatt-hours (kWh). If you find output declining over time, all other conditions being equal, have your system tested. An ampmeter and multimeter are needed for these tests: Consult a professional, as you can damage your panels by doing the tests incorrectly.
Solar’s Future Is Bright
In June 2021, the maximum efficiency of a solar PV panel on the market was 22.6%, while a number of other manufacturers had cells over 20%. That’s why research is underway to create more efficient combinations of materials that can be commercially viable. Perovskites or organic PV cells may reach commercialization soon, while more inventive methods such as artificial photosynthesis show promise, even if they are still at an early stage of development. Research in the lab has produced PV cells with efficiencies nearing 50%, but bringing that research to market is key to the future of solar technology.
Solar panels designed for home use are typically 15% to 18% efficient. Anything between 18% and 25% would be considered premium.
Although reports over the years have claimed that solar panels have reached 100% efficiency in testing, no such solar panel is commercially available. Some of the most efficient solar panels currently on the market are just above 20% efficient.
The efficiency of solar panels seems low because not all the light that hits the panel can be processed as energy due to imperfect glass, lenses, and reflectors; the temperature of the solar panel; and the fact that much of it is not direct sunlight but diffused.
- How Does Solar Work? U.S. Department of Energy.
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- Solar Soft Costs. Solar Energy Industries Association.
- Bhandari, Khagendra P., et. al. “Energy Payback Time (EPBT) and Energy Return on Energy Invested (EROI) of Solar Photovoltaic Systems: A Systematic Review and Meta-Analysis.” Renewable and Sustainable Energy Reviews, vol. 47, 2015, pp. 133-141., doi:10.1016/j.rser.2015.02.057
- Solar Performance and Efficiency. U.S. Department of Energy.
- Solar Radiation and Climate Experiment. National Aeronautics and Space Administration.
- NSRDB Data Viewer. National Renewable Energy Laboratory.
- How Hot Do Solar Panels Get? Effect of Temperature on Solar Performance. EnergySage.
- Svarc, Jason. Most Efficient Solar Panels 2021. Clean Energy Reviews, 2021.
- Photovoltaic Energy Factsheet. University of Michigan Center for Sustainable Systems.