Solar Panel Efficiency Is Nothing to Take Lightly

So you’re entertaining the idea of installing a solar system on your property and want to know how solar panel efficiency will effect your solar panel installation? Great!

But there are a few things you should know about solar panel efficiency before you get the ball rolling on your solar panel installation.  There are some things you need to understand about your newest home improvement project especially before you have a professional solar installer over for a site visit.
In the solar industry, terms like “2, 3 or 5 kWh systems” are thrown around — just like there are different types of motor oil you might use for your car — there are a lot of choices out there; but it seems like you don’t fit into a clearly defined category.

The terms make sense when you hear them –a 2kWh system should produce 2kWh of energy, a 3kWh system 3kWh of energy, and so on…right?

Unfortunately, that’s not the case. Although they say you are installing a “3kWh System,” its real max energy generation might only be 2.58kWh, not that snazzy round number 3 you keep hearing.  Why is that?  The difference is due to different performance factors like your solar panel efficiency.  Others will add to your solar panel efficiency.

What is a performance factor you say? Well glad you asked. Below is a description of the 10 most inhibiting factors to your future solar panel installation’s performance and your solar panel efficiency.  But please realize, this is not to scare you into not buying a system when you see what solar panel efficiency really is—that would be down right foolish!

A solar panel installation is an excellent investment for the majority of homeowners. You just need to realize that the 3kWh system you have on your roof won’t actually be pumping a pure, perfect 3kWh every second the Sun is in the sky.


Solar Installation and Solar Panel Efficiency Factors

So let me review the various factors that can reduce your solar panel installation’s and solar panel efficiency:

Component Factors

Module Temperature

Loss Factor: 7-14%    Performance Factor: 86-93%

When your solar panels get hot they don’t work as well as when they are cooler, just like any other electronics. That’s why computers have fans and other cooling systems; your modules are no different and your solar panel efficiency will suffer as a result of heat. So depending on how hot the climate is you live in this can invariably affect you solar panel efficiency to produce electricity.

But your climate isn’t the only factor impacting your solar panel efficiency. The mounting of your modules, more specifically the clearance between your modules and the roof, will also contribute to this heat effect in a huge way. The more clearance between your roof and your solar panels will allow more air to flow more freely, keeping the module cooler longer boosting solar panel efficiency. The flip side to this obviously is that they don’t look as aesthetically pleasing. So just something to think about when you demand that your modules lay flat on your roof.

An excellent resource to determine the exact PTC rating of your desired modules is to visit:

Inverter Efficiency

Loss Factor: 4-11%    Performance Factor: 89-96%

Nothing electronic is 100% efficient, especially when it is converting one thing to another. Well, your inverter is no different. There are inherent losses when converting the direct current (DC) produced by your solar panels into the alternating current (AC) your home appliances require. Now over the years solar power inverters have undoubtedly gotten far more efficient but they still aren’t a perfect 100%. So just realize there will be some electricity losses do to the energy conversion that your inverter carries out adding to your solar panel efficiency losses.
An excellent resource for getting performance ratings of your desired inverters is located at:

Unavoidable Solar Panel Efficiency Factors

Dust & Dirt

Loss Factor: ~7% (5-20%)    Performance Factor: 85-95%
When your car window gets dirty it gets hard to see out of, right? And your car is always getting dirty, right? (Well maybe not as much up in rainy Seattle). Your solar panels are no different. There is all sorts of stuff flying through the air. Depending on the season it could be dust, dirt, pollen, bird poop, snow, etc. Well if your solar cells can’t see the Sun because your solar module’s glass is covered with some sort of debris or film, then they aren’t going to work at full capacity thus limiting your solar panel efficiency. That’s why during those seasons when there is lots of debris in the air it’s important that you clean off your panels every so often. If not your solar panel efficiency will suffer as a result.

Just realize this effect on your solar panel efficiency will vary by climate and by location. Some things to think about are your proximity to agricultural lands, and to industrial or manufacturing plants that produce particulate pollution.

Manufacturer Fudge

Loss Factor: 5% (0-5%)    Performance Factor: 95-100%
Not all solar panels are created equally. Despite the rigorous quality controls put in place by super-high-tech photovoltaic manufacturers there are still small performance variations as modules come off the production line (these are normal manufacturing variations, not defects). As a result, manufacturers state a performance fudge factor for your solar panel efficiency. So your 100Watt module you purchase may actually produce anywhere from 95Watts-105Watts (in other words, 95-percent to 105-percent of its stated capacity) simply because of the accuracy of the production process.

Manufacturers are getting better and these days.  Solar panels usually produce at minimum their rated power or higher.  You might get a solar panel efficiency better than your neighbor with the same solar panels. So from these types of manufacturers your performance rating might be anywhere from 100Watts – 105Watts. Be sure to check the manufacturer’s specification before you invest in your modules so you know what solar panel efficiency to expect.

Module Mismatch

Loss Factor: ~2% (1.5-2.5%)    Performance Factor: 97.5-98.5%
As discussed above, all modules aren’t perfect replications of one another. When you string modules together in series these small solar panel efficiency mismatches between modules will result in minor system performance losses when current flows through them. However minor, it’s still good to be aware that these solar panel efficiency losses exist when installing your system.

AC & DC Wiring

Loss Factor: ~3% (1-5%)    Performance Factor: 95-99%
We are all aware of the loss of electricity that occurs when it flows through a wire to get from one location to another. Your solar panel installation is no different. Also, though the distance between your solar panels and your outlet are far smaller in comparison to the long distances that power travels through power lines from the power plant to your home; you will still incur some system losses due to the natural resistance of the metal wire the electricity needs to flow through. These are loses that will add to the losses from your solar panel efficiency.  They are not major losses, but are a good reason to ensure your solar installer has a qualified electrician on his team checking his wiring design.

Solar Panel Module Degradation

Loss Factor: 5-15% over 20 years    Performance Factor: 85-93%
Let’s face it. As things are used, over time they deteriorate. Your solar panel modules are no different. However, solar panel modules these days hold amazing warranties, most lasting 25 (or at least 20) years, guaranteeing that the modules will maintain upwards of 95% of their original capacity and solar panel efficiency. That is phenomenal! What other investment vehicle do you know that has a 25 year warranty to perform at 95% of it’s rated capacity— definitely not your mutual funds. Just realize that over time your modules’ max capacity will slowly degrade at approximately 0.75% a year.  Your solar panel efficiency’s decrease over time is the least of your worries though.

Avoidable Factors

Monitoring or System Up-time

Loss Factor: 2%    Performance Factor: 90-98%

Monitoring your system is very important. Do you need to sit at work watching your solar panel efficiency and overall system performance through an online monitoring tool similar to the obsessive manner with which your kids watch for Facebook updates? No, but it is good to check up on your system every once in a while in the event that a wire shakes loose or a breaker opens.

Without monitoring the system, you won’t realize there’s a problem. If the system isn’t operating correctly, it could be worthless to you, with respect to energy and electric savings. Why even buy a system if you aren’t going to monitor it yourself or have someone else monitor it? Monitoring your system will ensure it has an up-time of a 100%.

Solar Panel Orientation & Tilting

Loss Factor: 0-40%    Performance Factor: 60-100%
Depending on the location you choose for your system and/or your home’s roof orientation and tilt, you might be looking at as much as a 40% decrease in solar panel efficiency.

The best roofs are those that are flat or face south. You should also be aware that the best tilt angle for your array would be the degree of latitude of your home’s location. The majority of time your roof won’t be sloped at this angle so you need to either angle your modules off your roof (aesthetically not as desirable) or deal with the solar panel efficiency loss associated with a less than optimal tilt angle for your system. To give you an idea, a module facing North at an angle of 20° will result in a 70% solar panel efficiency loss.


Loss Factor: 0-100%    Performance Factor: 0-100%
Shading is the greatest enemy of your solar panel installation. Slight shading of a single cell within a solar panel can result in large losses for the entire solar panel that houses that cell. As technology progresses modules are getting better at bypassing the under-producing solar cells to minimize the effect on solar panel efficiency.  It still does not take away the loss on the system caused by that cell being shaded.

It is crucial to understand that when you decide on the location of your solar panel installation, it should be as clear from shading as possible. And don’t just think about the summer months when the sun is high in the sky. You need to think of those winter months when the Sun’s path is lower, making every tree on your and your neighbor’s property that much more harmful to your solar panel efficiency.


Summing Up Solar Panel Efficiency Factors

So there are all the things you should know about that will affect your solar panel efficiency and overall solar panel system performance. Yes — there are a lot — and it seems that if you add them all up your system is worthless, but that’s definitely not how the math works.

To understand the effect of each loss factor you have to multiply the performance factor (98%=0.98) by your overall system to understand the impact on solar panel efficiency and system performance that factor will have.

Realize that your solar installer/salesperson is taking all of this into account and is very knowledgeable about the types of performance losses and solar panel efficiency of the specific equipment they typically use in their systems. They will include these solar panel efficiency losses in their calculation when quoting you a price for a system that effectively meets your energy needs.