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How efficient are solar panels?

The best panels in 2022 have efficiency ratings of at least 20%

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Written by Brian Church
Edited by Cassidy McCants

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    blue house with solar panels on the roof

    As technology continues to move forward, advancements in solar panel efficiency have made it possible for photovoltaic (PV) installations to produce more power than ever. With increased panel efficiency ratings, homeowners can maximize the amount of solar power they generate without taking up more roof space with additional panels.

    Solar panel efficiency, which is the percentage of sunlight a panel converts into power, is a significant factor when comparing solar power systems. While a less efficient solar panel may be cheaper, it's likely to require more space to generate power equivalent to that of a high-efficiency panel.


    Key insights

    • Solar panel efficiency is measured in ratings and has increased significantly over the last 50 years.
    • When in use, solar panels slowly lose efficiency over time.
    • The efficiency of a solar system is higher or lower depending on external factors like pollen and snowfall.

    Solar panel efficiency

    The efficiency rating of a solar panel refers to the percentage of solar radiation that reaches the panel surface and is converted into electricity. In other words, it’s a measure of how much sun and sunlight can be captured by a panel and then put out as usable power. Solar panels with different efficiency ratings put out different amounts of electricity under the same conditions; efficiency is highly variable between modules.

    As Dan Carpenter, owner of West Coast Green, a website that publishes guides on sustainable energy topics, put it, “You could have two panels exposed to the same sunlight with the same environmental factors, and one could be putting out more energy than the other one, sometimes in a significant amount.”

    Today, the majority of commercially available solar panels have efficiency ratings between 15% and 20%, which means they can convert 15% to 20% of the available sunlight into energy. New technologies have produced some modern solar panels with tested efficiency ratings upward of 21% and 22%, however.

    You could have two panels exposed to the same sunlight with the same environmental factors, and one could be putting out more energy than the other one, sometimes in a significant amount.”
    — Dan Carpenter, owner of West Coast Green

    While a slight percentage increase may seem insignificant, even the smallest bit of extra solar power production can have a large impact on a system’s total energy generation over the life span of the panels.

    What are the most efficient solar panels?

    Today, the most efficient commercially available solar panels have efficiency rates above 20%. Efficiencies have been rising since 1976, when the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) began tracking related data.

    In 2022, researchers at the NREL created a solar cell with a record 39.5% efficiency, the highest of all time. This technology isn’t yet available in the form of a complete solar panel as of publishing, however.

    With a high-efficiency solar panel, you can expect an increased sticker price — but higher efficiencies translate directly to more energy production, which can help systems more quickly pay for themselves against traditional electric costs. Depending on your location, high-efficiency panels may even qualify for more renewable energy certificates (RECs) or local green energy incentives.

    What affects solar panel efficiency?

    When a manufacturer publishes a solar panel’s rated efficiency, the percentage refers to the module working in ideal conditions. In the real world, however, the actual amount of electricity produced by a solar panel is highly dependent on external factors and the quality of the installation.

    System factors

    Within a solar energy system, the technology and quality of every system part and its installation will factor into overall panel efficiency.

    Cell type: Solar panels are made up of individual solar cells, the efficiency of which directly correlates with total system production.

    Currently, the majority of PV solar panels are constructed with monocrystalline or polycrystalline silicon wafers (which give them black or blue tints, respectively). A treated glass layer on top can minimize the amount of sunlight reflected from a panel. By reducing reflectivity, panels capture more light and operate at high production efficiencies.

    Monocrystalline panels have wafers made from a single silicon crystal and are more efficient than polycrystalline panels. Polycrystalline panels are less efficient, but the manufacturing process, which uses wafers made from fragments of multiple silicon crystals, is simpler and typically results in more affordable panels.

    System parts and wiring: From the moment electricity leaves a solar panel, it slowly begins to lose power. For maximum efficiency, installations must be performed with the proper wire gauge and a minimum amount of space between solar panels and the home or building.

    Solar panel systems without properly sized inverters or microinverters (which convert the currents panels produce into usable energy) can also reduce overall electricity production. Even with the highest-efficiency panels, an improperly installed system will dramatically lower the overall electrical output.

    Modern panels may lose as little as 0.2% to 0.3% efficiency per year.

    Time: Time is an unavoidable influence on a solar panel’s overall efficiency. Reputable manufacturers include degradation rates for solar panels, which are presented as percentage losses in production over time.

    According to Carpenter, degradation rates vary between panels, and today’s highest-quality products may only lose 0.2% to 0.3% in production efficiency per year.

    External influences

    Solar energy production is also highly dependent on many environmental factors. Solar panels are reliant on sunlight, and they generate electricity at various efficiencies throughout the day and year.

    Particulate matter: If there’s anything blocking the intensity of sunlight on a roof, solar panels won’t be able to run at peak efficiency. In some warm, dry areas where solar works best, conditions may be subject to bouts of time with sand, smoke or pollen in the air, limiting total solar energy potential.

    Temperature: Like many electronics, solar cells work more efficiently at lower ambient temperatures. When conditions are too warm, overheating panels can reduce the system voltage, which is why proper thermal heat management is vital in maintaining the expected efficiency and overall longevity of a system.

    Shading: Even small amounts of shade coverage can significantly limit the total production of a PV system. For this reason, solar panels should always be installed away from trees and other obstructions.

    Sunlight: Throughout the day and year, the angle at which the sun hits your solar panels constantly changes, affecting the intensity and irradiance. Most solar panels will work at peak efficiency when the sun is at its highest in the sky, from 11 a.m. to 4 p.m.

    Weather: Solar panels can’t generate electricity while covered in snow, but they’re still able to produce power at limited efficiencies on days with cloud coverage. Rain also plays a small role in the PV efficiency cycle; it can provide a rinse to wash away any particulate matter, dirt or dust that’s built up.

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      FAQ

      How do solar panels work?

      Solar panels work by capturing sunlight and using its energy to generate electricity. Solar power is first produced as direct current (DC), then passed through an inverter. This modifies the electricity into alternating current (AC), which can be safely used within a home or sent to the power grid.

      What is the most efficient solar panel?

      The most efficient solar panels available in 2022 have efficiency ratings of 20% and above, and new modules are constantly in research and development. While individual solar cells have reached nearly 40% efficiency, these panels aren’t yet widely available.

      Do solar panels go bad?

      Yes, solar panels “go bad” in that they slowly degrade over time. Solar panel degradation dates are clearly stated on most manufacturers’ websites as a percentage loss in efficiency per year due to light degradation, component degradation and even a little bit of corrosion over time caused by weather and temperature fluctuations. High-quality solar panels are typically good for 20 to 30 years of efficient production.

      Bottom line

      The efficiency of a solar panel is highly dependent on solar cell technology and many real-world external factors. Ongoing advancements in solar panel efficiency continue to help homeowners capture more sunlight and convert it into usable electricity, even when they have limited roof space.

      We can expect to see high-efficiency solar panels become more widely available as technology improves and solar power becomes more popular among U.S. homeowners.

      ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. To learn more about the content on our site, visit our FAQ page.
      1. National Renewable Energy Laboratory, “News Release: NREL Creates Highest Efficiency 1-Sun Solar Cell.” Accessed May 25, 2022.
      2. University of Michigan Center for Sustainable Systems, “Photovoltaic Energy Factsheet.” Accessed May 25, 2022.
      3. U.S. Department of Energy Office of Energy Efficiency and Renewable Energy, “Solar Performance and Efficiency.” Accessed May 25, 2022.
      4. National Renewable Energy Laboratory, “Best Research-Cell Efficiency Chart.” Accessed May 25, 2022.
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