Do solar panels lose efficiency over time? Should you replace it at the end?

Find out if solar panels lose efficiency over time and whether its worth it to replace it.

Yes, solar panels lose efficiency over time. The loss in solar panel efficiency over time is called degradation and it is a natural consequence of exposure of the solar panel to ultraviolet rays and adverse weather conditions.

The National Renewable Energy Laboratory estimates this degradation to be between 0.5% to 0.8% per year. In other words, the solar panels annual production drops by 0.5% to 0.8% per year.

What is solar panel efficiency?

Efficiency in solar panels is defined as the energy output from a given surface area of the solar panel. The higher the energy output from a given surface area, the higher the efficiency. Similarly, lower the energy output from a given surface area, the lower the efficiency. As solar panels get more and more efficient over time, manufacturers can increase not only the efficiency of the solar panel but also the rated power capacity of the solar panel.

The below graph shows the power increase of solar modules over the last decade. At the start of the decade the maximum rated power of a solar panel was 295 Wp and towards the end of the decade this value almost doubled to 600 Wp. 

Trina Solar (

Why does solar panel efficiency drop?

The main reason for solar panel degradation over time can be broken down into three parts.

  • Light induced degradation (LID)
  •  Potential induced degradation (PID)
  •  Aging related degradation

Light induced degradation occurs when the solar panel is first exposed to solar irradiation and the efficiency of the solar panel is reduced by 1 to 3% on average ( This loss in efficiency cannot be avoided and happens once during the life of the solar panel. 

Potential induced degradation is caused by voltage, heat and humidity. However, the PID effect does not occur on all solar modules. PID occurs when the module voltage potential and leakage current drive ion mobility within the module between the semiconductor material and other elements of the module (example glass and frame), thus causing the modules power output capacity to degrade. This potential loss in efficiency can be avoided by using Tier 1 solar panels from quality suppliers. The solar panels from quality suppliers will have solid encapsulation and diffusion barriers that offer better long-term protection against PID loss.

Solar panels have a design life between 25 to 30 years, during this period the solar panels are exposed to heat and cold along with rain, snow, hailstorms, etc. The natural wear and tear of the solar panels causes the solar panel efficiency to drop. 

What other factors can affect solar panel efficiency?

Apart from the three factors mentioned in the previous section there are other factors that directly and indirectly affect the efficiency of the solar panels and the solar plant.

These factors are discussed below.

Solar panel orientation

The angle of the solar panel and the amount of light hitting it are both important factors that can either reduce or increase the efficiency. For example, if the project is located in the south of the equator, solar panels facing north produce maximum power and energy. Similarly for projects located in the north of the equator, solar panels facing south produce maximum power and energy.

Pitch of the roof

The slope of the roof will impact how much sunlight is hitting the solar panels throughout the day and has a direct impact on solar production.


Higher temperatures can reduce output and lower the efficiency of the solar panels.


A small shade on a solar panel can greatly reduce the solar panel's output. In most of the residential solar projects, 15 to 18 solar panels are connected in series to form a string. If any one of the solar panels in the string has a shadow on it, it can lead to massive loss in production and reduce the overall efficiency of the solar plant.


Design of the solar plant plays a key role in total plant performance and solar panel efficiency. Solar plant design is the process of designing a solar plant considering the total plant capacity and breaking this information down to string design, number of inverters, protection devices, panel position and orientation. A good design ensures using the right size of cables and inverter. If cables and inverters are undersized it will lead to a drop in solar panel efficiency and if they are oversized, it could financially impact the project.

Balance of system

Balance of system are the components used in the solar plant apart from the solar panels. This includes mounting structure, cables, inverters, and protection devices. Its key is to size and use quality products for the balance of the system. It is highly recommended to use good quality suppliers for all components used in the solar plant, especially since the life of the solar plant is estimated between 25 to 30 years.

The factors mentioned above must be assessed during the design and installation of the project. By using qualified and certified installers, the efficiency losses within a solar plant can be drastically reduced. 

What are the standard warranty and guarantees offered by manufacturers?

Solar panel manufacturers generally provide two types of warranties. The first is a product warranty and the second is a power warranty. The product warranty covers the anodized aluminum frame, the glass protecting the top of the panel, the IP67 rated junction box, the solar cells and connectors. The product warranty is very similar to the standard warranty you get when you buy a new product.  Linear power warranty on the other hand takes into account the degradation of the solar panel over time. Most manufacturers provide a warranty on the power output of the solar panel.

The warranty period provided for product warranty and linear power warranty is decided by the manufacturer. Most Tier 1 module suppliers like Jinko Solar, Trina and JA solar provide 12-year product warranty and 25-year linear power warranty on the solar panels

How much solar production do I lose due to solar panel degradation?

Jinko solar module JKM545 has a module efficiency of 21.13% at standard test conditions. The manufacturer provides a 25-year linear power performance warranty at 0.55% annual degradation. This means after 5 years of operations the solar panel is expected to output 95% of its rated power and after 10 years of operations output 92% of its rated power. 

In 5 years of operations, there is 5% drop in production and in 10 years of operations, there is 8% drop in production. The production drop is linear across the life of the solar panel, this can be observed from the figure above. 

Do I need to replace my solar panels due to degradation with higher efficiency and higher power panels?

The solar power that can be packed into a panel has almost doubled in the last decade, also the efficiency of solar panels has increased by over 5% in the last couple of years. It can be noted that in the next few years, the power capacity and efficiency of solar panels will further increase. Replacing old solar panels with new solar panels is called repowering. This is common in large solar projects. 

Given that in most cases a solar installation has a pay back in less than 5 years, it is not advisable to replace the modules, especially since most solar panel manufacturers provide a 25 year performance warranty.

What must you consider while installing solar panels on your roof?

Efficiency of solar panels are affected by multiple factors, some of them can be controlled and others can’t. While deciding on installing solar power on your roof, you must consider buying solar panels from Tier 1 suppliers. Solar panel suppliers are ranked into Tier 1, Tier 2, and Tier 3. Tier 1 solar panels are panels that are manufactured by big brands who have a good reputation in the industry. It is a lot safer to build a solar plant using Tier 1 suppliers than Tier 2 and Tier 3. This doesn’t mean Tier 2 and Tier 3 are bad, but Tier 1 solar panels are a good marker for trust and reputation. Using tier 1 suppliers one can reduce efficiency losses within a solar plant.

The other efficiency losses come during the design and installation phase of the solar plant. This loss can be minimized by using certified solar plant installers.


It is important to note one cannot eliminate efficiency losses but can minimize it by using quality solar panels and balance of system, sizing the solar plant correctly and using certified installers to install the project.

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