Solar power is one of the cheapest and most accessible forms of renewable, green energy available today. But before you install a solar panel system it pays to do some research. Not all solar installations are equally efficient or cost-effective over their lifespan.

Solar power continues to grow in popularity over the US. Many people decide to install solar power systems because of the cost savings of switching to solar power. Even if cost savings aren't your primary concern, any conscious consumer will want to make their energy usage more efficient.

Before comparing the efficiency of solar panels, you should learn how to compare efficiency metrics for different manufacturer brands. Solar panel efficiency is an important consideration and a useful metric to determine how much power a solar panel can produce compared to other products on the market.

There are many questions when it comes to solar efficiency.

What are solar efficiency ratings?

How is solar efficiency measured?

How much can efficiency measures impact the amount of electricity your system generates?

This post will answer all your questions and explore what solar panel efficiency is, why it's important, and how you can measure and maximize it.

The importance of solar panel efficiency

Solar panel efficiency is essential for both cost savings and responsible energy usage. When your system has a higher efficiency rating, there is more sunlight available which your solar panel system can turn into electricity.

While the weather at your location will play a big part in your capacity to generate solar power, efficiency is not a measure of available sunlight. Instead, it looks at how much of the sunlight that hits your solar panels will actually get turned into electricity. For example, if a solar panel has an efficiency rating of 20%, that means just 20% of the sunlight which hits your panels will convert into electricity.

Looking closely at the efficiency of solar panels is essential to anyone who wants to get the most out of their investment. But it's particularly important if you have limited space for your solar installation. If you have a small roof on a tiny home, cabin, or vehicle, high-efficiency panels are appealing. Efficient solar panels can help you get the most power possible from the limited space you have available.

What determines solar panel efficiency?

The efficiency of a solar panel is affected by several different factors. The placement of your solar cells and the amount of available sunlight in your location will play a significant role. Ultimately, efficiency is determined by conversion rate. Conversion rate is the percentage of incoming sunlight a solar panel can convert into usable solar electricity.

What does solar panel efficiency refer to?

The term 'solar panel efficiency' can refer to two things. The first is the panel's built-in solar energy conversion capacity. The second is the solar panel's efficiency when reaching maximum energy output. The second option can be improved through optimal installation and operation by a homeowner. The first is determined by the manufacturer and the quality of the solar panels they produce.

When it comes to the efficiency of the panel itself, not all systems are created equal. Solar panel manufacturers will consider these main factors when designing and producing efficient solar panels:


The types of materials used in your solar panels will impact the efficiency of your solar installation. Solar panels are built using several different materials. Common materials include monocrystalline silicon, cadmium telluride, polycrystalline silicon, and more.

Most commercial solar panels available on the market will use one of the two types of silicon cells. These silicon cells are either monocrystalline silicon or polycrystalline silicon photovoltaic (PV). The choice of material will impact how well the sunlight converts to solar electricity. The purity of the silicon used directly affects the quality and output of your system. Monocrystalline is the more efficient choice of the two, but also the more expensive silicon option.

The difference in the quality between the two types of silicon comes from the manufacturing process. Polycrystalline silicon photovoltaic cells are made using a relatively cheaper production process than monocrystalline. This difference in processing renders polycrystalline cells less efficient and less tolerant to heat. While both types of silicon are viable options for your panels, if you live in a state with very high temperatures, monocrystalline panels are generally better suited.

Wiring and busing

The wiring and busbars found on a solar panel capture and transfer electricity. It's possible to boost power output by switching up the number of busbars to improve efficiency.


Reflection can have a significant impact on the efficiency of your solar panel setup. If sunlight is being reflected away from a solar panel, it may lower a panel's efficiency. The manufacturer may place a glass layer on top of silicon solar cells to reduce the amount of reflection.

Light absorption

A panel's efficiency will significantly increase if it can absorb light on both sides of a cell. Bifacial solar panels are a relatively new type of solar panel designed to be more efficient by absorbing sunlight on both sides.

The ability to absorb variable wavelengths of light can also improve conversion efficiency. Multi-junction solar cells are another new technology that could help increase efficiencies in the near future.

Degradation Rate Over Time

Solar panels have a long lifespan, often 25 years or more, but they will degrade slightly over time. Solar panels will usually lose between 0.5% and 1% of their rated energy output each year as they age.

Newer technology usually lasts longer, because it starts with higher efficiency, and will degrade at a slower pace. You will generally find the panel degradation rate in the solar panel manufacturer's warranty.

What are solar efficiency ratings?

When choosing solar panels, you should always do your due diligence and review the solar cells' efficiency rating. A solar panel with a higher efficiency rating will produce more kilowatt-hours of energy per watt of power capacity. In the US, efficiency ratings usually range between 15 to 20 percent. Just five years ago, the average panel efficiency was 15% showing the fast improvement in solar technology.

When comparing panels, you should also check the degradation rate. If two panels have the same efficiency rating, see if the degradation rate differs. The panel with the lower degradation rate will be the better buy, as it will be more efficient and produce more solar power over the life of your system.

You should also aim to buy high-quality solar panels. Quality does impact efficiency, and newer technology has improved efficiencies. Try to get the best solar panels available within your budget.

How to Maximize Solar Panel Efficiency

Estimate Your Solar Electricity Needs

Before starting a solar installation project, you should estimate your solar power use. If you want to power all your electronics and appliances, you'll need to plan to generate enough power for your energy consumption needs.

To work out your solar panel needs, you can multiply your home's hourly energy requirement by the peak sunlight hours available for your area, then divide that by a panel's wattage. Our solar panel calculator makes this easy for you, so you don't have to do the math.

Tips for calculating your solar needs:

  • Review your electricity bills over 12 months to determine your annual electricity needs
  • Consider any planned changes - like the addition of an electric vehicle
  • Do a home energy audit to find possible efficiencies in your energy usage

Home Energy Audit

When calculating your solar energy needs, it's also a great time to take stock of your energy usage and see where you can make reductions. This process is known as a home energy audit. This process will help you understand where your home is wasting energy and improve your home's efficiency. A home audit will look at the following:

  • Lighting: Is your lighting energy efficient, or could you switch to LED light bulbs?
  • Appliances and electronics: How do you use your appliances and electronics. Could you use them more efficiently or switch to more energy-efficient products?
  • Heating and cooling: How much energy do you use to heat and cool your home? Will your heating and cooling usage impact the amount of solar energy you need?
  • Weatherizing: Would weatherizing your home improve your heating and cooling efficiency? Aproporaute weathering can significantly reduce how much solar electricity you need to produce.

Direction and Tilt of Solar Panels

Whenever you install a solar panel system, you should ensure you have ample available sunlight and do the correct installation to utilize it. Even with the best, most efficient solar panels, your solar energy effectiveness will always hinge on the availability of sunlight.

The tilt and direction of your solar panels impact the amount of sunlight they can absorb. Proper installation and ideal panel angle will also make a drastic difference. The orientation and tilt angle of your solar panels can affect efficiency, particularly in the long term.

The perfect tilt angle is 28°–30°, and the ideal orientation will depend on the location's hemisphere. US homeowners in the northern hemisphere should ideally install their solar panels facing as close to the south as possible.

To get the most sunlight exposure possible, homeowners can also clear trees, shades, antennas, or other obstructions that may block or shade your panels.

Many conventional solar panels will be installed in interlinked strings. This installation method uses string inverters or centralized inverters. Centralized inverters are common because they are usually the most cost-effective choice of the solar inverter options on the market.

String inverters use multiple strings of panels that are connected to a single inverter. The system is only as good as its weakest link. If the shade obstructs even a single panel, it can affect the entire string's ability to produce efficient electricity. All the solar panels in your installation must have as clear an opening to the sunlight as possible.

Hours of Sunlight

The available hours of sunlight differ in each location and throughout the year. The number of daily sunlight hours will increase during warmer summer seasons and will be higher when you're closer to the equator.

Availability of sunlight hours will differ from state to state, making some locations better suited for installing solar power. Some states like Arizona, New Mexico, and Nevada have plenty of sunlight year-round to power an off-grid solar setup. Other states like Washington, Maine, and Vermont have fewer sunshine hours or dark winters.

Even though they make energy from the sun, solar panels operate better when installed in colder temperatures. Solar panels work most efficiently in the winter - even though they get less sunshine in the cooler months and make less power.

Knowing the available hours of sunlight year-round in your location and the peak sunlight hours will help you understand how efficient your solar panel setup will be. It can also determine whether you will need to get solar battery storage or battery chargers for situations when there are not enough sunlight hours to meet your electricity needs.

What are Peak Sunlight Hours?

The optimal time to generate solar power is when the sun is at its highest point in the sky. This time of day is referred to as peak sunlight hours. Peak sunlight hours are not the same as the tidal hours of daylight your property is exposed to. It is the number of hours when your solar panels can receive direct, intense sunlight each day. During these peak sunlight hours, your panels can generate 1,000 watts of photovoltaic (solar) power per square meter.

Solar Panel Maintenance

Solar panel maintenance helps extend the life of your solar installation and improve its efficiency. Irregularly or poorly maintained solar panels would decline in efficiency over time. Generally, solar panels are low maintenance, but this can vary. The amount of maintenance required will depend on your local climate and weather and your initial setup.

Roof panels are harder to access and clean but usually require less regular maintenance. If your roof has lots of leaves, bird droppings, sap, or other debris falling on it, then you may need to rinse and clear off your panels every few years.

An average amount of rainfall is usually enough to clear dirt off roof-mounted panels. However, if you live in an area with low rainfall, you may need to clean your panels with a garden hose. You can hire a professional tradesperson to do this maintenance for you, as climbing onto your roof can be dangerous.

Ground-mounted or free-standing solar panels are easier to reach and clean but may need more regular maintenance. If you live in a location that gets snow during the cooler months, you should check your ground-mounted array regularly. Proper snow maintenance involves keeping the area below your panel's base clear. Winter maintenance will allow any new snowfall to slide off the panels easily.

Most solar panels are strong enough to withstand bad weather like rain, snow, and hail. But if the area below your solar panels isn't clear during snow season, then snow will start to accumulate on top of your solar panels. A build-up of snow can obstruct sunlight, reduce efficiency and cause potential damage to the system.


Solar panels have a long lifespan, but they don't last forever. The industry standard lifespan for warranties is 25 years. That's not to say solar panels can't last longer than 25 years. Some solar arrays installed in the 1970s are still producing clean energy even 40+ years later.

The lifespan of your solar panels will impact their efficiency in the long term. Longevity or early degradation in your solar panels can be affected by both the initial quality of the hardware and outside factors. Outside factors can differ, and the weather in your region is the most significant variable.

Poor installation can impact the longevity of your solar array. A botched installation is one of the risks that come with DIY solar installations. If you don’t know what you’re doing it’s best to work with a professional. Solar panels are a long-term investment, so it pays to use a quality contractor for your installation. A poor installation can lead to repeated stress on your panels which can cause microfractures in the solar cells. The panels are designed to withstand this pressure, but over years or decades, the stress put on the cells will ultimately shorten the lifespan of your solar array.

Soiling is the other major factor in early degradation. Soiling losses can refer to a panel's power loss from external elements such as snow, dirt, dust, bird droppings, and other particles that can accumulate on them. Be sure to maintain your panels to prevent these issues.

Obtain bids and site assessments from contractors

Choosing the right solar contractor to install your power system is an important decision. A good contractor will ensure your panels get correctly installed at the most efficient angle and location on your property. A professional contractor can also help you navigate permits and licenses.

We recommend you get at least three bids for your solar panel installation. You will need to ensure the bids are all based on the same characteristics and metrics so you can make a fair comparison.

What to look for in a bid

Installation bids or quotes should tell you the maximum generating capacity of the system. Generating capacity is measured in Watts (W) or kilowatts (kW). You should also request an estimate of how much solar energy the system will produce on an annual or monthly basis. You can then compare this figure against your existing utility bills.

All bids should also include the total estimated cost of getting the solar panel system up and running. The vendor's quoted price should consist of all necessary hardware, installation labor, connection to the grid, sales tax, permitting, and a warranty.

Look out for the cost/watt and estimated cost/kWh. These are the most valuable and essential metrics for comparing prices from different vendors. Prices can differ even when using solar panel kits because installers may use different installation equipment or charge different rates for labor.

Understand available financing and incentives

If cost efficiencies are a top priority, then you don't want to forget about researching solar rebates and financial incentives.

Solar power installations are encouraged in the USA as a positive renewable energy source. Therefore, solar installations are eligible for various tax credits and other state and federal incentives. To research all your financial state, local, or utility provider incentives, visit the Database of State Incentives for Renewables and Efficiency.

The federal solar tax credit, also known as the investment tax credit (ITC), lets homeowners deduct 26% of the cost of a solar system installation off their federal taxes. The investment tax credit can apply to both residential and commercial solar power installations, and there is no cap on the credit's value.

It's easy to claim the investment tax credit for your solar installation. Just tell your accountant that you've switched to solar power when it's time to file your yearly federal tax return.

In addition to incentives, there are also multiple solar financing options available. The Clean Energy States Alliance guide can help homeowners understand their solar financing options.

Work With Your Utility Provider

Work with your utility provider to ensure you understand how billing and net metering will work for your solar system. You can also ask them about any additional utility fees you may need to pay. Or, they may even offer rebates or financial incentives.

If you’re not doing a grid-tied installation you may instead want to look into portable solar generators to ensure you’re never without power.


Advances in modern technology make it easier than ever to install a cost-effective and eco-friendly solar power system in your home. With some research and due diligence, you can ensure your installation will be as efficient as possible, so your solar costs are lower now and in the long term.