Solar panel efficiency isn’t as important as you think



blue polycrystalline solar panel
When it comes to solar panels, what should you look for above everything else?

If you’ve been looking into putting solar panels on your roof, you’ve probably come across the term “solar panel efficiency”. 

Spoiler alert: Solar panel efficiency really isn’t that important. Solar panel manufacturers love to use efficiency ratings as a way to boost their brands’ legitimacy, but it’s mostly just marketing. 

In reality, solar panel efficiency doesn’t matter as much as other performance metrics in most cases. Not only that - when a solar panel has higher efficiency, it allows the brand to justify a higher price tag, and in turn, causes homeowners to shell out more money then they need to (without giving substantial added benefits). 

Find out if going solar is worth it in your area

What is solar panel efficiency? 

Solar panel efficiency measures how much of the sunlight that hits a solar panel is converted into electricity. 

So, if a solar panel has an efficiency rating of 15%, that means 15% of all the sunlight that hits the surface of that solar panel will be turned into usable electricity, under the right conditions - specifically the Standard Test Conditions (more on that below). 

Watch this video to learn more about solar panel efficiency from SolarReviews CEO Andy Sendy:

Factors that impact solar panel efficiency 

Things like dust, dirt, snow, debris, and shading will all impact how efficiently your panels operate, but that isn’t really what we mean when we talk about the efficiency of a solar panel. 

When talking about efficiency ratings, it almost entirely relates to the technology used to make the panel. Nowadays, almost all residential solar panels are made of monocrystalline solar cells because they are more efficient than other solar cell types. But there are different types of monocrystalline solar cells that are even more efficient than the traditional ones. 

For example, some manufacturers use PERC or HIT solar cells that boost solar panel efficiency by absorbing more light than traditional solar cells. Other solar panels use half-cut cell technology to increase efficiency by literally cutting solar cells in half to reduce resistance as electrons move through the cells.

It’s not just about the solar cell though, efficiency can be increased other ways, too. In fact, some companies have started moving towards multi-busbar technology. All this means is they use multiple, ultra-thin wires to move electricity through the cells. Because the wires are so thin, there is less shading on each cell, allowing them to collect more sunlight.

Even choosing a white backsheet for panels can make them more efficient because it keeps the solar cells cooler. 

How is efficiency calculated? 

Keep in mind that the efficiency rating listed on a solar panel’s specification sheet is measured in a lab under something called Standard Test Conditions, or STC for short. 

So unless the solar panels on your roof are at a constant temperature of 25°C and are receiving 1,000 watts of sunlight per square meter, then the actual operating efficiency of your panels will be a little different. 

If you know what the solar irradiance levels are in your area, you can do some quick calculations to figure out how efficient a panel will be where you live. First, multiply the area of the solar panel by the irradiance level in your area. Then divide the power rating of your panel by that number. Multiply that by 100, and you have an estimated efficiency for a solar panel in your location. 

How efficient are solar panels? 

Most solar panels on the market today are somewhere between 16% and 20% efficient

Anything above 20% is considered a premium efficiency panel. This sounds relatively low, but in the grand scheme of things, it really isn’t. Car engines, for example, are only between 12% and 30% efficient

Right now, SunPower sells solar panels that are 22.8% efficient, making them the highest-efficiency residential solar panels on the market today. Other premium efficiency panel manufacturers include REC Group, Panasonic, Silfab, and LONGi.

Does solar panel efficiency impact solar installation prices? 

Yes, solar panel efficiency does have an impact on price. Those premium efficiency panels we talked about earlier tend to come at a higher price than standard efficiency panels, typically around $0.15 per-watt more

However, the industry is starting to see more high-efficiency panels come from Tier 1 Chinese manufacturers, like Trina Solar. Chinese manufacturers charge way lower prices for these high-efficiency modules than brands like SunPower, so it will be interesting to see what impact this has on the market. 

How long will it take you to pay off your solar panel system?

Does solar panel efficiency really matter? 

Like we said earlier, solar panel brands love to bring up efficiency ratings. And we can’t blame them! Saying you’ve beat the competition by having a record-breaking efficiency rating looks really good for the brand. But while it is nice to have a high efficiency panel, it’s really not going to do much good for most homeowners. In fact, all it will probably do is increase the price of the solar installation. 

What really impacts how much electricity solar panels produce is the wattage, or power rating, of the panel. For one thing, the efficiency of a panel directly affects what the power output will be. You’re probably not going to find a solar panel with a high power output and a low efficiency rating. 

Not only that, but the wattage of a panel serves as a cap of how much power the solar panels can produce. So say if you have two 350-watt panels, one with an 18% efficiency rating and one with a 21% efficiency rating, they’re both only going to be able to produce 350 watts of power.

In this case, you’re probably better off with the 18% efficiency panel, because it’s likely cheaper.

Is there ever a reason to get high efficiency solar panels? 

Technically, yes you should get solar panels with a higher efficiency rating if you have limited roofing space. But again, the efficiency will be reflected in the power rating. 

If you have a small roof, or only a small portion is suitable for a solar installation, get panels with a higher wattage which are likely to have a higher efficiency rating. It may be more expensive, but it’ll be the best way to get the amount of solar that you need on your roof to cover your electric bill. 

Learn more: How many solar panels do I need to run my house?

What to look for instead of solar panel efficiency 

So if you’re not supposed to look at efficiency ratings, what are you supposed to look at? As we’ve already mentioned, power output is a big one. The higher the power rating of a solar panel, the fewer you’ll need to get the desired system size. 

We also recommend taking a look at the panel’s warranties, specifically the performance warranty. The performance warranty tells you how much power the panel will be able to produce as it gets older. As a general rule of thumb, you want a panel with a 25-year linear performance warranty, with a degradation rate of no more than 2% in Year one and no more than 0.5% for the remainder of the warranty period. 

Also take a look at power tolerance and temperature coefficient ratings. Both of these specs give you insight into how the panel will perform under real world conditions. Look for power tolerance ratings around -0/+5% and temperature coefficient ratings between -0.3% and -0.5% per degree Celsius.

And of course, you should consider the price of the system when choosing panels. Ask for multiple quotes from different solar installers to get an idea of what various brands of panels cost in your area; don’t just go for the installation with the highest-efficiency panels. 

Instead, take a look at the performance specifications and warranties for the other systems you are quoted. Chances are, they'll be cheaper and just as capable of eliminating your electric bill. 

See what installers are charging for solar panels based on your location

Key takeaways

  • Solar panel efficiency is the measure of how much sunlight that hits a solar panel’s surface is converted into electricity for homes to use.
  • The wattage of a solar panel is a much better indicator of how much power a solar panel will produce, plus it has already taken the efficiency of the panel into account.
  • Typically, premium efficiency solar panels will cost more to install than standard efficiency panels.
  • In addition to the power rating, take a look at the panel’s warranty, power tolerance rating, temperature coefficient, and price.

 - Author of Solar Reviews

Catherine Lane

Written Content Manager

Catherine is the Written Content Manager at SolarReviews. She has been researching and writing about the residential solar industry for four years. Her work has appeared in Solar Today Magazine and Solar Builder Magazine, and has been cited by publications like Forbes and Bloomberg.

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