Solar panel efficiency measures how well solar panels are able to convert sunlight into usable electricity.
Thanks to advances in technology, solar panel efficiency has steadily improved over time. As a result of this increase in the current solar panel efficiency, you can get the same amount of power with fewer panels on your roof, or more power with the same number of solar panels.
This article will explain what solar panel efficiency means, how the average efficiency of solar panels affects power production, the role high-efficiency solar panels play in the clean energy transformation, and more.
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What Determines Solar Panel Efficiency?
Your solar panel’s ability to produce energy by converting the sunlight it receives to usable electricity depends upon five crucial factors: materials, wiring, reflection, age, and temperature.
Impact of Materials on Solar Panel Efficiency
Solar panel manufacturers use different substances to create different types of solar panels, including:
- Polycrystalline silicon
- Monocrystalline silicon
- Cadmium telluride
- Multi-junction solar cells
Each solar panel material helps determine how much sunlight will be converted to electricity. Most manufacturers today use monocrystalline silicon solar cell technology for their panels because of their superior efficiency. Monocrystalline photovoltaic (PV) cells are more efficient than other panel types because they are made from a single crystal of silicon, which means electrons can move more easily through the cell.
In addition to existing solar panel materials like silicon, solar companies are exploring other materials that could deliver even more efficient panel technology, including both organic and more recyclable options. (We have a deeper discussion of these developments below.)
Impact of Wiring on Solar Panel Efficiency
Solar panels can be wired in series and in parallel, and the different wiring configurations have an impact on how your solar panel system will function and how much power it can produce. There are advantages and disadvantages to each option, so it’s one of the decisions a solar panel company will make when designing the ideal solar power system for your home.
Wiring also helps determine the right inverter for your solar arrays, whether it’s a string inverter, power optimizer, microinverter, hybrid inverter, or something else entirely. The type of inverter that is used–especially in terms of how power is collected from the panels and sent to your house, battery storage, and electricity grid–can impact your solar panel system’s overall efficiency.
Within the panels themselves, wiring and “busbars” (the metal connecting solar cells in the solar panel that actually captures and transfers electricity) have an effect on efficiency, with more efficient panels using different configurations and different technologies to improve this process.
Impact of Reflection on Solar Panel Efficiency
The amount of light reflected away from a solar cell's surface impacts solar panel efficiency. Solar panel efficiency depends on the amount of light they can absorb and convert into electricity.
If light reflects off the surface of the panel, it can’t become electricity, which lowers the efficiency of that panel. Solar power panels with textured surfaces and anti-reflection coatings can help minimize the amount of light that gets reflected away.
Impact of Age on Solar Panel Efficiency
The average lifespan of solar panels is about 25 to 30 years. Throughout this period, your solar system should generate all the electricity you need to power your home, unless the panels get blocked by too much shade, dirt, or other debris.
However, during that 25- to 30-year timeframe, your panel efficiency will slowly decrease over time, until they eventually reach a point where the solar panels don’t create enough electricity for all of your home’s needs. This degradation rate is factored into the initial design of a solar power system, but it still impacts your solar panel’s efficiency.
Impact of Temperature on Solar Panel Efficiency
The climate of your area impacts solar panel efficiency, as the energy levels of electrons are determined by their level of excitement. Contrary to what you might think, solar panels are more efficient at lower temperatures. Because the electrons on the thin layer of silicon are calmer and less excited, they can move with greater ease and increased numbers through the transmission lines to generate solar power.
When it is hot, the electrons are more excited and moving in different directions. This makes it more challenging for them to move effectively through the transmission lines, leading to lower solar energy production levels during a hot day.
In other words, you will experience higher voltage and enhanced generation efficiency during a cold sunny day compared to a hot sunny day.
How To Calculate Solar Panel Efficiency
The easiest way to calculate the efficiency of your solar panels is with this formula:
Efficiency (%) = (Pmax ÷ Area) ÷ (1000) x 100%
- Pmax = max solar panel power (in Watts)
- Area = length x width of the solar panel (in m2)
- 1000 = Standard Test Condition (STC) irradiance
Let’s break it down a bit for deeper comprehension.
1. Find your panel's max power capacity
You can find this information labeled as "Pmax" or "maximum power" on the spec sheet for your solar panels.
2. Get your panel's physical dimensions
The standard panel dimensions are 65 inches by 39 inches, but you can also find and verify this information for your own panels–specifically, length and width–on the specification sheet.
3. Calculate the power unit area of your panel
To get the power unit area of your module, divide its Pmax into its area.
4. Factor in the STC
Standard Test Condition (STC) represents the ideal environment used by solar manufacturers when testing average solar panel output. These conditions include a cell temperature of 25 °C and air mass of 1.5, and solar irradiance of 1000 W/m2. That value of 1000 W/m2 is what’s used in the efficiency equation.
5. Calculate solar panel efficiency
Using some sample numbers, we can walk through the math. Assuming your solar panels are 2 m2 in area, produce 400 watts, and receive 1,000 W/m2 of sunlight, the efficiency of your solar panels is 20%.
Efficiency (%) = (400 ÷ 2) ÷ (1000) x 100%
Efficiency = 20%
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Solar Panel Efficiency in 2023
The average solar panel efficiency in 2023 ranges from 15% to 20%. At the high end, the most efficient solar panels available for public use achieve 22% efficiency.
While the majority of solar panels available in the United States today are below 20% efficiency, we can anticipate that the efficiency of solar energy systems will continue to improve as the solar industry pursues advanced photovoltaic technology.
History of Solar Panel Efficiency
The first major breakthrough in solar power was made by Alexandre-Edmond Becquerel in 1839. He discovered the photovoltaic effect, the root of the modern solar cell. Since then, solar innovation and improvement have remained a focus for the scientific community and the solar industry as they look to improve solar panel efficiency and increase energy output over time.
Below is a brief synopsis of major advances in solar energy efficiency over the last three decades, courtesy of new solar panel technology.
- 1992: The University of South Florida manufactures a 15.89% efficient thin-film cell
- 2012: Solar Frontier achieves 17.8% efficiency
- 2015: First Solar CdTe thin film technology reaches 18.6% efficiency
- 2015: SolarCity hits 22.04% efficiency
- 2015: Panasonic’s 72-cell prototype achieves 22.5% efficiency
- 2015: SunPower attains 22.8% efficiency with its X22 panel
- 2016: The Swiss Center for Electronics and Microtechnology and the National Renewable Energy Laboratory achieve 29.8% efficiency
- 2016: The University of South Wales researchers attain 34.5% efficiency
- 2017: George Washington University and Naval Research attain a 44.5% solar cell efficiency
- 2018: Research into perovskite reveals a theoretical upper limit of 66% efficiency
To be clear, a majority of these high efficiency ratings of the most efficient solar panels are achieved in a laboratory setting, and aren't yet possible at a commercial scale due to high production costs.
The National Renewable Energy Laboratory has been tracking the increase in research-cell efficiencies for a variety of solar panel technologies, and it shows the continued stair-step of improvements over time:
Solar panel efficiency over time has come a long way, thanks to the relentless efforts of solar panel manufacturers and scientists. These continual improvements in solar panel efficiency are great for the environment because they reduce our reliance on electricity created from fossil fuels and send even more energy to the grid. The clean energy they produce helps reduce our reliance on fossil fuels and also helps us combat greenhouse gas emissions.
Why are Modern Solar Panels More Efficient?
There are two main reasons why modern solar panels are more efficient: advances in research and the materials used.
Solar Power Research
The desire to improve solar power efficiency drives the development of new solar panel technology, as these significant breakthroughs to improve solar energy systems continue in solar research centers across the globe.
Leading research facilities like the National Renewable Energy Laboratory and The Swiss Center for Electronics and Microtechnology use their resources, technologies, and expertise to conduct experimental studies that help develop the high-output solar panels of the future.
Improvements To Materials
Silicon has been the preferred semiconductor material for generating solar energy, and manufacturers have used silicon for decades because solar cells fabricated from it are low-cost, high-efficiency, and long-living.
Solar panel researchers continue to find new ways to increase the effectiveness of silicon, including the creation of ultra-thin crystalline layers, enhanced production processes that remove silicone dust from solar cells, and next-generation growth methods. These modern techniques have resulted in the dramatic solar efficiency improvements we discussed earlier in the article.
Beyond silicone, ongoing experimentation with more efficient materials like perovskite, and the incorporation of various solar technologies in the design process have combined to create the potential for even more highly efficient panels in the future.
Comparing Cost and Value to Rate Efficient Solar Panels
The average current solar panel efficiency ranges from 15% to 20%, but if you wish to install more efficient panels, you should be ready to pay more.
When designing a solar power system, consider the cost-benefit tradeoff between the higher price of more efficient panels and the amount of additional energy they create before you make that investment. It might be more economical to just install a few more lower-efficiency panels, compared to upgrading all panels to a higher efficiency to produce the same amount of power.
Because most customers buy panels that are 15% to 20% efficient, most manufacturers still produce a majority of their panels in that normal efficiency range. However, some circumstances may warrant the installation of high-efficiency solar panels, such as limited roof space or a complicated roof layout.
Roof Space
The space on your roof can impact the number of panels that can be installed. If that space can't fit the number of lower-efficiency panels required to generate enough power for your needs, solar installers may use more efficient panels at an extra cost.
Roof Layout
The design of your roof also determines the number of residential solar panels your home needs, and how they can be positioned. For example, if the area of your roof with more space isn't angled to receive much sunlight, the area with less space will be considered. This could result in a custom layout for your solar panels which could increase your budget.
If you have a complex roof layout, Palmetto can work with you to determine the solar panel system design that will generate the electricity you need.
The Future of Solar Panel Efficiency
Various research centers are working to increase solar panel efficiency by experimenting with new materials such as organic photovoltaics, concentration photovoltaics, and quantum dots. Manufacturers are also incorporating exciting new technologies that drive the industry forward, including:
- Building-integrated PV panels
- Perovskite solar cells
- Floating solar farms ("floatovoltaics")
- Solar skins
- Solar fabric
Floating solar farms are being deployed worldwide, and studies show that in utility-scale settings they can produce more electricity compared to ground-mounted or rooftop installations, thanks to the cooling effects of the water that boost their efficiency. The application of building-integrated PV and solar skins also demonstrates that the future of solar power efficiency is looking bright.
How To Improve the Efficiency of Your Solar Panels
Solar panels are designed to run efficiently without the homeowner needing to do anything. However, you can help ensure your panels are reaching their maximum efficiency by engaging in two simple chores:
- Keep shade off your solar panels
- Clean your panels regularly (Learn more about Solar Panel Cleaning)
You can also help detect possible issues with the efficiency of your solar panel system by tracking its performance through a mobile app like the Palmetto App and enrolling in a routine maintenance service like Palmetto Protect. If the performance of your panels has deteriorated, Palmetto can advise you on steps you can take to generate the electricity your home needs.
Key Takeaways
Increasing the average efficiency of solar panels remains a key driver of developments in the solar panel industry. Improvements to efficiency is good news for everyone involved in the New Utility Revolution, as it means we can power our homes and businesses with more of the sun’s rays and fewer fossil fuels.
Since solar panel efficiency depends upon materials, wiring, reflectivity, age, and temperature, researchers pursue every possible lead to enhance those factors so that more electricity can be generated more effectively.
At Palmetto, we use some of the most efficient solar panels in the market to maximize your solar production. We know that saving money on your utility bills and helping to save the planet is important to you, which means we’ll help you create the best possible solar panel system for your home.
Interested in adding efficient solar panels to your roof? Learn how much you could be saving with our Estimate Savings Tool today!
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Cory O'BrienSenior Director - Growth MarketingCory brings over 8 years of solar expertise to Palmetto, and enjoys sharing that knowledge with others looking to improve their carbon footprint. A dog lover residing in Asheville, NC with his wife, Cory graduated from UCSB. If you run into him, ask him about the company he founded to rate and review beer!
