10 Elements that Impact Solar Panel Efficiency

10 Elements that Impact Solar Panel Efficiency

Solar panels can be a huge cost saver for your power bills. Find out how different elements may affect your system’s efficiency and hence your ROI.

How efficient are your solar panels? The average efficiency is around 19% but it can go up to 22% for high-efficiency panels such as the LG Solar NeON H.

Going from 19 to 22% may not seem like a big deal. However, every extra percentage point may yield significant increases in system performance with the latest LG NeON H panel now rated at 390W.

Take a look below to find out how to maximise your savings and returns. You want the most return for your money. So take a look at some factors that can affect total system efficiency.

Explaining Solar Efficiency

At today’s technology level, energy conversion is never 100% efficient. For example, the combustion engine used in cars has a maximum theoretical efficiency of 50%. But it’s closer to half of that in practice.

Similarly, a solar panel can only convert a certain percentage of sunlight into electricity. The expression for that conversion percentage is efficiency rating. 20% means the ability to convert 20% of the sunlight hitting the panel into electricity.

So, consider two solar panels that are the same size. One has an efficiency rating of 21%. The other panel is lower at 14%.

The one with the 21% rating will produce more energy than the lower efficiency one. How much more? Think close to 50% more kWh of electricity.

Obviously, top-tier panels maximise energy output and can have the biggest impact on your power bill. But that doesn’t mean you can’t save with panels of lower efficiency ratings.

However, there are a number of serious issues with cheaper solar panels. For more information on these issues, click here.

Generally, most solar panel efficiency ratings fall between 15% and 20%. There may be outliers on either side, including the top-of-the-line ones. Those can get up to 22% efficiency.

Keep in mind, though, that the majority of photovoltaic panels on the market fall under 20% efficiency.

The Elements

All quality panels go through extensive testing. However, there are certain things that you can do to minimise the potential for loss.

Everyone can benefit from maximising the energy that their panels produce. You can’t do much about efficiency variation between brands. However, you can make sure that yours performs to the best of its ability.

Make sure you have the most efficient solar panels you can afford. Keep these considerations in mind when buying and placing your panels:

Panel Types

There are a variety of panel types available on the market. They all convert sunlight into DC electricity, but they vary in efficiency.

Additionally, they don’t all look the same. They vary in size and shape. Some may look bulky and chunky. Others are sleek and thin.

You may even see integrated solar roof tiles on occasion. But as you can imagine, this variety is much pricier than the other varieties. So, they’re not a popular option for the average household.

Panel types go beyond aesthetics, though. There are 3 main types of PV panels on the Australian market:


First, this solar panel may be one of the best available to consumers as they offer some of the highest efficiency ratings of 15% to 20%.

Some manufacturers take the process one step further with hi-tech assembly. This process can help deliver higher than 20% efficiency.


These panel types are also made from silicon. However, it’s not as pure as monocrystalline. In addition, the silicon processing is different and gives these panels a distinct, mottled appearance.

But these panels are also able to catch more sun rays because of the silicon’s unique shape.

Thin Film

Lastly, these panels are slightly different than their counterparts. It’s all in the manufacturing process. Instead of putting pieces of silicon together, the manufacturers spray it on.

It requires less energy to make and you may see that these panels are a budget-friendly option.

The downside is the efficiency rating drops to approximately 8 to 10%. In addition, these panels are larger and may weigh more than the other types. This may lead to more time and effort during the installation process.

Also, you need a sturdy roof or mounting point because of the extra weight and size of these panels. Generally they are not used for residential systems any more.

Quality of Panels and Brands

Does the quality of your panels affect your potential savings? Very much so.

In a perfect world, everyone can afford top-tier panels. However, the reality is you may have to weigh the cost versus value.

Your ultimate goal may be to generate the maximum amount of energy. This helps ensure that you spend the least on buying excess from the utility.

Higher efficiency panels can help achieve those goals. But you may also have to consider the cost versus savings over time.

Is the upfront cost difference justified?

Generally, it is not a good idea to go with cheaper panels. They come with a lot of problems including cheaply made system components and panels.

When you can, go with the highest-priced system your budget allows. Remember, these systems are a 25-year investment. So the last thing you want is for them to break before their time.

Output Tolerance

What is output tolerance? It’s the measure of performance difference you may see when you install a panel.

For example, a fancy solar panel may have a 22.2% efficiency rating. But that rating comes from testing under ideal conditions in a lab. In real life, you can expect it to be plus or minus 3% of the manufacturing tolerance.

This needs to be a new section with an introduction. We have done from panel efficiency to system efficiency, two very different things. Detailed feedback from article 4 applies here too.

System Efficiency Factors

If you want the best returns on efficiency, you also have to look beyond the actual panels. Various system factors can contribute to overall efficiency.

You may expect a certain efficiency rating from just the panels alone. But these factors also contribute to efficiency in real life:

Inverter Efficiency

Next, the inverter converts from DC into AC for use in your home. Once again, the energy conversion process isn’t 100% efficient.

Location and Orientation

Also, keep in mind that how you place your panels can make a difference in output. They need to face at the optimum angle and direction. Otherwise, you won’t receive the output rating for that location.

However, you may mitigate this potential loss. Our team of solar power experts can accurately estimate panel output for any location.

Your postcode may affect tilt and orientation. But our experienced installers account for these factors.

DC & AC Cables

You also have to account for a slight loss when the panel system connects to the inverter. And again between the inverter and your house’s electricity switchboard.

Generally, these losses are around 1 to 2%. However, our smart solar systems don’t have this problem if you use a standard inverter.

Panel Temperature

Can you believe that temperature affects solar panels? It’s true. Hot panels work less efficiently.

It all comes down to the solar panel’s temperature coefficient. You see, panel temperature depends on 3 factors:

ambient temperature – depends on location

temperature coefficient – panel underperformance rate per degree increase in temperature

type of installation – rooftop installations have higher temperatures than surrounding ambient temperature

However, you can calculate just how much efficiency you may lose per panel brand. Installation types and location may vary as well. So it’s a good idea to make proper calculations before you invest in a brand.

Dirt & Chemical Residue

Dirt and residue may also play a part in reducing efficiency ratings. However, it’s difficult to tell exactly how much. The actual rating loss may vary from panel to panel.

You can factor in a 5% loss in efficiency to be on the safe side. But if you want to make sure you receive the highest rating possible, it’s a good idea to clean the panels regularly.

Fortunately, Mother Nature provides the wash for you. So cleaning them yourself is unnecessary.

Humidity & Corrosion

If you live in coastal or humid areas, you may see a dip in your efficiency rating. The salt content of sea air can settle onto your panels and reduce efficiency until the next time it rains.

Corrosion may be a worry, too. Fortunately, most solar panels are corrosion-resistant.

Solar modules also have an additional layer of protection. They’re vacuum-sealed between interior materials and the back sheet.

Clean your panes regularly to rid them of salt deposits. Or you can wait for the rain to clean it naturally.

If humidity is a factor, it may also affect your efficiency rating. Water vapour collecting on the panels may reflect sunlight away from the cells. Also, consistent humid weather may degrade the panels over time.

The good news is that the manufacturers are aware of this potential problem. They use edge sealants and low ionic conductive materials to help prevent deterioration.

Age of Panels

Panel deterioration can happen over time. But it happens very slowly with very little effect on efficiency. At least, that’s true for most decent to top-tier solar panels.

Most efficient solar panels have a warranty of 25 years. Solar panel efficiency always goes down over time.

Premium brands like LG may warrant that their panels still deliver 89.6% of the rated power after 25 years. But the rate drops to 80% for cheaper panels after the same time period.

However, lesser brands come with a host of problems. At the very least, they’ll break way before the 25-year period is up. Along with being incredibly inefficient, installing cheap solar systems may put you at risk of a fire.

Fortunately, most decent brands exceed their warranties. Like most electronics, you can expect a slight dip in efficiency over time. But the cost savings and return on investment make purchasing these brands a better value.

Wrapping Up

It’s tempting to buy a low-quality solar panel. But the cost savings aren’t worth the trouble of replacement and the potential fire risk.

A quality system, on the other hand, provides a better value. And it’s ultimately a safer buy for you and your family.

You do have to spend a little more at first. However, the ROI over time and premium components makes these solar systems the better investment.

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