Solar panels form the core of a solar power plant.

Hence, the performance degradation rates of the installed panels are good, probably the best indicators of its quality. Your financial returns pretty much depend on the output from the panels. You might want to carefully evaluate the actual degradation rates observed in the panels and compare it with industry benchmarks to ensure a sound investment.

What causes performance degradation in solar panels?

The performance of a PV module will decrease over time. The degradation rate is typically higher in the first year upon initial exposure to light and then stabilizes. Factors affecting the degree of degradation include the quality of materials used in manufacture, the manufacturing process, the quality of assembly and packaging of the cells into the module, as well as maintenance levels employed at the site. Regular maintenance and cleaning regimes may reduce degradation rates but the main impact is specific to the characteristics of the module being used. It is, therefore, important that reputable module manufacturers are chosen and power warranties are carefully reviewed.

What could be the actual degradation rates in solar panels?

The solar industry standard is a conservative estimate of 3% in the first year, and less than 1% per year after that. However, The National Renewable Energy Laboratory (NREL) performed a meta-analysis of studies that examined the long term degradation rates of various PV panels. They found that the 1% per year rule was somewhat pessimistic for panels made prior to the year 2000, and today’s panels, with better technology and improved manufacturing techniques, have even more stamina than their predecessors.

With regard to actual degradation rates in panels, keep the following things in mind:

  • Use the solar panel’s warranty to compare output loss over time because that is the only output you are guaranteed.

 Module manufacturers, especially the high-quality ones, currently offer a linear performance warranty for the panels.

Now, what could be the significance of linear warranties?

Under linear performance guarantee, usually a maximum degradation of 2.5% is guaranteed in the first year, and some value in the range of 0.5–0.7%/y thereafter.

Most players in the panel market are otherwise capable of offering the standard performance warranty wherein they will usually guarantee a minimum performance for crystalline silicon panels as follows: 90% of the rated output for around first half of 25 years, and 80% of the rated output for the remaining of the 25 years.

Compare the degradation rates exhibited by the panels after its installation with the guaranteed performance promised by the supplier. This can be done based on the generation reports from the solar plant. 

  • Realistically expect less than a 3% decrease in output after the first year and about .5% decrease per year after that for most panels.

 Though manufacturer’s claim degradation rates of up to 10% for the first year under a standard warranty, most panels won’t necessarily degrade this much. There are panels that are known to out-perform their warranty-specified power outputs. So, while evaluating solar panels, the actual degradation rates exhibited should be very minimal.

Before you invest in an operational solar power plant, make sure you include the evaluation of solar panel degradation data review as a key component in your checklist.

You might want to check out these questions on Solar Power Plant Evaluation-Components:

  • How well have the components been chosen?- Here
  •  Presence of local service support from component manufacturers?- Here
  • How good are the inverters?- Here
  • What types of monitoring solutions are employed by the power plant?- Here
  • What kind of trackers is employed?How do you ensure its quality?- Here
  • Are the components suppliers in business?- Here
  • What are the warranty clauses attached to key components?-Here
  • Can you retrofit additional components to an existing power plant to increase generation? – Here