Understanding Solar Panel Performance Metrics

Solar energy is a rapidly growing industry, and with the increasing number of solar installations, it’s important for people to understand how solar panels work. Metrics like efficiency, power output, temperature coefficient, performance ratio, energy payback time (EPBT), and degradation rate are essential for evaluating the overall output and performance of a solar panel system.

In this post, we’ll explain what photovoltaic (PV) solar panels are, how they work and how to understand solar panel performance metrics so you can choose the best option for your home or business.

What is a Photovoltaic (PV) Solar Panel?

Before we get into the performance metrics of solar panels, it’s helpful to understand what photovoltaic (PV) solar panels are and how they work.

PV solar panels are devices that convert sunlight directly into electricity. They’re made up of many solar cells, which are composed of two layers of semiconductor material. When sunlight hits these cells, it excites the electrons, causing them to move and create an electric current (a process known as the photovoltaic effect).

To generate a higher power output from the PV cells, they’re connected together to form larger units called panels or modules, which can be used individually or several can be connected to form solar arrays. One or more arrays are then connected to the electrical grid during the installation process as part of a complete PV solar system. This modular structure allows PV systems to be designed and built to meet nearly any electric power need for homes, businesses, and large buildings or structures.

PV modules and arrays are just one part of the entire system, however. They also include various supporting elements that work together to generate electricity and power your home, like the mounting structure. These are designed to securely hold your solar panels in place to optimize their exposure to sunlight. By positioning the panels at the correct angle and orientation, the mounting structures ensure maximum solar energy absorption throughout the day.

In addition to the panels and mounting structures, solar systems consist of essential components that facilitate the conversion of electricity. The direct-current (DC) electricity generated by the PV modules is transformed into alternating-current (AC) electricity to power the appliances and devices in your home. This conversion process is made possible by devices like inverters, which efficiently convert the DC electricity into a usable form to power your home.

By integrating PV modules, mounting structures, and the necessary conversion components, a solar system becomes a fully functional energy solution. It harnesses the sun’s energy and converts it into clean, renewable electricity to power your home, reduce your reliance on traditional grid electricity and lower your carbon footprint.

Now that we have a good understanding of PV solar panels, let’s talk about the performance metrics that let us know how efficient and effective solar panels are.

Solar Panel Efficiency

Efficiency is one of the most important factors to consider when you’re shopping for solar panels. The higher the efficiency of a PV panel, the more power that panel can produce.

Solar panel efficiency is a measure of how much sunlight a panel can convert into usable electricity, which is important when you consider the rising electric costs in California. The most efficient solar panels available today have efficiencies above 20%, compared to the previous average of less than 15%.

Efficiency is based on the efficiency of the solar cells, which depends on the cells’ composition, electrical configuration, surrounding components, and more. High-efficiency solar panels can exceed 22% efficiency, while low-efficiency solar panels can be below 15% efficiency.

Power Output

The power output of a solar panel is the amount of DC (direct current) power (or electricity) it can produce under standard test conditions. It’s also one of the key factors that help determine the number of panels you’ll need to install on your roof.

Your solar panel’s power output is measured in watts (W) and is calculated by multiplying volts x amps, where voltage is the amount of force or pressure behind the electricity and amperes (amps) refers to how fast it flows. Most solar panels on the market produce between 250 and 400 watts of power. Pricing for solar panels is typically measured in dollars per watt ($/W), and the total number of watts your system produces will have a significant impact on overall costs.

For example, California homeowners who get 6 hours of direct sunlight everyday would calculate your solar panel output like this: 5 hours x 290 watts (example wattage of a premium solar panel) = 1,450 watts-hours, or about 1.5 kilowatt-hours (kWh). Based on this example, your output for each solar panel would be roughly 500-550 kWh per year.

Temperature Coefficient

The output of a solar panel is directly related to the temperature it operates in. The temperature coefficient is a measure of how much the panel’s power output decreases for each degree above 25°C (77°F). Solar panels, like any electronic device, perform best at cooler temperatures so as the temperature rises, the panel’s efficiency and power output decrease.

As a result, the smaller a solar panel’s temperature coefficient, the more efficiently it will produce electricity in hot weather. If you live in a hot climate, as many homeowners in California do, a low temperature coefficient is an important factor that will maximize your solar system’s efficiency.

Degradation Rate

Over time, a solar panel’s ability to convert sunlight into electricity decreases, which is known as degradation. The degradation rate is the percentage of power output that a solar panel loses each year. On average, solar panels degrade at a rate of about 0.5% per year.

Solar panels typically experience a gradual decrease in performance over time due to various factors such as aging, environmental conditions, and material degradation. The degradation rate measures the percentage of power output reduction per year. It provides an estimate of how much the panel’s performance will decline over its operational lifetime.

Tilt and Orientation

While it’s not a performance metric, the direction your roof faces will have a major impact on how much sunlight your solar panels are exposed to throughout the day. As a result, the angle and orientation of your solar panels directly impacts their output.

The tilt angle refers to the way in which a panel is positioned with respect to the horizontal plane, while orientation refers to its direction relative to the sun. To maximize how much solar energy is captured, panels should be tilted and oriented to take advantage of geographical location and seasonal variations.

For homeowners in the Northern Hemisphere, the best direction to face solar panels is south. All of our customers in sunny California who want the most efficiency from their solar panel system should avoid installing your panels facing North.

Solar Tip: Not sure which direction your roof faces? Look up your address on Google Maps. The grid will show you which direction is true south so you can compare your rooftop’s direction to the satellite image.


Solar panel performance metrics are essential tools for evaluating the overall effectiveness and sustainability of solar panels. By understanding these metrics, you’ll be able to make an informed decision about which solar panels are best to install on your roof.

Our Bay Area team has a great understanding of utility rates throughout California and experience in designing and installing the right size of home solar system to meet your family’s growing needs. Schedule an online appointment today to learn more.

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