Solar Panel Degradation explained
Solar panel degradation refers to the slow, inevitable decline in panel output that occurs over years of operation. No panel maintains 100% of its original output forever — the good news is that high-quality panels degrade very slowly.
Industry data shows that most quality solar panels degrade at around 0.5% per year. Premium panels from manufacturers like Panasonic or SunPower can hold to as low as 0.25–0.3% per year, while cheaper panels may degrade at 0.7–1% per year.
What this means in practice:
- After 10 years: a 0.5%/year panel retains ~95% of its original output
- After 25 years: it retains ~88% of its original output
- After 25 years at 1%/year: it retains only ~78%
Manufacturers address this through linear performance warranties, which typically guarantee at least 80% of rated output after 25 years. First-year degradation is often higher (0.5–3%) due to light-induced degradation (LID), then stabilises for subsequent years.
When calculating your long-term savings and payback period, build in a degradation factor. A system that generates 4,000 kWh in year 1 will generate roughly 3,500 kWh by year 25 at typical degradation rates.