All solar panels lose efficiency over time. It's unavoidable physics — the silicon cells that convert sunlight into electricity slowly degrade with exposure to UV radiation, thermal cycling, and moisture infiltration. But the rate of degradation varies enormously depending on panel quality, installation conditions, and climate.

Understanding what's normal versus what's a sign of trouble is essential for any solar owner who wants to protect their investment.

What's a normal degradation rate?

The most widely cited research on solar panel degradation comes from the National Renewable Energy Laboratory (NREL). A landmark meta-study by Jordan and Kurtz analysed data from over 2,000 degradation rates reported in the literature and found that the median degradation rate for crystalline silicon panels is roughly 0.5% per year.

In practical terms, this means:

After 5 years: your system should produce roughly 97–98% of its original output
After 10 years: roughly 92–95% of original capacity
After 20 years: roughly 84–90% of original capacity
After 25 years (typical warranty period): roughly 80–88%

Most panel manufacturers guarantee at least 80% of rated power output after 25 years, which aligns with a degradation rate of about 0.7–0.8% per year.

What causes panels to degrade?

Several mechanisms contribute to the gradual loss of efficiency:

Light-induced degradation (LID)

In the first few hours of sun exposure, most crystalline silicon panels experience a small initial drop in efficiency — typically 1–3%. This is caused by boron-oxygen defects in the silicon and is generally a one-time event that's already accounted for in panel ratings.

UV exposure

Prolonged UV exposure causes chemical changes in the panel's encapsulant material (the transparent layer protecting the cells). Over years, this can cause yellowing or browning that reduces light transmission to the cells.

Thermal cycling

Daily heating and cooling cycles create mechanical stress in the panel structure. Over thousands of cycles, this can cause micro-cracks in the silicon cells, delamination of the encapsulant, and degradation of solder joints. This is more severe in climates with large day-to-night temperature swings.

Moisture ingress

Despite being sealed, panels can gradually absorb moisture through the back sheet or frame seals. Moisture accelerates corrosion of cell interconnects and can cause potential-induced degradation (PID), which can be severe in high-humidity environments.

Hot spots

When individual cells are damaged, shaded, or mismatched, they can become reverse-biased and overheat. These hotspots accelerate local degradation and can cause permanent damage to the affected area. They're a leading cause of above-normal degradation rates.

When should you be concerned?

Normal degradation is gradual and predictable. What you should watch for are signs of accelerated degradation — a decline steeper than the expected 0.5–0.8% per year.

Warning signs include:

Sudden drops in production (not explained by weather or shading changes)
Production declining faster than 1% per year compared to year-one output
Visible damage — browning, bubbling, or cracked glass on panel surfaces
Inverter error codes or unexplained system shutdowns
One string producing significantly less than others in the same array

If you're seeing any of these signs, the issue is likely not normal degradation but an active fault — hotspots, wiring problems, inverter failure, or shading issues.

Climate matters more than most people think

Panels in hot, arid climates like Arizona or Nevada experience degradation rates roughly 20–30% higher than panels in temperate climates like the Pacific Northwest. This is because:

Higher operating temperatures reduce cell efficiency and accelerate thermal stress
Greater UV exposure degrades encapsulant materials faster
Dust and soiling are more severe, causing both temporary and permanent losses
Thermal cycling is more extreme in desert climates

Conversely, panels in cold climates actually benefit from lower operating temperatures (silicon is more efficient when cold), though they face challenges from snow cover and shorter daylight hours.

What can you do about it?

While you can't stop degradation entirely, you can minimise its impact:

Monitor your system — Track annual production and compare year-over-year. Most inverters and monitoring systems make this data available.
Keep panels clean — In dusty or high-pollen areas, periodic cleaning can prevent soiling from becoming a permanent issue. Accumulated debris can cause localised hotspots.
Trim vegetation — New tree growth can introduce shading that wasn't present when the system was installed. Even partial shading on one panel can significantly reduce output from an entire string.
Check your inverter — Inverters typically have shorter lifespans (10–15 years) than panels (25+ years). Inverter efficiency loss often looks like panel degradation.
Consider thermal inspection — For systems over 7–10 years old, a professional thermal inspection using infrared cameras can identify hotspots and cell damage that are invisible to the eye.

The bottom line

Some degradation is normal and expected. The question isn't whether your panels are degrading — it's whether they're degrading faster than they should be. If the answer is yes, early diagnosis can save you significant energy and money over the remaining life of your system.

Use PanelAudit's Solar Loss Checker to estimate your system's likely performance loss based on age, location, and equipment — and find out whether further investigation is warranted.

Why Solar Panels Lose Efficiency Over Time