Solar panel efficiency is a term often encountered when considering the installation of solar panels on rooftops. Contrary to popular belief, however, it is not a particularly crucial factor.

Solar panel companies tend to emphasize efficiency ratings as a means to enhance their credibility. However, this is largely a marketing tactic.

In reality, other performance metrics generally hold more significance than solar panel efficiency. Moreover, higher efficiency often translates to a higher price, which can burden homeowners without providing substantial additional benefits.

Definition of Solar Panel Efficiency

Solar panel efficiency is essentially a measure of how effectively a solar panel converts sunlight into usable electricity. For instance, a solar panel with a 15% efficiency rating indicates that 15% of the sunlight that reaches its surface will be converted into electricity.

Solar panel efficiency is influenced by various factors, including dust, dirt, snow, debris, shading, and the technology used in panel production.

How to Increase Efficiency

Modern residential solar panels commonly use monocrystalline solar cells due to their higher efficiency compared to other cell types. Some manufacturers employ PERC or HIT solar cells to further enhance efficiency by maximizing light absorption.

Half-cut cell technology is employed by certain panels to minimize resistance as electrons move through the cells, resulting in improved efficiency. Furthermore, the use of multi-busbar technology, involving ultra-thin wires, enables better electricity flow through the cells by reducing shading on each cell.

Opting for a white backsheet can also contribute to increased efficiency. A backsheet helps to reduce the temperature of solar cells.

How to Calculate Efficiency

Efficiency calculations are typically performed under Standard Test Conditions (STC), which may differ from actual operating conditions.

To estimate the efficiency of solar panels in a specific location, one can multiply the panel area by the solar irradiance level and divide the power rating of the panel by that value. The result, multiplied by 100, provides an estimated efficiency for the solar panel.

Solar Panel Efficiency and Installation Costs

As mentioned earlier, premium efficiency panels command a higher price compared to standard efficiency panels. According to, premium efficiency panels typically cost around $0.15 per watt more than standard efficiency panels.

Nevertheless, there is an emerging trend in the industry where Tier 1 Chinese manufacturers, like Trina Solar, are producing high-efficiency panels at significantly lower prices than brands like SunPower. It will be interesting to observe the impact of this development on the market.

Why Efficiency is Exaggerated

As previously mentioned, solar panel companies often highlight their efficiency ratings, which is understandable. Boasting a record-breaking efficiency rating is advantageous for a brand.

However, for most homeowners, having a high-efficiency panel doesn’t offer significant benefits. Efficiency is not the primary factor determining power output; wattage is.

The wattage (AKA power rating) determines the maximum power that solar panels can generate. For example, if you have two 350-watt panels, one with an 18% efficiency rating and the other with a 21% efficiency rating, both panels can only produce a maximum of 350 watts of power.

Given this scenario, opting for the 18% efficiency panel is more cost-effective.


If you have limited roof space available for solar installation, it’s recommended to choose panels with higher efficiency ratings. Although they may be more expensive, they will effectively fulfill the required solar energy generation to cover your electricity consumption.

The Factors That Really Matter

So if efficiency ratings are not the main focus, what factors should be considered? As previously mentioned, wattage is key. The higher the wattage of a solar panel, the fewer panels that you will need to achieve the desired system size.

Attention should also be given to the panel warranties, particularly the performance warranty. This warranty indicates the panel’s ability to produce power as it ages. Ideally, a panel with a 25-year linear performance warranty should have a degradation rate of no more than 2% in the first year and no more than 0.5% for the remaining warranty period.

Two other important factors are power tolerance and temperature coefficient ratings. These specifications provide insights into the panel’s performance under real-world conditions. Look for power tolerance ratings around -0/+5% and temperature coefficient ratings between -0.3% and -0.5% per degree Celsius.