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How to Calculate and Determine Solar Panel Energy Efficiency and Maximum Output

When you’re considering solar power for your home, you’ll want the most bang for your buck. But which solar panels produce the most energy?

The answer depends on a number of factors, including the size of the panel, the efficiency at which the panel converts sunlight to electricity, the amount of sunlight the panel receives, the orientation of the panel relative to the sun, and a host of other variables.


The basic measure of solar panel energy output is calculated by testing the panels under average conditions, known as Standard Test Conditions (STC). The STC measure the solar panel’s energy output using common conditions of light exposure, orientation, and panel temperature. Under STC, a 250-watt panel produces 250 watts of electricity when the sunlight (or “solar irradiance”) on the panel is 1000 watts per square meter and the panel is operating at 25°C. All manufacturers must produce panels that meet or surpass their advertised wattage under STC.

Solar panel efficiency is another factor that affects how much energy a particular panel will produce. The efficiency of a panel refers to the ability of the panel to convert sunlight into usable energy. In a panel with 20 percent efficiency, for instance, 20 percent of all the light that hits it will be translated into electricity. A panel with a higher efficiency rating will convert more sunlight into energy. Most solar panels have efficiency ratings of around 15 to 18 percent.

To calculate the efficiency of your panel, just multiply the amount of sunlight that hits the earth’s surface in your area (known as the “incident radiation flux”) by the area of your panel (measured in square meters). Divide the maximum wattage on your panel by this number, then multiply it by 100 percent you’ll get an efficiency rating.

For instance, if 1,000 watts per square meter of sunlight hits your home (the amount of sunlight assumed during STC testing) and your panel is 2 square meters, you’ll end up with 2,000 watts. If your panel is advertised as producing 400 watts, you’ll end up with an efficiency rating of 20 percent (400 divided by 2000 is 0.2, and 0.2 times 100 percent equals 20 percent).

However, real world conditions are usually different from the STC, so a typical panel rarely produces its advertised maximum wattage. The temperature of your solar panel, for example, is rarely a constant 25°C (the temperature used to determine STC ratings). Most solar panels are 20°C hotter than the ambient temperature. In other words, if the temperature outside is 20°C, your solar panel’s temperature is probably around 40°C.

Temperature plays a role in efficiency

Two important figures you should pay attention to when determining how much energy you’ll really get out of your solar panel are the nominal operating cell temperature (NOCT) and the temperature coefficient of Pmax (also known as the maximum power temperature coefficient). The NOCT is the temperature that the panel reaches when subjected to 800W/m² of irradiance (the energy equivalent of moderate sun) at an ambient temperature of 20°C. The temperature coefficient of Pmax is the percentage of energy a solar panel loses for every degree Celsius that the panel exceeds the STC temperature of 25°C.

To determine the operating efficiency (as opposed to the ideal efficiency) of your solar panels, subtract the temperature of your solar panel from the STC temperature of 25°C, then multiply that figure by the temperature coefficient of Pmax. This calculation will yield a negative percentage, which you can then subtract from your initial efficiency rating.

For example, if the temperature of your solar panel is 40°C, you would subtract 25°C, yielding a temperature of 15°C. If the temperature coefficient of Pmax was -0.45 percent, you’d multiply that by 15°C to yield -6.75 percent. In other words, your solar panels would be 6.75 percent less effective in temperatures of 40°C than they would be at a temperature of 25°C.

Standard vs. Premium Panels

It’s important to consider efficiency ratings when placing your solar panels. Ideally, you’ll be able to get high-efficiency solar panels and place them in a location that gets a lot of sun. However, if you’re locating your panels in an area that gets a lot of sun, you could get away with installing panels that have only an average or relatively low efficiency rating, since they will get maximum exposure. If you’re installing panels in a location that doesn’t get a lot of sun, however, you’ll want to invest in panels that have a higher efficiency rating so that you maximize the amount of energy you get, especially if the roof space is constrained.
Another issue that affects your solar panel’s output is its degradation rate. Over time, solar panels produce less energy. The rate at which they decline in their ability to produce energy is known as the degradation rate.

Degradation, time, and output

Since every solar panel manufacturer produces their panels somewhat differently, every panel has a slightly different degradation rate. The National Renewable Energy Laboratory found in a 2012 study that solar panel output falls by an average of about 0.8 percent annually. In other words, after 1 year, your solar panel will produce 99.2 percent of the energy it did when it was new; after 10 years it will produce 92 percent of the energy it did when it was new; and so on. More expensive solar panels will likely have a far lower degradation. Some even boast degradation rates of closer to 0.3 percent.

The conditions under which you position your solar panel also affects energy output. The more light your panels receive, the more energy they will be able to produce. If your solar panels are placed in an area shaded by tall trees or other buildings, they will not produce energy to their full potential. Research suggests that shading of 20 to 30 percent can lead to a 30 to 40 percent reduction in power output. For the same reason, if your solar panels are dirty, dusty, or covered with snow, leaves, or other debris, they won’t produce as much energy as they will when they are clean.

One of the other major solar panel components that affects energy output is the inverter. The inverter converts DC electricity to AC electricity (the type you use at home). The efficiency of your inverter affects how much of this DC energy gets translated into AC electricity. So-called transformerless inverters are the most efficient variety. But new micro-inverters and power optimizers -which connect to multiple solar panels rather than to the entire array-maximize power on a per-panel basis, making them a better choice on larger multi-panel arrays.


Energy output is also dependent on how well matched panels are within a system. If panels of different voltages are connected in series, the whole array will use the panel with the lowest voltage, and overall system performance will decline.

There are a lot of factors to consider when determining exactly how much energy you’ll be able to milk from your solar panels. The best way to set yourself up for success is by buying from a manufacturer known for producing high-quality panels and positioning your panels in a way that maximizes their exposure to sunlight.

To find out more about your energy solar panel options, compare installers in our network right away. We take your individual situation into account, and we match you with a solar panel provider that helps you to meet your financial goals.


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