Solar panels lose a small percentage of their power output each year as the photovoltaic materials age. This gradual decline, called solar panel degradation, is normal and predictable. Understanding degradation rates helps you accurately model long-term production, evaluate warranty terms, and set realistic expectations for your system’s performance 20 years from now.

Key Takeaways

  • Most modern solar panels degrade at 0.3 to 0.5 percent per year.
  • Premium monocrystalline panels from top manufacturers degrade at 0.25 to 0.3 percent per year.
  • After 25 years, a typical panel retains 80 to 90 percent of its original output.
  • Panel warranties guarantee a minimum output level at a specific year, typically 80 to 92 percent at year 25.
  • Degradation is caused by UV exposure, thermal cycling, humidity, and mechanical stress.

What is Solar Panel Degradation?

Solar panel degradation refers to the slow reduction in electrical output that occurs as panels age. A brand-new 400W panel rated at full output today will produce slightly less next year, slightly less the year after, and so on over its 25 to 30 year service life. This isn’t a malfunction. It’s a natural consequence of the photovoltaic materials being exposed to UV radiation, heat cycles, humidity, and mechanical stress over time.

The degradation rate is typically expressed as a percentage per year. At 0.5 percent annual degradation, a panel that produces 100 percent of rated output in year one produces 99.5 percent in year two, 99 percent in year three, and so on. After 25 years at this rate, the panel retains 87.9 percent of original output. That’s still a capable panel with substantial power production remaining.

Typical Degradation Rates by Panel Type

Premium Monocrystalline Panels

High-efficiency monocrystalline panels from manufacturers like SunPower, Panasonic (HIT), REC, and Q CELLS degrade at approximately 0.25 to 0.35 percent per year. SunPower’s Maxeon series has documented degradation rates below 0.25 percent in long-term field studies, which is exceptional. At 0.3 percent annual degradation, a panel retains 93 percent of original output after 25 years.

Standard Monocrystalline Panels

The majority of residential solar panels installed today are standard monocrystalline, from manufacturers like Canadian Solar, Trina, Jinko, and Longi. These panels typically degrade at 0.4 to 0.5 percent per year. At 0.45 percent, a panel retains about 89 percent of output after 25 years. This is the realistic expectation for most residential installations.

Older Polycrystalline Panels

Polycrystalline panels, common in installations from 2010 to 2018 and now largely replaced by monocrystalline in the market, typically degrade at 0.5 to 0.7 percent per year. If you have an older polycrystalline system, expect output to have declined 10 to 18 percent from original ratings over a decade.

What Causes Solar Panel Degradation?

UV-Induced Degradation

UV radiation breaks down the encapsulant material that protects the silicon cells. Over years of UV exposure, the encapsulant can discolor (yellowing or browning), reducing light transmission to the cells. Modern encapsulants are significantly more UV-resistant than materials used 20 years ago, which is one reason newer panels degrade more slowly than older ones.

Thermal Cycling

Panels heat up during the day and cool at night. This daily thermal cycle stresses the solder joints, cell interconnects, and laminate materials. Over thousands of cycles, micro-cracks can form in cells and interconnects, gradually increasing electrical resistance and reducing output. Desert climates with large day-night temperature swings can experience higher thermal cycling stress than moderate climates.

Potential-Induced Degradation (PID)

PID occurs when voltage differences between cells and the panel frame cause ion migration through the encapsulant, degrading cell performance. High humidity and high system voltages accelerate PID. Most quality modern panels incorporate PID resistance testing and design features that minimize this effect.

Light-Induced Degradation (LID)

Standard boron-doped silicon cells experience a rapid initial degradation in the first hours and days of light exposure, typically 1 to 3 percent. This LID occurs once and then stabilizes. Premium panels using n-type silicon (SunPower Maxeon, REC Alpha, Panasonic HIT) essentially eliminate LID because they use different doping chemistry. If you’re comparing two similar panels, n-type silicon is the better long-term choice.

Understanding Panel Warranties and Degradation Guarantees

Modern solar panels come with two warranties. The product warranty (typically 10 to 15 years) covers manufacturing defects and catastrophic failures. The performance warranty (typically 25 to 30 years) guarantees that the panel will produce a minimum percentage of its rated output at specific milestones.

Performance warranty structures vary. A “linear” performance warranty guarantees a specific maximum annual degradation rate (e.g., no more than 0.5 percent per year) throughout the warranty period. This is more favorable than a stepped warranty (e.g., 90 percent at year 10, 80 percent at year 25) because it ensures consistent performance throughout the system’s life rather than just at the endpoints.

When comparing panels, check both the degradation rate guaranteed (lower is better) and the end-of-warranty minimum output (higher is better). A warranty guaranteeing 87.5 percent output at 25 years implies 0.5 percent annual degradation. A warranty guaranteeing 92 percent at 25 years implies about 0.32 percent annual degradation and delivers significantly more energy over the system’s life.

How Degradation Affects Your System’s Economics

Over a 25-year system life, the difference between 0.3 percent and 0.5 percent annual degradation is meaningful in cumulative energy production. A 10kW system producing 13,000 kWh in year one cumulatively produces about 12 percent more energy over 25 years at 0.3 percent degradation than at 0.5 percent degradation. At $0.15 per kWh, that difference is approximately $6,000 in additional value from the lower-degradation panel set.

This is why premium panels often justify their higher upfront cost. The extra price buys better long-term production, which translates to real dollars in avoided electricity bills over the system’s life.

Monitoring Degradation in Your System

Most solar monitoring systems don’t directly report degradation, but you can track it indirectly by comparing actual production to expected production over time. Keep your first-year production data (your installer should provide an annual production estimate). In year 5, 10, and 15, compare actual annual production to first-year production. Accounting for weather variation (solar irradiance varies year to year), production should be declining at the rate your panel’s degradation specification predicts. Faster-than-expected decline may indicate panel defects covered under your product warranty.

Case Study: Comparing Two Systems After 15 Years

Setup

Two neighbors installed identical 8kW solar systems in the same year. One installed premium monocrystalline panels with a guaranteed 0.3 percent annual degradation rate. The other installed standard budget monocrystalline panels with a 0.5 percent annual degradation rate. Both systems produced 11,000 kWh in year one.

Year 15 Results

The premium panel system produced approximately 95.6 percent of year-one output, about 10,516 kWh. The budget panel system produced approximately 92.9 percent of year-one output, about 10,219 kWh. The difference in year 15 alone: 297 kWh. Cumulated over 15 years, the premium system produced approximately 3,200 kWh more total energy. At $0.15 per kWh, that’s $480 of additional value from the degradation difference alone, with more to come in years 16 through 25.

Expert Insights From Our Solar Panel Installers About Degradation

One of our senior solar panel installers with over 14 years of experience shares this perspective: “Degradation is the sleeper issue in solar system comparisons. People focus on upfront cost per watt and sometimes miss the lifetime production picture. A panel that degrades 0.25 percent per year produces thousands more kilowatt-hours over 25 years than one degrading at 0.5 percent. When I’m helping someone choose between panels, I always run the 25-year production comparison. For most customers, paying an extra $500 to $1,000 upfront for premium low-degradation panels is one of the best investments in the system.”

Frequently Asked Questions

How much do solar panels degrade per year on average?

Most modern residential solar panels degrade at 0.3 to 0.5 percent per year. Premium monocrystalline panels from top manufacturers degrade at the lower end of this range (0.25 to 0.3 percent). Older panels installed before 2015 may degrade faster, at 0.5 to 0.7 percent per year.

How much output does a solar panel lose after 25 years?

At 0.5 percent annual degradation, a panel retains about 88 percent of original output after 25 years. At 0.3 percent, it retains about 93 percent. Panel warranties typically guarantee 80 to 92 percent of original output at year 25, depending on the manufacturer and warranty tier.

What is the difference between LID and PID?

Light-Induced Degradation (LID) is a one-time initial performance drop (1 to 3 percent) that occurs in the first days of operation due to light exposure reactions in standard boron-doped silicon cells. Potential-Induced Degradation (PID) is an ongoing degradation caused by voltage stress and humidity, which can be severe without PID-resistant design. Both are managed by premium panel designs but affect standard panels differently.

Do solar panels stop working after 25 years?

No. The 25-year warranty period is not a service life limit. Panels continue producing electricity beyond 25 years, typically retaining 80 to 92 percent of original output at that point and continuing to degrade slowly afterward. Many solar panels installed in the 1980s are still producing power today, decades past their warranty period.

Can I claim warranty if my panels degrade faster than guaranteed?

Yes. If your panels degrade faster than the warranty specifies, you have a warranty claim. Documenting actual production versus expected production over time is essential for pursuing such claims. Your installer should help you understand the claims process with your panel manufacturer.

Summing Up

Solar panel degradation is a normal and predictable part of owning a solar system. At typical rates of 0.3 to 0.5 percent per year, your system will still produce 85 to 90 percent of its original output after 25 years. Choosing panels with low guaranteed degradation rates and strong linear performance warranties is one of the best ways to maximize long-term value from your solar investment.

For help selecting the right panels for long-term performance in your climate, call (855) 427-0058 or request a free consultation online. Our installers can model 25-year production for the specific panels we recommend and compare them to alternatives.