If your solar panels are generating less electricity than expected, the problem is rarely the panels themselves—panels are robust and reliable. More often, underperformance stems from shading changes, soiling, wiring issues, inverter problems, or factors in the system design and installation. Identifying the root cause quickly can restore lost output and protect your system’s warranty.

Expected performance varies by season, weather, and location, so before concluding your system underperforms, compare actual output to industry benchmarks for your climate zone. A correctly sized system in Arizona might produce 1,400 kWh per kW annually, while an identical system in the Pacific Northwest might produce 900 kWh per kW. Understanding the factors that affect real-world output will help you determine whether your system is truly underperforming or simply operating as designed.

Establishing a Performance Baseline

To assess whether your system underperforms, you need a baseline—the expected annual output under ideal conditions. This baseline is calculated during system design using tools like PVWatts or Aurora Solar, which account for your location’s solar resource, roof tilt, orientation, and typical shading. Your installer should have provided this estimate in your contract or proposal.

Real-world output is always 10-25% lower than the theoretical peak due to temperature losses, wiring losses, inverter inefficiency, and soiling. A system predicted to produce 8,000 kWh annually might generate 6,500-7,200 kWh realistically. The difference between your estimated annual production and actual output (as a percentage) is called the “performance ratio.” Ratios of 80%+ are normal; below 75% indicates a problem.

Month-to-Month and Year-to-Year Comparisons

The most reliable performance metric is comparing the same month across years. June 2024 to June 2025, or July 2023 to July 2024. This controls for seasonal variation and weather patterns. Typical annual system degradation is 0.3-0.8%, so you should see roughly 0.3% less output each year. If your June production declined by 10% year-over-year with similar weather, that’s a red flag.

Use a public weather station’s historical data (available from your local National Weather Service office) to adjust for actual sunshine hours. If June 2024 had 5% fewer sunny days than June 2025, expect similar production declines. If production dropped more than weather explains, investigate system faults. Modern monitoring systems make this analysis easy—most apps show side-by-side comparisons of production across months and years.

Seasonal Variability and Climate Expectations

Seasonal differences are dramatic. Winter generates 30-50% less than summer in most US climates due to lower solar angle and shorter days. This is normal and expected. A system producing 500 kWh in December and 800 kWh in January is not underperforming—it’s responding to natural seasonal variation. Compare December-to-December, not December-to-June.

Regional differences are equally important. Phoenix receives 2,700+ peak sun hours annually (high desert with clear skies), while Seattle receives 1,500+ hours (Pacific maritime with frequent clouds). A system in Arizona will produce nearly twice as much annual energy as an identical system in Seattle. Before concluding your system underperforms, research your specific location’s solar resource on the National Renewable Energy Laboratory (NREL) Solar Maps or PVWatts database.

solar panels on roof

Shading: The Hidden Performance Killer

New shading from tree growth, neighboring buildings, or vegetation can silently reduce output by 20-50%. A tree that was 15 feet tall when your system was installed may reach 30 feet within 5 years, extending its shadow across your roof during morning or afternoon hours. Similarly, a neighbor’s new home or addition can cast shade you never anticipated.

Inspect your roof and surroundings monthly, noting any vegetation growth, construction, or obstructions. Use Google Earth’s historical imagery (go to “clock” icon, drag the timeline) to compare your roof’s surroundings year-by-year. If shadows have encroached, discuss shade remediation with your installer—options include trimming vegetation (if permitted), repositioning panels, or installing microinverters to mitigate (not eliminate) shade impact.

Soiling and Dust Buildup Losses

Dust, pollen, bird droppings, and dirt reduce light penetration to panels. In clean, wet climates, soiling losses are minimal (1-2% annually). In arid or agricultural regions, or near coastal salt spray, soiling losses can reach 3-7% annually. A visual inspection of your panels’ surface will reveal heavy soiling—a dusty white layer, streaks, or bird droppings are obvious signs.

Professional panel cleaning costs $150-300 for a residential system and can recover 3-7% of lost output if heavy soiling is present. In most regions, annual cleaning is sufficient. In desert or agricultural zones, quarterly cleaning pays for itself through recovered output. After cleaning, monitor whether output increases by 3-5%—if not, soiling wasn’t the issue.

Inverter Aging and Efficiency Decline

Inverters gradually lose efficiency as they age, typically declining 0.1-0.2% per year after year 5. A 10-year-old string inverter might operate at 95-96% efficiency compared to 97-98% when new—a small but measurable loss. This is normal wear. However, inverters can fail suddenly due to component stress, thermal cycling, or manufacturing defects.

If your monitoring data shows gradual, steady decline at 0.5-1% per year, aging inverter efficiency may be responsible. If output suddenly dropped 15-20%, inverter fault is more likely. Check the inverter display for error codes—even if performance seems normal, a lingering code indicates something is amiss. Request a professional service call if codes persist.

Wiring Losses and Connection Degradation

Over time, wiring connections corrode, connections loosen, and solder joints weaken. These create resistance, which generates heat and reduces power transmission efficiency. A corroded junction box connection might introduce 0.5-2% losses. Multiple loose connections across the system can compound to 3-5% total losses.

Visible signs include brown or white crusty deposits on junction boxes (corrosion), discolored wires, or scorch marks around connectors. A qualified electrician should inspect all junction boxes, combiner boxes, and breaker connections annually or every other year, especially in humid climates or near coastal salt spray. Re-seating or replacing corroded connectors typically costs $500-1,500 and restores output immediately.

Temperature Derating and Panel Efficiency

Solar panels are rated under Standard Test Conditions (STC): 1,000 watts of solar irradiance, 25°C (77°F) cell temperature, and air mass 1.5. Real-world conditions are almost never ideal. On a hot summer roof, panels reach 60-70°C, which reduces output by 20-30% compared to STC rating. This is normal and unavoidable—it’s not underperformance, it’s physics.

Account for temperature derating when evaluating performance. A 7 kW system rated at 7,000 watts under STC will produce closer to 5,000-5,500 watts on an average summer afternoon due to panel heating. PVWatts and Aurora Solar account for this in their estimates, so your expected production already reflects temperature losses. If actual output matches the prediction despite hot summers, your system is performing as designed.

DC-to-AC Conversion Losses

Converting direct current (DC) from panels to alternating current (AC) for home use incurs efficiency losses. Modern inverters are 97-98% efficient, meaning 2-3% of DC power is lost in conversion. Older inverters (over 15 years) might be 95-96% efficient, losing 4-5%. These losses are normal and included in system design estimates.

However, if your inverter is oversized relative to panel output, efficiency may drop further. An 8 kW inverter paired with a 5 kW panel array operates well below its rated capacity at typical output levels, reducing efficiency. Installers should match inverter capacity to expected system output, typically keeping the inverter size within 1.0-1.25 times the DC capacity. If you suspect oversizing, compare your rated system size to inverter capacity—they should be within 20-25%.

Array Mismatch and Unequal Panel Performance

If panels in your array have different model numbers, ages, or efficiencies, they won’t all produce identical power. Mismatched panels string together and the lowest-output panel limits the entire string’s power (“weak link” effect). This can happen if your installer mixed brands, included salvaged panels, or if some panels have degraded more than others.

Request a detailed IV curve test from your installer to measure output panel-by-panel. This test reveals whether all panels are contributing equally or whether one or more are underperforming. If mismatches are found and panels are within warranty, contact the manufacturer for replacement. Mismatched panels rarely affect output by more than 3-5% unless severely degraded.

house with solar panels

System Design Flaws and Installation Errors

Some underperformance originates in system design. Poor azimuth angle (east-west orientation), suboptimal tilt angle, or undersizing relative to home energy use can result in systems that underdeliver from day one. If your system has always generated less than promised, design faults are likely.

Review your original proposal and system design document. Compare the estimated annual output to what you’re actually observing. If actual production is 15-25% below estimate (accounting for weather variation), contact your installer. Most installers warranty design estimates—if a system is undersized, the installer may be liable for shortfall or expansion costs. If estimates are missing, request a detailed PVWatts analysis from your installer to identify design issues.

Bypass Diode Failure and Cell Degradation

Modern solar panels contain bypass diodes that protect cells from damage if one cell is shaded or fails. Bypass diode failure is rare but can reduce a panel’s output to zero while the rest of the array operates normally. Cell degradation from manufacturing defects, light-induced degradation (LID), or microfractures can reduce individual panel output by 10-30%.

These failures are covered under manufacturer warranty (usually 25-30 years). If IV curve testing identifies a bad panel, the manufacturer will replace it at no cost if it’s within warranty period. Timely diagnosis and warranty claims are essential—don’t wait years to document the problem, as warranty timelines can be strict.

Frequently Asked Questions

What percentage of output loss is normal for solar panels annually?

Modern solar panels degrade at 0.3-0.8% annually, with fastest decline in year one (0.8-1%) and leveling off to 0.5% per year thereafter. After 25 years, a panel retains approximately 80-85% of original capacity. This degradation is built into manufacturer warranties, which guarantee 80-90% output at year 25.

How much does soiling reduce solar panel output?

Soiling (dust, pollen, bird droppings) reduces output by 1-2% in wet climates with regular rainfall and 3-7% in arid, agricultural, or coastal regions. Heavy soiling (visible white dust layer or streaks) can reduce output by up to 15%. Professional cleaning costs $150-300 and typically recovers 3-7% of lost output if soiling is heavy.

Can a single shaded panel reduce an entire system’s output?

Yes, significantly. In a traditional string inverter system, panels are wired in series, and the lowest-output panel limits the entire string. If one panel is 50% shaded, the entire string’s output drops by nearly 50%. This is why microinverters or power optimizers are recommended for partially shaded locations—they mitigate (but don’t eliminate) the shade impact.

How do I know if my inverter is failing?

Check the inverter display for error codes, which indicate faults requiring repair. Listen for unusual fan noise, clicking, or humming. Monitor for gradual 0.5-1% annual efficiency decline, which is normal wear, versus sudden 10-15% output drops, which suggest faults. If the inverter frequently shuts down during sunny weather, contact your installer immediately.

What is light-induced degradation (LID)?

LID is a decline in panel output (typically 2-5%) that occurs in the first few hours of operation due to boron-oxygen defects in older silicon solar cells. Modern PERC and N-type panels have largely eliminated LID through improved materials. If your system is less than 2 years old and shows unexpected output decline, LID may be responsible, though it’s rare today.

Should I use a multimeter to test my solar panels?

A basic multimeter can measure DC voltage at junction boxes to confirm panels are generating current. Readings should be 300-600V DC in sunlight depending on the number of panels in series. However, proper diagnostic testing requires an IV curve tracer ($2,000-5,000 instrument), which measures current-voltage curves to diagnose panel-level problems. A multimeter test is helpful first-step diagnostics; full IV testing requires professional equipment.

Summing Up

Apparent underperformance often stems from unrealistic expectations rather than actual system faults. Season-to-season variation, weather changes, and normal panel degradation explain most differences from theoretical output. However, genuine problems—new shading, soiling, wiring faults, inverter aging, or design flaws—can reduce output by 10-30%. Comparing same-month production year-over-year using normalized weather data will reveal whether your system truly underperforms.

If your system is generating 10-15% less than your installer’s estimate, especially if this underperformance has persisted since installation, request a professional performance audit. This typically includes IV curve testing, thermal imaging, and detailed production analysis. If faults are found under warranty, manufacturers and installers are obligated to remedy them at no cost. Addressing underperformance promptly maximizes your system’s financial return and ensures reliable operation for decades.

For a free solar performance assessment or to discuss upgrading an underperforming system, call Solar Panels Network USA at (855) 427-0058 or visit https://us.solarpanelsnetwork.com/. Our solar experts can diagnose system issues and recommend solutions. The 30% federal Investment Tax Credit is active through 2032, making system upgrades more affordable than ever.

Updated