Solar panel degradation per year is smaller than most people expect. NREL research on fielded systems has found a median loss of roughly 0.5% per year for crystalline silicon panels, and many newer panels are warranted to lose less. A panel that makes 400W today will still make most of that in 25 years. The real question is how degradation affects your long-term savings.
Solar Panel Degradation per Year: Typical Numbers
| Source or warranty type | Typical figure |
|---|---|
| NREL field study median (crystalline Si) | ~0.5%/year |
| Common standard panel warranty | ~0.5-0.7%/year after year 1 |
| Premium panel warranties | ~0.25-0.4%/year |
| First-year loss (light-induced) | Often 1-2% |
Warranty terms vary by model. Read the datasheet’s power warranty line.
What 25 Years Looks Like
At 0.5%/year, a 10 kW array making 14,000 kWh in year one makes about 12,400 kWh in year 25, roughly 88% of the start.
| Year | Output at 0.5%/yr |
|---|---|
| 1 | 100% |
| 10 | ~95.5% |
| 20 | ~91% |
| 25 | ~88.5% |
What Causes Degradation
- Light-induced degradation (LID) in the first months
- UV and heat breaking down materials
- Thermal cycling stressing solder joints
- Moisture getting past seals
- Potential-induced degradation (PID) in some high-voltage systems
- Microcracks from hail, foot traffic or poor handling
Hot climates typically see somewhat faster degradation.
Degradation vs Other Losses
Dirt, shading, inverter faults and failed connectors often cost far more than slow aging. If output drops suddenly, it’s not degradation. Check monitoring and call your installer.
Including It in Payback
Good savings estimates reduce production about 0.5% each year. If a quote shows flat production for 25 years, ask why.
How to Track It
Compare each year’s production with the same month in past years, adjusting for weather. Monitoring apps and PVWatts estimates help.
Why Some Panels Degrade Faster
Not every panel ages at the median rate. Manufacturing quality, cell technology and installation all play a part. Panels with poor encapsulants can yellow or delaminate. Cracked cells from rough handling or hail can create hot spots that speed up local damage. Systems in very hot, humid or coastal locations face more stress. Buying from a manufacturer with a solid track record and a clear power warranty is the best protection.
Degradation and Batteries
Home batteries lose capacity too, and usually faster than panels. Many battery warranties guarantee around 70% capacity after 10 years, while panel warranties often run 25 years or more. When modeling 25-year savings, plan for a possible battery replacement but not a panel replacement.
Worked Example: Comparing Degradation Rates Over 25 Years
For a 10 kW array making 14,000 kWh in year one, here’s how different yearly rates add up (simple compounding from year one):
| Yearly degradation | Output in year 10 | Output in year 25 | Total over 25 years |
|---|---|---|---|
| 0.25% | 97.8% | 94.2% | about 339,700 kWh |
| 0.5% | 95.6% | 88.7% | about 329,800 kWh |
| 0.7% | 93.9% | 84.5% | about 322,100 kWh |
The difference between a 0.25% and a 0.7% panel is about 17,600 kWh over 25 years. At $0.165/kWh (EIA’s 2024 U.S. average residential price), that’s worth about $2,900. That’s useful when comparing a premium panel’s price with a standard one.
How to Read a Panel’s Power Warranty
Panel datasheets usually state a power (performance) warranty like this (example format):
- “≥98% of rated power in year 1”
- “−0.5% per year from year 2 to year 25”
- “≥86% of rated power at year 25”
To check the math: 98% − (24 × 0.5%) = 86%. A 400 W panel with that warranty is guaranteed at least 344 W at year 25 under standard test conditions. Premium warranties may start higher and decline more slowly. See solar panel specs explained.
Step-by-Step: Checking Your System’s Degradation
- Export yearly production from your monitoring app.
- Get typical-year production from PVWatts for your system.
- Compare each year’s ratio: actual ÷ PVWatts. Weather varies by several percent from year to year, so look at the trend over several years.
- Look at per-panel data, if you have microinverters or optimizers. One panel far below the others points to shading, soiling or a fault, not normal aging.
- Compare with the warranty line. If output is well below the warranted level after accounting for weather and soiling, contact the installer about a warranty claim.
Degradation in Your Payback Math
Most good payback models include degradation. In a spreadsheet, production in year n is year-1 kWh × (1 − rate)^(n − 1). For a 9,800 kWh system at 0.5%, year-25 production is about 8,690 kWh. Our solar payback period guide includes the formula and a 25-year table. For the overall value case, see are solar panels worth it in 2026.
Sizing With Degradation in Mind
If you want the system to still cover your use in year 20, you can size a few percent larger:
- Needed in year 20: 10,500 kWh
- Output factor in year 20 at 0.5%: (0.995)^19 ≈ 0.909
- Year-1 production needed: 10,500 ÷ 0.909 ≈ 11,550 kWh
That’s about 10% more capacity than sizing for year one. Check your utility’s system size cap before oversizing. See how many solar panels do I need.
Degradation vs Soiling and Shade
| Loss | Typical behavior | Fix |
|---|---|---|
| Degradation | Slow, steady, about 0.5% a year | None needed; it’s in the warranty |
| Soiling | Builds up between rains | Rain or cleaning. See solar panel cleaning |
| New shade (tree growth) | Gradual, seasonal | Trim trees |
| Equipment issue | Sudden drop | Installer check |
PVWatts’ default 14% system loss already includes typical soiling, shading and wiring losses, but not degradation over time.
FAQ
How long do solar panels last?
Commonly 25-30+ years, with gradual output loss.
What does a 25-year power warranty mean?
That output stays above a set percentage (for example, 80-90%) of nameplate.
Can degraded panels be repaired?
Usually not; under warranty, they may be replaced.
What is a normal solar panel degradation rate?
NREL’s field research found a median of about 0.5% per year for crystalline silicon panels. Many current warranties guarantee 0.25% to 0.7% a year.
Do solar panels stop working after 25 years?
No. The 25-year figure is usually the warranty term. Panels typically keep producing afterward at somewhat reduced output.
Do hot climates cause faster degradation?
Research summarized by NREL generally finds somewhat higher degradation in hotter climates. Panel temperature coefficients and good airflow behind the panels help.
Does degradation affect my inverter or battery?
Panel degradation is separate. Inverters have their own warranties, and batteries lose capacity on their own schedule, usually faster than panels. See home battery warranties compared.
How do I know if my panels are degrading too fast?
Compare several years of production with PVWatts estimates, adjusting for weather. If output falls below the warranty’s guaranteed curve, contact your installer.
Sources: NREL Solar program and photovoltaic degradation rate research; NREL PVWatts documentation; EIA average residential price 2024. Accessed Oct 2026.
Related: CleanTite Solar Panel Cleaner Review, Solar Sheen Glass Solar Panel Cleaning
One reply on “Solar Panel Degradation: How Much Output You Lose per Year”
[…] Simple payback hides what happens after the system is paid off. Panels usually carry 25-year performance warranties, and output declines slowly over time. NREL research by Jordan and Kurtz found a median degradation rate of about 0.5% per year for crystalline silicon panels (see our solar panel degradation guide). […]