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Solar Panel Degradation Rate: How Much Power You Lose Each Year

Degradation rate is the annual percentage decline in a solar panel's power output over its lifetime. All solar panels lose performance over time due to physical and chemical changes in the cells and encapsulant. Modern mono-PERC panels degrade at about 0.5% per year, HJT and TOPCon at 0.3-0.4% per year, and older polycrystalline panels at 0.7-1.0% per year.

How degradation works

Solar panel degradation is not a single process but a combination of mechanisms that reduce power output gradually over decades. The most significant are:

Light-Induced Degradation (LID). When p-type silicon cells (used in PERC panels) are first exposed to sunlight, boron atoms in the silicon bond with oxygen impurities to form defects that trap charge carriers. This causes a one-time power drop of 1-3% during the first hours to days of operation. N-type cells used in TOPCon and HJT panels use phosphorus doping instead of boron, making them largely immune to LID with Year 1 losses under 1%.

Encapsulant degradation. The EVA (ethylene-vinyl acetate) layer that protects the cells slowly yellows under UV exposure, reducing the light reaching the cells. POE (polyolefin elastomer) encapsulants used in newer panels are more UV-stable.

Potential-Induced Degradation (PID). High system voltages can drive sodium ions from the glass into the cell surface, creating shunt paths that reduce power. Anti-PID cell treatments and proper grounding largely prevent this in modern panels.

Mechanical fatigue. Daily thermal cycling expands and contracts the cell interconnects, eventually causing microcracks that increase series resistance.

Degradation rates by technology

Cell TechnologyYear 1 Loss (LID)Annual Degradation (Year 2+)Output at Year 25Output at Year 30
Polycrystalline (p-type)2-3%0.7-1.0%74-82%70-78%
Mono-PERC (p-type)1-2%0.40-0.55%85-89%83-87%
TOPCon (n-type)0.5-1%0.30-0.40%90-92%88-91%
HJT (n-type)0.5-1%0.30-0.40%90-92%88-91%
Thin-film CdTe1-3%0.50-0.70%82-87%79-84%

These values come from NREL's meta-analysis of over 11,000 degradation rates measured across field installations worldwide. The median degradation rate for crystalline silicon panels manufactured after 2010 is 0.5% per year.

Calculating long-term output

The standard formula accounts for a larger first-year loss followed by steady annual degradation:

Output at Year N = Rated Power x (1 - Year 1 loss) x (1 - annual rate)^(N-1)

For a 400W mono-PERC panel with 2% Year 1 LID and 0.5%/year annual degradation:

  • Year 1: 400 x 0.98 = 392W
  • Year 10: 400 x 0.98 x 0.995^9 = 374.7W (93.7% of original)
  • Year 25: 400 x 0.98 x 0.995^24 = 347.5W (86.9% of original)
  • Year 30: 400 x 0.98 x 0.995^29 = 338.9W (84.7% of original)

For a 430W HJT panel with 1% Year 1 loss and 0.35%/year:

  • Year 1: 430 x 0.99 = 425.7W
  • Year 10: 430 x 0.99 x 0.9965^9 = 412.3W (95.9% of original)
  • Year 25: 430 x 0.99 x 0.9965^24 = 391.0W (90.9% of original)
  • Year 30: 430 x 0.99 x 0.9965^29 = 384.2W (89.3% of original)

What warranty guarantees mean

Modern panel warranties use a two-tier degradation guarantee:

Warranty TierStandard PanelsPremium Panels
Year 1 maximum loss2.0-2.5%1.0-1.5%
Annual loss (Year 2+)0.50-0.55%/year0.35-0.45%/year
Year 25 guarantee80.0-84.8%86.0-88.0%
Year 30 guaranteeN/A or 77.5%84.0-87.4%

The 30-year warranty trend is accelerating. LONGi, Canadian Solar, Jinko, and several other manufacturers now offer 30-year performance guarantees on their n-type panels, reflecting the lower degradation of TOPCon and HJT technology.

A warranty claim requires proving your panel output has fallen below the guaranteed level. This typically requires a professional I-V curve trace measurement under controlled conditions, not just monitoring system output, which can be affected by soiling, shading changes, or inverter issues.

Climate impact on degradation

Not all panels degrade at the same rate everywhere. An NREL study found that panels in hot, humid climates (Florida, Gulf Coast, Southeast Asia) degrade 20-50% faster than the same panels in cool, dry climates (Colorado, northern Europe). The primary accelerating factors are higher average cell temperatures and moisture ingress through the backsheet. Glass-glass panels resist moisture-driven degradation better than glass-backsheet panels, making them a better choice for humid climates.

Related terms

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Frequently Asked Questions

How much power does a solar panel lose per year?
Modern monocrystalline PERC panels lose about 0.5% of their rated power per year after the first year. HJT and TOPCon panels degrade slower at 0.3-0.4% per year. Older polycrystalline panels lose 0.7-1.0% per year. After 25 years, a mono-PERC panel retains about 87% of its original output.
What is Year 1 degradation or LID?
Light-Induced Degradation (LID) occurs during the first hours to weeks of sun exposure. Boron-oxygen defects in p-type silicon cells cause a one-time power drop of 1-3%. N-type cells (TOPCon and HJT) are largely immune to LID because they use phosphorus doping instead of boron, resulting in Year 1 losses under 1%.
What does a solar panel warranty guarantee for degradation?
Most warranties guarantee at least 80% of rated power after 25 years. Premium panels guarantee 84-87.4% after 25 years, or even 87.4% after 30 years. The two-tier warranty is common: no more than 2% loss in Year 1 (covering LID), then no more than 0.5-0.55% per year for the remaining 24 years.
Do solar panels stop working after 25 years?
No. The 25-year warranty period is not a lifespan limit. Panels continue producing electricity well beyond 25 years, just at reduced output. Studies of panels installed in the 1980s and 1990s show many still operating at 75-80% of original capacity after 35-40 years. The panel does not suddenly fail at year 25.
What causes solar panel degradation?
The main mechanisms are LID (boron-oxygen defects in Year 1), UV degradation of the encapsulant (EVA yellowing), potential-induced degradation (PID from voltage stress), thermal cycling that cracks cell interconnects, and moisture ingress through the backsheet. Hot, humid climates accelerate all mechanisms except LID.
Does climate affect degradation rate?
Yes, significantly. Panels in hot, humid climates like Florida or Southeast Asia degrade 20-50% faster than panels in cool, dry climates like Colorado or Germany. High temperatures accelerate encapsulant yellowing and PID, while humidity promotes moisture ingress. Desert climates with extreme heat but low humidity fall in between.
How do I calculate my panel output after a certain number of years?
Use this formula: Output at Year N = Rated Power x (1 - Year 1 loss) x (1 - annual rate)^(N-1). For a 400W mono-PERC panel with 2% Year 1 loss and 0.5%/year thereafter: Year 25 output = 400 x 0.98 x 0.995^24 = 400 x 0.98 x 0.887 = 347.5W, or 86.9% of original.

Sources

Marko Visic
Physicist and solar energy enthusiast. After installing solar panels on my own house, I built TheGreenWatt to share what I learned. All calculators use NREL PVWatts v8 data and peer-reviewed formulas.