​How Efficient Are Solar Panels: A Brief Guide

How Efficient Are Solar Panels: A Brief Guide

Considering a DIY Solar System or looking to upgrade your current system? The first step in choosing the right equipment is understanding the basics of how solar works. This post will provide an overview of how solar panels convert light into usable electricity and solar panel efficiency.

  • What is solar panel efficiency?

    • How does a solar panel work?
    • How efficient are solar panels now and then?

  • Why does solar panel efficiency matter?

    • Space

    • Cost and environmental impact

  • How Solar Panel Efficiency is Calculated?

    • Module efficiency VS. Cell efficiency

    • Breakdown of calculation

What is solar panel efficiency?

How does a solar panel work?

A single solar panel consists of multiple photovoltaic (PV) cells, commonly referred to as solar cells. These wafer-like silicon cells are semiconductors that create electrical current when exposed to sunlight.

Solar cells typically have multiple silicon layers like a sandwich. These include a p-type silicon layer (or positive layer) and an n-type silicon layer (or negative layer). When the sun shines on a solar cell, it transfers the sun’s energy to negatively charged particles called electrons. The electrons flow between the p and n layers creating
electric current. This process is known as the Photovoltaic Effect.


(Fig 1. Identifying parts of P-N junction in a silicon solar cell.)

This current is then extracted through conductive metal contacts or electrodes. Individual solar cells are wired together to make a solar panel or module. Solar panels in-turn can be wired together to form a solar array to meet the energy needs of a home or vehicle.

How efficient are solar panels now and then?

Now that we’ve covered how solar panels create usable electricity, the next step is to understand how much power they produce. This will help you identify how many panels you’ll need to meet your energy needs.

Today you can find a wide variety of solar panels with efficiencies ranging between 15 and 22 percent. Solar efficiency has increased significantly in recent years with advances in materials and technology. The first selenium solar cell developed in 1883 by American inventor Charles Fritts, had an efficiency of just 1 percent. And for decades after that, advances were minimal.


(Fig 2. 1956 Bell Labs ads for solar battery system. Source: Sensei Alan from Flickr)


But in 1954, Daryl Chapin, Calvin Fuller, and Gerald Pearson developed a practical silicone cell that changed the game. This new silicone cell could convert enough solar energy into electricity to power electrical devices. Before long, Bell Laboratories invented a new silicone cell that initially achieved 4 percent efficiency but soon was up to 11 percent. Since then, new and better solar technologies have been introduced, such as half-cut and diode designs. These and other technologies are driving big advances in solar efficiency.

Why does solar panel efficiency matter?

Efficiency ratings can be tough to get your head around, even for the most knowledgeable solar consumers. Let’s take a look at how efficiency plays a central role in planning solar projects.


Using panels with higher efficiency lets you save space by using fewer panels to generate the same amount of power. That means you can fit a larger system with more power on the same available roof space.


(Fig 3. Comparing the roof space installed with PV module of different efficiency.)

The image above shows two different 1300W solar arrays. The right one uses 3 of Renogy’s latest 450W solar panels with efficiency up to 22.8%. It covers an area of 70 square feet. The one on the left uses 13 of Renogy’s classic 100W solar panels with efficiency of up to 22% and covers an area of 78.8 square feet. As you can see, higher efficiency panels save you roof space. That means you can fit a larger system with more power on your roof.

Cost and Environmental Impact

Choosing highly efficient solar panels is also beneficial to you and the environment. Using fewer panels means fewer resources for manufacturing and reduced impact of disposal. Processing silicon and turning it into wafers requires large amounts of energy.

When panels produce more energy your payback period is also shorter. According to Dutch researcher E.A. Alsema, it takes approximately 4 years for current multi-crystalline solar panels with 12% efficiency to achieve return on investment. In comparison, the payback time is reduced to only 2 years for solar panels with 14% efficiency.


(Fig 4. Energy payback for PV Modules of different efficiency. Data from https://www.nrel.gov/docs/fy04osti/35489.pdf)

Although the upfront investment for a complete
solar power system is significant, don’t forget that a solar panel usually lasts 20-30 years. Keep in mind how much you can save on utility bills by going solar. Once you consider how much you’re saving, it’s easy to see how your investment in solar will pay for itself in just a few years.

How Solar Panel Efficiency is Calculated

You may be wondering how efficiency is calculated and how solar companies use them as a selling point. Below is a step-by-step demonstration of how to calculate the efficiency of a solar panel.

Calculating efficiency ratings is easy. You can do it with a simple math equation. It’s really just the ratio of a panel’s power output to the solar energy absorbed on the surface of a panel under standard testing conditions. The equation below shows just how easy it can be.


Module efficiency VS. Cell efficiency

To understand solar panel efficiency, first we need to understand solar cell efficiency. We know module efficiency is the ratio of the power a module can produce to the solar energy hitting the surface of a panel under standard testing conditions. But for solar cells, efficiency is calculated using the same ratio but there’s a gap between these two efficiency ratings. There’s a gap because the cell efficiency is calculated with the area of a single cell. In contrast, the module efficiency includes other aspects of a panel’s construction. This includes shading that may come from other components in the panel such as busbars, or space between cells that may lead to energy loss.

At Renogy, we refer to cell efficiency when talking about solar panel efficiency since cells are the fundamental components of a module. You can also find cell efficiency ratings in the specification section of a module.


(Fig 7. Comparing the area of a solar cell and a PV module.)

Breakdown of calculation

Let’s use what we’ve learned to calculate efficiency with our popular
100W Monocrystalline Solar Panel (Compact Design)

Step 1. Determine the module’s maximum power output under optimal conditions

To get the maximum power output of a solar panel (Pmax), we use the maximum power output of a module before the encasing process. After encasing solar cells in glass, the extra layer reduces sunlight absorption, leading to a lower efficiency rating. This figure should be in Watts (W). In the case of our 100W monocrystalline solar panel (compact design), the maximum power output of the module before encasing is 108W after testing in the lab.

To get the maximum power output of a solar cell, divide maximum power output by the number of the solar cells in the module. In this case, the maximum power output a solar cell can deliver is:

108W/36 (pcs)=3W/cell

Step 2. Find the dimensions of the solar cell

You can find the dimensions of a module in its the specifications. The size information is either in millimeters (mm) or inches (in). You’ll need to convert these figures into meters (m) for other calculations.

The dimensions of this 100W solar panel are:
41.8 x 20.9 x 1.4 in / 1.06 x 0.53 x 0.035 m

The dimensions of its solar cells are:
6.5 x 3.3 in / 0.1651 x 0.08382 m

Step 3. Determine the module’s maximum absorbed power at standard testing conditions (STC)

First let’s look at the definition of standard testing conditions for the factors considered in panel efficiency.

  • Irradiance 1000W/m2: This means 1000W of solar energy is absorbed by a square meter on a module at a given time.
  • Temperature 25°C: Solar cells are tested at 25°C. Note that this does not refer to the ambient temperature.
  • Air Mass 1.5: This metric is related to the angle the sunlight hits a given spot on the earth. The smaller the number, the smaller the distance sunlight needs to travel to reach the earth’s surface.

To get the maximum absorbed power at standard testing conditions, multiply the irradiance 1000W/m2 and the solar panel/solar cell area. In this case, the calculation is:

1000W/m2 x (1.06 x 0.53 m)=561.8W

1000W/m2 x (0.1651 x 0.08382 m)=13.8W

Step 4. Calculate cell efficiency

The final step is to divide the total power output by the absorbed energy of the panel/solar cell.

The module efficiency of this 100W solar panel:

100W/1000W/m2 x (1.06 x 0.53 m) ≈ 18%

The solar cell efficiency of this 100W solar panel:

3W/1000W/m2 x (0.1651 x 0.08382 m) ≈ 22%

Your Solar Journey is Just Beginning…

We hope this brief guide has given you a basic understanding of solar panel and solar cell efficiency. When shopping for PV modules, remember that solar panels with higher efficiency can save more space and provide a shorter payback time. And, in addition to your daily energy needs, available rooftop space, and your budget are important considerations when purchasing solar. You can read our another article to learn more about
how much are solar panels for your house

There’s still much more to cover to around this topic. So don’t miss our next post to learn about how environmental factors can impact efficiency. Stay tuned so we can take your solar journey even further.

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Everything You Need To Know About Solar Tax Credit

How Long Do Solar Panels Last?

Solar Panels Maintenance Best Practices and Costs

How Many Solar Panels Do I Need?

How Much Does A Solar Panel Cost?

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