Solar panels have come a long way since their first commercially available predecessors in the 1960s, and they now boast efficiency rates of up to 24%. This makes them a smart, eco-friendly choice for homes and businesses looking to save money and reduce their carbon footprint.

Curious about how much solar panels can reduce your utility bills by? Answer a few quick questions below and we'll generate a savings estimate for you.

What does ‘solar panel efficiency’ mean?

The term 'solar panel efficiency' simply means how well solar panels convert natural light into electricity, expressed in terms of a percentage. For example, if a solar panel is 20% efficient, this means that 20% of the natural light that hits the solar panel will be converted into electricity. 

If we know how well a solar panel performs, we can understand its value and effectiveness.

How is solar panel efficiency measured?

To measure solar panel efficiency, manufacturers calculate the ratio of the electrical output to the solar input (both measured in watts (W)) using carefully controlled measures under Standard Test Conditions (STC).

In a lab, STC are carried out by exposing the solar panel to a controlled light source that simulates daylight, typically at a standard intensity of 1 kW (1 kilowatt = 1,000W) per m2 and at a temperature of 25°C.

We then work out the efficiency by dividing the electrical output by the input solar energy and then converting it to a percentage: solar panel efficiency (%) = (Electrical output (W) ÷ input solar (W)) x 100.

What’s the average efficiency of a solar panel?

Today, the average efficiency of commercially available solar panels typically ranges from about 15% to 24%. However, it's worth mentioning that the efficiency can vary depending on the type of solar panel technology used.

Monocrystalline solar panels, for example, are made from a single crystal structure and typically have efficiencies above 20%. On the other hand, polycrystalline solar panels, made from multiple crystal fragments, have slightly lower efficiencies.

Advanced, high-efficiency panels can reach efficiencies above 23%, but these are usually pricier and are mainly used in specific situations where space is limited.

What’s the most efficient type of solar panel?

The most efficient type of solar panel currently in existence is made using perovskite minerals. Recent lab tests have shown perovskite-silicon solar cells reaching well over 30% efficiency. However, perovskite solar panels aren't widely available at the moment because of stability issues and production challenges.

For commercially available solar panels, monocrystalline silicon panels are your best bet. These panels typically have an average efficiency ranging from about 18% to 24%.

What’s the least efficient type of solar panel?

The least efficient type of commercially available solar panel uses thin-film solar technology. Their average efficiency ranges from about 7% to 13% - however, they’re not as expensive as traditional solar panels, and they’re very flexible (which makes them useful on campervans and boats).

How much has solar panel efficiency improved over time?

From its early selenium-based roots in the 19th century to today’s record-breaking solar cells, solar panel efficiency has made great strides. Between the mid-1970s and 2022, the highest efficiency achieved by solar cells in a lab has shot up from 21.9% to almost 48%.

The data below is based on a report from the National Renewable Energy Laboratory (NREL) in the US, who have recorded all major breakthroughs in solar cell efficiency since the mid 1970s.

The most recent breakthrough of 47.6% was achieved by the Fraunhofer Institute for Solar Energy Systems, in Germany.

Solar cell efficiency 1975-2022

What factors affect a solar panel’s efficiency?

Several factors have an effect on how well a solar panel turns natural light into electricity.

Fortunately, you can influence most of these elements.

Here are the attributes that have the biggest impact on a panel's efficiency:

• Age
• Shading
• Angle
• Orientation
• Cleanliness

Age

Most solar panels experience a gradual efficiency loss of about 0.5% to 1% per year, known as degradation. This means that after 20 to 25 years, your solar panels may operate at roughly 80% to 90% of their original efficiency.

Gradual solar panel degradation is normal and almost impossible to prevent in the long term. Long term exposure to UV light slowly weakens the solar panel’s backsheet (which protects the panel from external stresses), and the solar panel’s internal wires that transport electrons will also wear away.

To avoid this degradation having too much impact on your savings, make sure you get high-quality panels that come with a performance warranty guaranteeing a high level of efficiency for the next 25 or 30 years.

Shading

Shading from trees and buildings can reduce a solar panel’s electricity production, especially at certain times of the day when the sun will throw longer shadows across your roof.

Solar panels are usually connected together in small groups (known as a series or string), and even partial shading on one panel can lower the output of the whole string.

You can tackle shading by reducing the number of objects above your roof, with a particular focus on overhanging branches.

Angle

Incorrect angling can cause your solar panels to absorb less daylight, leading to reduced electricity output.

The perfect angle differs depending on where you are and the time of year, but most UK homes will benefit from a tilt of around 30-40 degrees.

Orientation

In the northern hemisphere, solar panels typically perform best when facing south to receive the most sunlight throughout the day.

East and west-facing roofs – and everywhere in between – can also work well. Completely north-facing solar panels are often not worth installing, but solar technology has improved to the point where this isn't always true anymore.

Cleanliness

Dust and dirt can accumulate on your solar panels, blocking the light and cutting their output.

Rain will tend to keep your panels pretty clean, but if you’re living in a particular dusty area or right on the coast (where the air is salty), you may need to do a bit of extra cleaning yourself.

However, make sure you only ever do this from ground level with an extendable brush - or pay for the services of professional solar panel cleaners who can safely go onto your roof.

What technology can improve solar panel efficiency?

There are a few different technological advancements that are set to revolutionise solar panel efficiency in the coming years.

Some are already in use, either in large-scale commercial projects or in an increasing number of domestic systems.

Bifacial

A bifacial solar panel absorbs light on both sides. This sets them apart from traditional panels, which only use one side for this purpose.

How much of an efficiency advantage this gives bifacial panels over other models is unclear, as it depends on the gap between your panel and roof, how reflective your roof tiles are, and the angle of your roof.

But it seems a safe bet that all things being equal, they're more efficient than regular panels.

PERC

PERC stands for Passivated Emitter and Rear Contact, and refers to a technique used on the back of a solar panel during the manufacturing process.

Firstly, the back layer is made reflective, so any unabsorbed light rebounds through the panel to the cells above, giving them another chance to use it. This allows panels with PERC to make better use of the light they receive than most models.

A passivation layer is then added so that the panel takes on less heat, and therefore avoids overheating and losing efficiency.

However, PERC is rapidly falling behind heterojunction (HJT) and Tunnel Oxide Passivated Contact (TOPCon) in the technological stakes.

These approaches build on PERC with additional features that work to increase a panel's efficiency even further.

Half cell

Half cell solar panels are exactly what they sound like: panels composed of cells that have been cut in half.

These cells are connected in series – that is, on one string. Two of these strings are then connected in parallel, ensuring that the panel's overall voltage doesn't exceed that of a traditional panel.

This lowers a panel's resistive losses, improve its defences against shade, and make hotspots less likely.

Some of the best solar panels on the market at the moment use half cells.

Concentrator Photovoltaics

Concentrator Photovoltaics, also known as CPV, is a technique that concentrates sunlight with curved lenses or mirrors onto tiny, specialised solar cells.

This process leads to solar irradiance levels that are equivalent to 1,000 suns or more. To put that into context, domestic panels receive their rating from tests carried out under one-sun conditions.

CPV is generally only used in hot parts of countries including South Africa, Spain, and the US, by large energy companies that sell the energy they produce to the grid.

It's not available for residential use, both because it's extremely expensive and because it requires a decent amount of cooling equipment to avoid overheating.

However, it will almost certainly inform future domestic solar developments.

How efficient are solar panels compared to other renewable energy sources?

Unfortunately, one disadvantage of solar panels is that they're not the most efficient source of renewable energy out there.

However, the best source of renewable energy for a specific place doesn’t just come down to efficiency. It depends on multiple factors, including climate, geography, costs, maintenance, and specific energy needs. And when it comes to small-scale, residential installations, no other renewable energy source comes closer to solar.

Let’s compare the respective efficiencies of wind, hydroelectric, and geothermal.

Wind power efficiency

‘Wind power efficiency’ refers to how well wind turbines turn kinetic energy into electricity. The maximum theoretical efficiency, known as the Betz limit, is about 59%. However, modern wind turbines typically achieve efficiencies of 35% to 45%.

Wind power efficiency varies with wind speed, turbine design and other environmental factors.

Hydroelectric power efficiency

Hydroelectric power, or pumped storage, is one of the most efficient sources of renewable energy, converting over 90% of its available potential and kinetic energy into electricity.

The reason it’s not 100% is because of friction between the shaft of the motor and the turbine. These parts never spin together without at least a small amount of friction, and this consequently reduces the total amount of energy the turbine can generate. There’s also friction between the water and the turbine, which again causes energy losses.

Geothermal power efficiency

Geothermal power plants, which get their energy from the Earth's heat, have an average efficiency of 10% to 20%. Though that may not seem as impressive as solar and hydroelectric power, geothermal plants can operate 24/7, unlike solar panels or wind turbines that need daylight or a breeze to work.

Geothermal electricity isn't the most efficient, but it's consistent, making it a reliable power source for many countries around the world.

Summary

As we've explored, solar panels offer a promising and efficient way to harness renewable energy - and with ongoing advancements in technology, they’re becoming increasingly effective and cost-efficient.

If you're considering making the switch to solar, Sunsave is here to help. For more information about how much a solar & battery system could save you, click the button below and answer a few quick questions.

Solar panel efficiency: FAQs