Solar Panel Degradation: How Much Output Do You Actually Lose Over Time?

Panels don't fail suddenly — they degrade gradually, and understanding the curve helps you evaluate warranty claims and long-term production estimates.

What degradation actually is

Solar cells slowly lose a small amount of efficiency each year due to normal exposure to UV light, heat cycling, and micro-level material changes. This is expected, gradual, and built into every manufacturer's performance warranty — it isn't a sign of a defective panel.

Typical degradation rates in 2026

Premium monocrystalline panels from top-tier manufacturers typically degrade around 0.3-0.5% per year. Budget or older-generation panels can run closer to 0.7-0.8% per year. At 0.4%/year, a panel would retain roughly 90% of its original output after 25 years — well within most manufacturers' performance warranty guarantees (commonly 82-87% minimum at year 25).

The first-year "light-induced degradation" dip

Most crystalline silicon panels experience a slightly larger one-time efficiency drop (roughly 1-3%) in their first weeks of light exposure, called light-induced degradation, which is already factored into the manufacturer's stated efficiency rating — it's not an additional loss on top of the ongoing annual rate.

What this means for your 25-year savings estimate

A production estimate that assumes flat output for 25 years is overly optimistic; a realistic estimate should build in the gradual decline. Most reputable installer quotes already factor this into their long-term savings projections — if a quote shows completely flat annual output for the full system life, that's worth asking about.