How do I calculate annual degradation of my solar panels?

Degradation is defined as the loss of power produced relative to the rated power. To calculate the annual degradation percentage of solar panels, we’ll need to know the annual kWh production of the system. This can be measured and recorded using a photovoltaic production meter.

As an example, let’s assume the following about our solar system:

Assuming all other variables are held constant (e.g. no degradation in any of the other equipment, consistent insolation values and weather year-to-year, etc.), the annual degradation is the percent difference between each year’s production.

Year 2 degradation = 100*(101,017 - 99,669) / 101,017 = 1.334%

Year 3 degradation = 100*(99,669 - 99,268) / 99,669 = 0.402%

Year 4 degradation = 100*(99,268 - 98,785) / 99,268 = 0.487%

Year 5 degradation = 100*(98,785 - 98,314) / 98,785 = 0.477%

This is the most accessible way to calculate degradation. In reality, other equipment in the system may degrade over time, weather patterns may influence production, and other conditions and variables factor into the degradation calculation.

Different solar panel manufacturers offer different warranties for their products. When testing for degradation, PV module manufacturers utilize standard testing conditions (STC is 1000 W/m2, 25^oC, and air mass 1.5) where none of these confounding variables are a concern. Claims against their warranties will also be tested in these conditions at an independent nationally recognized testing laboratory (NRTL). This enables the degradation calculation to be as precise and accurate as possible.