Degradation Rate

Degradation rate is the percentage of power output a solar panel loses each year due to natural aging processes. All solar panels gradually produce less electricity over time as the semiconductor material, encapsulant, and connections slowly deteriorate from UV exposure, thermal cycling, and environmental stress.

Modern monocrystalline panels typically degrade at 0.4% to 0.6% per year after an initial first-year degradation of 1% to 3% (called light-induced degradation or LID). Over a 25-year lifespan, a well-made panel operating at 0.5% annual degradation would retain roughly 87-88% of its original output.

Manufacturers guarantee minimum output levels through performance warranties. A common warranty structure guarantees no more than 2% degradation in year one, followed by no more than 0.5% per year thereafter, with a guarantee of at least 80-85% of rated output at year 25.

Degradation rates vary by technology. PERC cells suffer from Light and Elevated Temperature Induced Degradation (LeTID), though manufacturers have largely mitigated this. TOPCon and HJT cells show lower degradation rates in early field data. Thin-film CdTe panels experience faster initial degradation but then stabilize.

When evaluating panels, check the performance warranty's guaranteed output at year 25 — this is the manufacturer's own projection of how much degradation they expect. Higher year-25 guarantees (84-87% vs 80%) indicate confidence in lower degradation.