Solar consumers can be intimidated by the technical nature of the solar installation process. This guide can help you select the best solar panels for your project by looking at five criteria: performance factor, efficiency, price, degradation, and environmental impact.

Performance Factor

Solar panel manufacturers never tell you how much power their products can produce on the roof of your home, or anybody’s home for that matter. Instead, they provide a power rating based on standard test conditions (STC), where the panels are exposed to a quick burst of light measuring 1,000 Watts (W) per square meter with the temperature set to 250C.

The advantage of using standard test conditions is it allows for a direct comparison of any two solar panels. The disadvantage is that standard test conditions don’t exist in the real world. Actual output is closer a different standard developed for large-scale solar farms known as PVUSA Test Conditions (PTC), which comes from the Photovoltaics for Utility-Scale Applications project. PTC uses 1,000 W per square meter at 200C air and wind speed of 1 meter per second at 10 meters above ground level. The PTC rating is typically 10-15% lower than the STC rating.

The pros and cons of PTC are the opposite of STC. It exists in the real world but doesn’t allow for a simple comparison of solar panels. To get the best of both worlds, you have to look at power output in real-world conditions and power output from the lab. The result is a measurement called performance factor. The formula is as follows:

Performance factor = PTC / STC

All solar panels have a performance factor between 0.8 and 0.95. The closer to 0.95, the better. PTC ratings of commercially available solar panels can be found at the GoSolarCalifornia website.


Solar panel efficiency refers to the amount of energy converted in a given location relative to available solar irradiation. If solar irradiance is 1,000 W per square meter (m2) and a panel measuring 1 m2 produces 160 W in that location, then the efficiency is 16% (160 ÷ 1,000 = 0.16). Higher efficiency means less space is required to produce a certain amount of power.

With ample roof space, a homeowner might be able to reduce system cost using less efficient solar panels that take up more surface area. With limited roof space, opt for panels with higher efficiency to ensure maximum energy production.


All things being equal, a solar panel with a higher power rating will probably cost more than a solar panel with a lower power rating. That doesn’t mean the higher-priced panel will help you produce more energy. Why not? Because energy output is also affected by other components in a solar energy system, like the cables that transmit energy from the solar panels to the electric grid and the inverters that switch direct current produced by your solar panels into alternating current used in your home.

When comparing solar panel prices, pay attention to the price per watt (PPW) of rated power. Most commercially available solar panels vary widely from $0.50 to $1.10 per watt, while high-efficiency solar panels can cost up to $2 per watt. Buyers might consider paying a premium for solar panels if they have space constraints on the roof and high-efficiency panels are the only way to produce enough energy. Another reason to pay extra for solar panels is to reduce the number of panels needed in an installation. With fewer panels, it’s possible to reduce other material costs and installation labor costs, meaning you pay a little extra for solar panels to achieve a net reduction in the overall system price.

Solar panel pricing is important because solar panels may constitute as much as 30% of total project price.


Solar panel degradation is essential to the lifetime output of a solar energy system. Over time, a solar panel’s efficiency depends on how it withstands changes in temperatures and exposure to rain and snow. These environmental factors can cause corrosion, adding resistance in a solar panel’s electrical circuit, reducing power output, or even causing the solar panel to fail.

Manufacturing defects can also contribute to solar panel degradation by decreasing shunt resistance, or parallel resistance. Low shunt resistance causes power losses by providing an alternate path for current to travel, reducing efficiency.

Annual degradation rates of solar panel production range between 0.25% to 0.7%, but most commercially available panels are 0.5%.

Environmental Impact

Even though solar panels don’t have any significant environmental impacts during operation, solar panel manufacturing generates greenhouse gases and toxins due to mining of raw materials (like silicon for crystalline silicon solar panels and cadmium for cadmium-telluride thin-film solar panels), transportation of materials, and power consumption in the factory. Solar panels also pose harm to the environment if not disposed properly.

According to Web Energy Blog, solar panel production yields 21 grams of carbon for every kilowatt-hour (kWh) of energy produced. Emissions from coal and natural gas reach a much higher range of 300-323 grams of carbon per KWh and 136-178 grams of carbon per KWh, respectively. Coal and natural gas have higher overall emissions because they continue to produce carbon dioxide during the operational phase.    

The continued growth of solar industry requires immediate action to reduce the use of toxic chemicals in production and disposal, develop proper recycling systems, and protect workers’ health. Make sure that your solar panel manufacturer participates in end of life collection and recycling of solar panels, supports environmental protection rules in the region of manufacturing, provides details about emissions in its annual report, and also doesn’t have traces of chemicals mentioned under RoHS (the Restriction of Hazardous Substances directive) that might lead to soil or water contamination.

The Silicon Valley Toxics Coalition’s Solar Scorecard provides a discussion about environmental programs run by the major solar panel manufacturers.

Additional Factors

Other factors to consider when selecting solar panels for your rooftop installation include power tolerance, a measure of how much electrical power a solar panel may produce above or below its rated capacity at any time, and warranty terms and conditions, which describe what the solar panel manufacturer will do if you discover a product defect or a performance defect at some point during the operating life of the system.


Incentive Eligible Photovoltaic Modules in Compliance with SB1 Guidelines:

How Much Do Solar Panels Cost:

Degradation and Failure Modes:

Web Energy Blog:

Solar Scorecard 2015:

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