Path-Q Solar
How much should panel degradation reduce the long-term production and savings estimates for a solar system?
Answer
Long-term models should include an annual degradation assumption rather than treating production as constant. The appropriate assumption should come from the specific panel warranty or a clearly stated conservative modeling convention, and the effect should be applied year by year to production and related savings.
Key points
- Degradation compounds over time, so later-year output is lower than first-year output.
- The model should distinguish initial commissioning or first-year assumptions from the subsequent annual decline.
- Savings decline may not exactly match production decline because energy prices, bill structure, exports, and self-consumption can change.
- Compare the modeled degradation assumption with the panel's performance warranty.
What it depends on
- Panel performance warranty and product type
- Analysis period
- Annual production model
- Future electricity prices, bill treatment, and self-consumption
Risks and trade-offs
- An overly optimistic degradation assumption can overstate lifetime energy and financial return.
- A conservative assumption may understate performance but can make comparisons more robust.
- Warranty capacity does not guarantee exact annual production at a particular site.
Information you may need
- Panel performance warranty
- First-year production estimate and analysis period
- Assumptions for electricity prices, exports, and self-consumption
Your next step
What to do next
Recalculate the financial model with the documented warranty-based degradation assumption and run a more conservative sensitivity case.
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SQ00952