Path-Q Solar
What solar panel degradation rate should I use in a long-term estimate?
Answer
Use the degradation assumption supported by the specific panel's warranty and technical documentation, and test a more conservative sensitivity case rather than relying on a generic industry figure. Separate normal gradual degradation from outages, soiling, shading, and equipment failure.
Key points
- Check whether the warranty specifies an initial degradation step and a later annual rate.
- Confirm what output measurement, test conditions, and end-of-term guarantee apply.
- Apply degradation to production over time, not directly to bill savings without updating future rates and usage.
- Model at least a base case and a conservative case.
- Treat inverter replacement, downtime, shading growth, and maintenance separately from panel degradation.
What it depends on
- Panel model and degradation warranty
- Warranty measurement and claim terms
- Climate and installation conditions
- Model horizon and financial assumptions
Risks and trade-offs
- A low advertised rate may not reflect the warranty's actual guaranteed output path.
- Degradation is uncertain and may vary across products and environments.
- Overly conservative assumptions can understate value, while optimistic assumptions can overstate it.
Information you may need
- Exact panel model
- Product and performance warranty
- Expected operating environment
- Long-term production and financial model
Your next step
What to do next
Enter the warranty's stated output schedule into the model and run a sensitivity analysis using a less favorable degradation assumption.
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SQ00148