Solar Efficiency vs. Solar Output: What's the Difference?
SOLAR INSIGHTS

Solar Efficiency vs. Solar Output: What's the Difference?

By Brendan Bostock | 15 Jan 2026

Solar Efficiency vs. Solar Output: What's the Difference? A Sunny Guide for Aussies

Thinking about going solar, mate? You've probably heard terms like "solar efficiency" and "solar output" thrown around. But what do they actually mean, and how do they affect your solar investment? It's crucial to understand the difference to make informed decisions about your solar system. This blog post will break it down in plain Aussie terms.

For a deeper dive, you might also find this Complete Guide helpful.

What is Solar Panel Efficiency?

Imagine two identical rectangles laid out in the sun, both ready to soak up those rays. Now, think of efficiency as how well each rectangle converts that sunlight into usable energy.

Solar panel efficiency is the percentage of sunlight that a solar panel can convert into electricity. So, a panel with 20% efficiency converts 20% of the sunlight hitting it into electricity, while the other 80% is lost as heat or reflected. The higher the efficiency, the more electricity you get from the same amount of sunlight.

Panel efficiency is primarily determined by the solar cell technology used. Newer technologies are pushing the boundaries of efficiency, meaning we can now get more power from smaller panels. A typical solar panel used in Aussie homes is around 1 meter wide and 1.7 meters long. But with more efficient panels, you could potentially generate more power using the same roof space.

Why does this matter? If your roof space is limited, higher efficiency panels are essential to maximise your energy generation. They allow you to squeeze more kilowatts out of a smaller area.

What is Solar Panel Output?

Solar panel output, on the other hand, refers to the amount of electricity a solar panel produces. This is generally measured in watts (W) or kilowatts (kW). Think of it like this: a solar panel is like a tap. The output is how fast the electricity "flows" out of that tap.

A solar panel's rated capacity, measured in watts, indicates the power it will generate under ideal, laboratory-controlled conditions (called "standard test conditions"). For instance, a 350W panel, under these perfect conditions, will generate 350W of power. A typical home solar system might consist of several of these panels. For example, 19 x 350W panels would create a 6.65kW system.

However, it's important to remember that these are ideal conditions. Real-world performance will vary. Factors like temperature, shading, panel angle, and even the time of day all influence the actual power output.

Solar panels are designed to capture both direct sunlight and diffuse sunlight – that's sunlight scattered by clouds and the atmosphere. They still produce electricity on cloudy days, but substantially less compared to clear, sunny days.

Importantly, solar panels gradually lose their ability to generate electricity over time, a process known as degradation. This degradation is usually covered by a performance warranty, specifying the maximum amount the panel's output will reduce.

The Relationship Between Efficiency and Output

Efficiency and output are related but distinct concepts. Think of it this way:

  • Efficiency: How well a panel converts sunlight into electricity (a percentage).
  • Output: The amount of electricity the panel actually produces (watts or kilowatts).

For a panel of a specific size, higher efficiency translates to higher output. If you have two panels of the exact same size, the more efficient one will have a higher wattage rating, meaning it will produce more electricity under the same conditions.

Kilowatt-hours: Measuring Electricity Generation Over Time

The actual amount of electricity generated by a solar system over a period is measured in kilowatt-hours (kWh). If a 1kW solar system operates under standard test conditions for one hour, it will produce 1 kWh of electricity.

Across a year, a 1kW solar panel setup in Australia could generate between 3.5 kWh and 5 kWh of electricity per day. The precise amount will fluctuate based on your location, the direction your panels face, and the angle they are mounted at. For example, you'll generate more power in sunny Queensland than in Tasmania, and more in summer than in winter.

What This Means For Your Solar Investment

When choosing a solar system, both efficiency and output are key.

  • Limited roof space? Prioritise higher efficiency panels to maximize energy generation within the available area.
  • Plenty of roof space? You might consider less efficient (and often more affordable) panels, as you can simply install more of them to achieve your desired output.

Your solar installer will help you determine the best combination of panel efficiency, panel output, and system size to meet your specific energy needs and budget. They'll assess your roof, energy consumption, and local climate conditions to create a customised solar solution.

Ultimately, understanding the difference between solar efficiency and solar output empowers you to make informed decisions, ensuring you get the most bang for your buck from your solar investment and contribute to a cleaner, greener Australia.

Brendan Bostock
Written by Brendan Bostock

Editor in Chief & Solar Enthusiast

Connect on LinkedIn