The Importance of Low Degradation Rates in Solar Panel Investments
SOLAR INSIGHTS

The Importance of Low Degradation Rates in Solar Panel Investments

By Brendan Bostock | 10 Jan 2026

Solar Panel Degradation: Why a Low Rate is Key to a Sunny Investment

So, you're thinking about going solar, good on ya! Joining the renewable energy revolution is a smart move for your wallet and the planet. But before you jump in, it's crucial to understand a key factor that will impact the long-term performance of your solar panels: the degradation rate.

What exactly is degradation rate, and why should you care? Simply put, it's the rate at which a solar panel's ability to produce electricity declines over time. All solar panels degrade, it’s inevitable. However, a lower degradation rate means your panels will maintain their performance for longer, ultimately saving you money and maximising your return on investment. To further your research into the best modules, read this Complete Guide.

Understanding Solar Panel Lifespan and Degradation

Solar panels are a long-term investment, generally designed to last at least 25 to 30 years, and potentially even longer with proper care. This longevity is a major selling point, but it's essential to understand that their power output won't remain constant over that entire period. This is where the degradation rate comes in.

Most manufacturers guarantee a certain power output after 25 years, usually around 80-85% of the original capacity. The degradation rate reflects how quickly the panel loses its ability to generate electricity, affecting how much energy you receive from your panels.

Why Low Degradation Rates Matter

Here's why a low degradation rate is so important for Aussie solar panel investors:

  • Maximised Energy Production: Panels with lower degradation rates produce more electricity over their lifespan, leading to greater energy savings and a faster payback period on your investment. Even a seemingly small difference in the annual degradation rate can add up to significant energy losses over 25 years.
  • Increased Return on Investment (ROI): More energy produced translates directly into higher savings on your electricity bills or increased revenue if you're selling excess power back to the grid. A lower degradation rate ensures your panels continue to generate a substantial income for years to come.
  • Long-Term Reliability: Panels with low degradation rates often indicate higher quality components and manufacturing processes. This generally translates to a more reliable and durable system that requires less maintenance and is less prone to unexpected failures.
  • Reduced Lifecycle Costs: While panels with lower degradation rates might have a slightly higher upfront cost, they can save you money in the long run by reducing the need for replacements or additional panels to maintain your desired energy output.

Factors Influencing Degradation

Several factors can influence the degradation rate of solar panels:

  • Environmental Conditions: Australia's harsh climate, with its intense sunlight, high temperatures, and humidity, can accelerate panel degradation.
  • Manufacturing Quality: Poor manufacturing processes, defects in materials, or improper sealing can lead to faster degradation.
  • Material Composition: The materials used in the solar cells and other components play a significant role. For example, some panels may experience Light-Induced Degradation (LID), a temporary reduction in efficiency caused by the interaction of boron and oxygen in the silicon material when first exposed to sunlight. Manufacturers often use processes to mitigate LID. Potential-Induced Degradation (PID) can also occur due to voltage differences within the panel, leading to permanent performance loss.
  • Soiling: The buildup of dirt, dust, and other debris on the panel surface can reduce its efficiency. Regular cleaning can help mitigate this issue.
  • Physical Damage: Cracks, scratches, or dents can all contribute to performance degradation.

Choosing Solar Panels with Low Degradation

When selecting solar panels, consider the following to ensure you're investing in a system with a low degradation rate:

  • Check the Manufacturer's Specifications: Pay close attention to the manufacturer's warranty and the specified degradation rate. Look for panels with a warranty that guarantees a high percentage of original power output after 25 years.
  • Look for Independent Testing and Certifications: Independent testing and certifications can provide unbiased information about the panel's performance and reliability.
  • Research Panel Technologies: Some panel technologies, such as N-type panels, generally exhibit lower degradation rates compared to others.
  • Consider PID-Resistant Panels: Particularly if you live in an area with high humidity, consider panels specifically designed to resist PID.
  • Choose a Reputable Installer: A qualified and experienced installer can ensure proper installation, which can minimise stress on the panels and reduce the risk of premature degradation.
  • Regular Maintenance: Regular cleaning and inspections can help identify and address any potential issues early on, preventing further degradation.

Conclusion

Investing in solar panels with low degradation rates is crucial for maximising the long-term benefits of your solar investment. By understanding the factors that influence degradation and carefully selecting your panels, you can ensure your system delivers reliable and cost-effective renewable energy for decades to come. So, do your homework, choose wisely, and enjoy the sunny savings!

Brendan Bostock
Written by Brendan Bostock

Editor in Chief & Solar Enthusiast

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