Solar Panel Degradation: What Actually Happens Over 25 Years

Modern panels degrade about 0.5% per year. After 25 years, that adds up to roughly 12% lower output than year one. The payback math should reflect it.

Degradation is real and measurable. We walk through the numbers, explain the year-1 LID dip, compare manufacturer warranties, and show how much it changes the long-run savings estimate.

Key takeaways

Modern monocrystalline solar panels degrade at roughly 0.4??.7% per year after an initial year-1 LID (light-induced degradation) drop of 1??%.

After 25 years, a panel rated at 400W typically outputs around 340??60W ??about 85??0% of original nameplate capacity.

Most leading manufacturers warrant 80??7% output at year 25. Solar Payback Map models degradation at 0.5%/yr, consistent with NREL median research.

Modern monocrystalline solar panels degrade at roughly 0.4??.7% per year after an initial year-1 LID (light-induced degradation) drop of 1??%.

After 25 years, a panel rated at 400W typically outputs around 340??60W ??about 85??0% of original nameplate capacity.

Most leading manufacturers warrant 80??7% output at year 25. Solar Payback Map models degradation at 0.5%/yr, consistent with NREL median research.

Panels get slightly less productive every year

Solar panel degradation is the gradual reduction in output caused by UV exposure, thermal cycling, humidity ingress, and chemical changes in the silicon. It is measurable, predictable, and already factored into manufacturer warranties.

The industry median is approximately 0.5% efficiency loss per year. That means a panel producing 1,000 kWh in year one produces about 995 kWh in year two, 990 kWh in year three, and about 880 kWh in year 25. It is not dramatic ??but it is real, and it belongs in any honest 25-year savings estimate.

Year-one LID: the first-year performance dip

Light-induced degradation (LID) is a different phenomenon from long-term wear. It happens in the first several hours to days of sun exposure as boron-oxygen defects form in crystalline silicon cells.

LID typically causes a 1??% output reduction in year one alone. High-quality panels are pre-tested or use LID-resistant cell technology (n-type TOPCon, HJT). Budget monocrystalline panels may experience higher LID. After the initial LID, the degradation rate stabilizes to the long-term 0.4??.7%/yr trajectory.

Power warranty vs product warranty: two different guarantees

Panels come with two warranties. The product warranty (10??5 years, sometimes 25 years) covers manufacturing defects and physical failure. The power warranty guarantees minimum output at specific time points.

How much degradation changes the 25-year savings estimate

At 0.5%/yr, a 10 kW system producing 10,000 kWh/year initially produces about 231,000 kWh over 25 years ??versus 250,000 kWh at no degradation. That 7.6% production reduction translates directly to 7.6% lower 25-year savings.

On a $21,000 net cost system saving $2,500/year in year one, the undegraded 25-year estimate is about $41,500 net. With realistic 0.5% degradation modeled, it comes to about $38,000 net ??a $3,500 difference that optimistic installers often omit.

Degradation is not failure

A panel degrading at 0.5%/yr is working correctly. It is not failing. Actual failure ??cracking, delamination, junction box issues ??is what the product warranty covers and is less predictable.

Degradation projections assume a working panel. A panel that fails outright before year 25 is a warranty claim, not a degradation event. Installers with strong product warranties and responsive service teams matter more for this risk than the panel brand alone.