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Last Updated: 23rd Feb 2026 Fact-checked by Ronald Brakels
Solar panel degradation is a slow decline in panel performance over time. But for decent quality panels, it’s very slow. If you have quality panels on your roof, you can expect them to last for decades with only minor losses in power output. Degradation rates these days are so low that, so long as quality panels are used, it’s no longer something most homeowners need to worry about. But choosing panels with a lower degradation rate can still help, as it affects your system’s lifetime energy yield and long-term savings.
Solar panels come with performance warranties that promise they won’t lose capacity faster than a specified degradation rate. This is separate from their product warranties that cover defects. These warranties normally last for 25 or 30 years.
The table below shows how different brands compare on degradation rates and long-term output.
Here’s a table showing the maximum amount of degradation different panels’ performance warranties allow after the first one or two years. The degradation rate, for example, “0.35% per year” is a percentage of the panel’s original capacity.
The very best panels only lose up to 0.25% per year, while the worst on the list only loses up to 0.55% per year.
In 2026, if your panels are from a decent manufacturer, you can expect a warranted annual degradation rate of 0.4% or less.
While the maximum warranted loss for most panels now going on Australian roofs is 0.4%, you can do a little better by getting Aiko panels, which claim 0.35%, and if you’re willing to pay for a premium panel such as REC or SunPower Maxeon, they promise 0.25%.
Solar panel degradation is getting better all the time. Five years ago, 0.7% per year was typical, and there will probably be further improvements in the future.
Panels’ performance warranties allow for a steeper output drop in their first year. This is usually either 1% or 2%, but for some panels it’s 1.5%.
This is mainly due to Light-Induced Degradation (LID), which affects panels during their first day or two in sunlight, but then stops. How bad it is depends on the type of panel.
So while a panel can take a small hit to output in its first year, you can expect the deterioration in subsequent years to be very gradual.
Being exposed to the elements is a tough life. Solar panels expand and contract with changes in temperature, are flexed by wind, soaked by rain, and possibly pounded by hail. This results in the build-up of what starts as very minor damage over the years, which can include microcracks in solar cells and damage to solder joins. Both problems can reduce current flow. Well-made panels with lower rates of degradation are better able to resist these effects and so build up damage at a slower rate.
The losses build up and affect your system’s lifetime energy yield. If you choose a premium panel with a performance warranty that allows 1% degradation in the first year and 0.25% in subsequent years, and it degrades at the maximum allowed rate, it will have 92% of its original power output after 25 years.
If you instead used a panel with a performance warranty that allows 2% degradation in the first year and 0.5% in subsequent years, and it degrades at the maximum allowed rate, it will have 86% of its maximum power output after 25 years.
The increased rate of degradation results in the second panel producing 4.2% less energy over 25 years. Because the energy loss gets worse over time, half of it occurs after year 17.
Panels rarely degrade at their maximum allowed rate, so the difference between panels is likely to be even less than what the above graph shows. While having a degradation rate of 0.25% rather than 0.5% does make a difference, it doesn’t make a large one, especially over the first 10-15 years.
All else equal, the lower the warranted degradation rate, the better. But things aren’t always equal and lower degradation panels can cost more. If you want the lowest warranted degradation rates, you’ll have to pay more for a REC or SunPower Maxeon panels, and you may not consider the modest expected improvement in energy production worth the extra cost.
Let’s compare two 10 kW systems, one consisting of typical panels and one consisting of premium panels:
In 25 years, the premium panel system saves you about $1,000. Because it takes time for the effects of degradation to build up, most of the savings occur later in the panel’s life:
In the first 20 years, the premium panel system will only save you around $700 more in electricity savings than the typical panel system. However, in the next 20 years, they save an additional $1,600.
Note: I have assumed the maximum degradation that performance warranties allow, but most manufacturers include a safety buffer. So the actual real-world savings are likely to be less.
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