Updated 10/31/2022 for clarity and new information

As you research and compare PV panel options for your business, you should be aware of the characteristics of commercial solar. Commercial solar projects tend to be larger and require more investment than typical residential projects. Therefore, it is important to carefully evaluate the project in its entirety and pay attention to the details. Learn more about commercial solar projects.

Specifically looking at solar panels, the main differentiators between brands are the performance details and warranty terms. Below is the essential information you need to assess when choosing the panel that is the best option for your project. 

1. Solar Panel Efficiency

The conversion efficiency of a photovoltaic (PV) cell, or solar cell, is the percentage of the solar energy shining on a PV device that is converted into usable electricity. In most cases, you want high efficiency to get the most production possible for the size of the panel.  

The efficiency of a solar panel is determined by the type of panel. There are three main types: monocrystalline, polycrystalline, and thin-film. We’ve created a very simple comparison table below. For more details, check out Energy Sage.

Panel Type  Monocrystalline  Polycrystalline  Thin-film 
Construction  Made from a single silicon crystal cut into wafers  Made from multiple silicon crystals melted and poured into a mold, then cut into wafers  Made from CdTe (cadmium telluride), a-Si (a-silicon), or CIGS (Copper Indium Gallium Selenide) 
Efficiency  15% to 20%  15% to 17%  8% to 10% 
Cost  High  Medium  Low (depending on materials) 
Advantages  High efficiency  Balance between cost and performance  Flexible and thin 
Disadvantages  High cost    Low efficiency 

While you may save money by paying a lower price for less-efficient panels, you should keep a few other vital factors in mind. The same size panel that has a higher efficiency will produce more energy than the panel with a lower efficiency. This then allows you to either

  • maximize your power generation in the space available, or
  • have the same power output with fewer panels and consequently less space.

Fewer panels also mean lower installation costs, and it’s easier to add more panels in the future if your energy needs change. However, this is all dependent on the total energy required for the application, the square footage available to house the PV panels, and the physical size of the panels themselves. A higher per unit cost may make sense if you are buying fewer units overall.

Also consider if your electric utility limits solar system size. Manipulating the panel efficiency and wattage can get you as close as possible to the cap established by the utility. Making small changes here and there can lead to large impacts on the overall system, so be sure to ask your installer for an in-depth analysis of your solar array. 


2. Degradation Rate

Degradation is the industry term used to describe the drop in output that all solar panels experience over time. All solar panels degrade, but they don’t all degrade at the same rate. In their first year of operation, panels typically undergo short-term degradation ranging from 1% to 3%. After that, solar panel performance declines by an average of 0.8% to 0.9% each year. 

Now the next question may be, “how long do solar panels last?” Depending on the manufacturer, the life of a solar panel is anywhere between 25 to 40 years. This means that the manufacturer has determined that the panel will produce the required amount of energy for that many years. Once it surpasses the rated life, the solar panel will still generate electricity but at a lower rate. For example, if a panel’s first-year, short-term degradation is 2%, it would operate at 100% efficiency in the first year, and then at 98% going into year two. Assuming it degrades at 0.8% each year thereafter, it would still be working at 78.8% efficiency in year 25. 

The annual degradation rates between panels may not seem like a big difference, but even a couple tenths of a percentage point can have a significant impact on lifetime production from the system. Consider the size of your system and model the expected production over time to get a realistic idea of performance.  

3. Durability

Durability needs will vary depending on the location – a coastal area will see high winds and salt water, whereas a mountain top might see more snow and cold temperatures along with high winds. Check to see if your chosen panels operate well in harsh conditions like high winds, extreme temperature fluctuations, and moisture. If the project location is in a temperate area with moderate weather conditions, panel durability may not be one of your top concerns.

Durable components are important for solar installations because they sit outside exposed to the elements. If a PV panel cannot operate in certain conditions, it will either fail or produce less energy than it is supposed to. Both situations negatively affect the performance of the system and will cause reliability issues and/or not meet your energy needs. Almost all panels on the market are certified to IEC 612125, the industry standard for durability, so this should be an easy box to check. 


4. Real-World Performance

It is essential to know the difference in performance of solar panels in the real-world versus the performance measured under ideal, lab-like circumstances. Solar companies should be able to give you the performance of the panels based on the location and position of the panels, weather history records in your area, and average sunlight throughout the year. If they have installed units near your area, you may even be able to ask about actual performance they’ve seen from those panels.

Another factor to look at is the projected performance of the panels in high temperature conditions. Like most electrical systems, solar panels operate less efficiently as temperatures rise. This would be a concern for projects in hotter locations that have frequent high temperatures above 80°F. Accounting for performance fluctuations in your production calculations will give you a more accurate expectation of energy generation and a better payback estimate.


5. Warranty Coverage

Hopefully, your panels will work without issue for their rated life. However, nothing is 100% perfect and sometimes products have defects. As such, almost all solar panels come with two kinds of warranties:

  • a product warranty that covers the product against defects; and
  • a power warranty that covers a minimum promised power rating.

These two warranties can either be for the same period (25-year combined) or for different periods (10-year product, 25-year power) and may or may not include the service required to replace defective or underperforming panels. Once you confirm the warranty length, the next step is to confirm what exactly is covered under the warranty. Are damages as a result of weather-related events considered under warranty? What if an animal damages the panel?

Finally, ask about the warranty process. How does the company handle warranty orders and what is a reasonable timeline expectation? What will you, the customer, be responsible for and what will the company be responsible for? Will you need to pay for shipping or the replacement service? Does it come with technical support? Knowing all of this before a solar panel needs replacing will help you smoothly navigate a warranty claim and get the problem fixed as soon as possible.

Commercial solar projects can be a great investment for your business, providing affordable, clean energy right on the property. When evaluating your project, carefully consider which PV panel is the best for your installation. The panel’s efficiency, durability, performance, and warranty coverage are significant factors that often go overlooked. Making an educated decision on the solar panel will give you confidence that the system will perform as expected over its entire life.