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. Below is the essential information you need to know about PV panels, specifically, so you can make an intelligent choice that brings value to the whole system.

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. While you may save money by paying a lower price for less-efficient panels, you should keep a few other vital factors in mind. With greater efficiency, you will get greater flexibility. 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 you plan to add panels to the installation in the future. This could impact how much space you want to leave available for the potential addition and how complicated that future project will be.

Ask your installer for an in-depth analysis of the possible configurations for your project to ensure you’re making the best decision on your investment. Commercial solar projects are customized to the customer and making small changes here and there can lead to large impacts on the overall system.


2. Degradation Rate

It might seem ominous, but “degradation” is simply an 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, you may ask: “How long do solar panels last anyway?” The lifespan of solar panels is somewhere between 25 to 40 years, depending on the manufacturer. That doesn’t mean panels stop working or generating electricity after that time. It simply means their energy production has dropped to a point beyond what manufacturers refer to as a panel’s “useful life.” For example, if a panel’s first-year, short-term degradation is 2%, it would be operating at 98% efficiency going into year two. From that point, assuming it degrades at 0.8% per year after that, it would still be working at 78.8% efficiency in year 25.

Choosing less expensive panels can help you achieve your financial goals more quickly. Though, a difference of even a tenth of a percentage point in annual degradation rate can have a significant impact on how much energy a system produces during its lifetime.

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.


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? What happens to the defective panel? 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. Realizing the short- and long-term financial impacts of these characteristics will help you make a more educated and confident decision, resulting in long-term value from the project. Choosing the appropriate panels at the beginning will save you time, money, and headaches and your solar project will operate smoothly for the next 25 years and beyond.