German Study Finds That Solar Panel Efficiency Degrades by 0.52–0.61% Annually, About Half of Previous Estimates: This Means Better Economics, Higher Levelized Cost of Electricity, and Longer Life

     

      A large German study of solar panel degradation was recently published in the journal Energy Economics. A million solar PV systems owners were surveyed about solar installations as old as 16 years for the study, which is a much bigger study and longer time period than other studies, the biggest of which included about 4200 installations over a 2-to-7-year time period. The results indicate that solar panel degradation rates are much lower than predicted by nearly half. This means that the panels can provide more power for longer, improving their overall economic performance a little bit. A lower degradation rate also means that the panels can last longer before becoming uneconomical. Some other interesting observations come from the study. One is that degradation rates are often higher early in the panels’ lives and slow down when they get older. The study also measured the effects of things that commonly temporarily degrade panel efficiency, including heat, cold, precipitation, and particulate air pollution. The new study suggests that previous modeling overestimated degradation rates by between 20% to 50%.

“Back of the envelope,” the authors admit, “the estimated cost of degradation would decrease, compared to previous findings, by about €638 million per year to maintain installed capacity in 2040.”

     Germany has deployed about 60GW of solar since 2006. The new study involved scientists from Brandenburg University of Technology and a collaborator from University College London, and about 1.25 million large and small solar installations across Germany, totaling 34 gigawatts of capacity. Annual degradation rates of 0.52–0.61%, roughly half the average reported in prior studies. The finding that degradation rates slow through time and that larger installations degrade more quickly than smaller ones was confirmed. This is likely due to higher failure risks in central inverters and complex setups. 

     Andy Corbley of Good News Network summarizes the different variables that affect solar panel degradation at different parts of their lifespan:

“Frost, extreme heat, and air pollution affect PV panels differently at different stages of their lifespan. Extreme heat tends to reduce the efficiency of older panels more than newer ones, even though for frost and air pollution, it’s the opposite.’

     The results indicate a 4.8% reduction in the levelized cost of electricity from solar panels. This also means that less than half as much new generation needs to be installed annually to keep up the nameplate capacity.  

“Solar is growing fast and aging better than many people thought,” the research's corresponding author, Diego Prieto Melo, told pv magazine. “Looking at more than a million real-world PV systems, we found that output declines by about 0.59% per year on average, which is lower than many previous assumptions.”

“The dataset included detailed information on energy production, installed capacity, tilt, azimuth, and location. System efficiency over time was measured using performance ratios (PR) calculated according to IEC standards. Specific yield was derived from energy output divided by nominal capacity, while reference yield was based on incident solar radiation.”

     The study focused on four key variables: hot days, frost days, precipitation, and air pollution. Hot days, defined as days exceeding 30 C, can reduce PV efficiency. Frost days, defined as days below 0 C, can cause mechanical stress or delamination under extreme conditions. Precipitation has mixed effects: it can cool panels and clean dust, but may also scatter light and reduce efficiency depending on incidence angles. Air pollution affects performance through the accumulation of particulate matter and dust on solar panels. Where particulate matter is heavy, such as in deserts where sand and dust accumulate and in areas of heavy air pollution, the overall efficiency depends on whether and how much maintenance is done to clean off the panels. Precipitation was shown to have the least effect of the four variables. Heat stress on panels was found to worsen with age, whereas frost and pollution impacts diminish over time.

     The bottom line of the study supports PV solar as a viable energy generation source, which can now be seen as slightly less degrading, longer lasting, and with slightly lower cost than previous modeling.

 

 

 

References:

 

Scientists Were Wrong About How Fast Solar Panels Degrade – They May Last Twice as Long. Andy Corbley. Good News Network. March 26, 2026. Scientists Were Wrong About How Fast Solar Panels Degrade - They May Last Twice as Long

From shine to decline: Degradation of over 1 million solar photovoltaic systems in Germany. Diego Alejandro Prieto Melo, Christin Hoffmann, Iain Staffell, and Felix Müsgens. Energy Economics. Volume 157, May 2026, 109282. From shine to decline: Degradation of over 1 million solar photovoltaic systems in Germany - ScienceDirect

Survey reveals PV systems in Germany outperform lifespan expectations. Emiliano Bellini. PC Magazine. March 18, 2026. Survey reveals PV systems in Germany outperform lifespan expectations – pv magazine International