Solar Panel Degradation: The Data Behind the 25-Year Warranty

The numbers

Premium panels degrade ~0.5%/year (REC, Maxeon guarantee 0.25–0.5%); budget panels ~0.6–1%. At 0.5%/year, a panel produces ~88% of original output at year 25; at 1%, only ~78%. That 10-point gap is real money over the system life.

What the warranty guarantees

Performance warranties typically guarantee 90% output at year 10 and 80–85% at year 25. Degradation is not linear in practice — panels lose a bit faster in year one, then stabilize. Read the exact schedule, not just the headline.

Why it matters for payback

Your 25-year savings projection assumes a degradation rate. If your panel degrades 1%/yr instead of 0.5%, lifetime output drops ~10% — worth hundreds to thousands of dollars. When comparing quotes, normalize for degradation, not just $/W.

How much do solar panels degrade per year?

Premium panels ~0.5%/year; budget panels up to 1%. At year 25 that is roughly 88% vs 78% of original output.

What is a good solar degradation rate?

0.5%/year or less is excellent (REC, Maxeon). Above 0.8% should be a red flag for residential panels.

Does degradation affect my solar savings?

Yes — 1%/yr vs 0.5%/yr costs ~10% of lifetime output. Normalize for it when comparing quotes.