How Efficient Are Solar Panels At Producing Solar Energy?

Renewable solar energy has been around for generations. But in recent years, it’s gained more attention due to the impending threat of climate change and growing electrical demands in Australia. In the renewable energy supply market, NSW is a leading developer of large-scale solar projects.

According to statistics, solar panel use in NSW has doubled from 5% in 2015 to 12% in 2019. These solar farms support employment and help diversify the state’s energy mix, cutting down future costs for large-scale solar developments.

Let’s discuss solar panel efficiency in detail.

Table of Contents

How Does a Solar Panel System Generate Electricity?

A solar power system is an arrangement of various solar components depending on your building specifications. From the solar panel that converts sunlight into electricity to a solar inverter that converts electricity from DC to AC, every component has a function.

Your house will draw electricity from the grid when your PV solar system cannot generate enough current to meet your energy needs. You can also install solar PV systems with battery systems as an alternative to reduce electrical bills.

What are the Common Applications of a Photovoltaic System?

Solar photovoltaic panels are composed of the most efficient solar cells that can absorb light energy resulting in a direct current. This setup is connected to the main grid, directing the current to your home for consumption, and exporting the rest to the power grid or a battery.

As listed by the National Renewable Energy Laboratory, photovoltaic panels are now being engineered with new generation technologies for:

  • Generating utility-scale power across solar farms
  • Giving solar power access across remote locations
  • Supplying renewable power to spacecrafts and rovers
  • Providing auxiliary power to vehicles and aircrafts

According to research, the use of perovskite solar cells has become viable to tera-watt solar development. The study shows that perovskite materials show excellent charge-carrier mobilities and light absorption capabilities.

Types of Solar Power Systems

On-Grid Solar System

Australia has the highest uptake of solar globally, with around 30% of homes using rooftop solar photovoltaic systems. A grid-connected solar panel system is a major transition from fossil fuels, reducing the chances of air pollution.

In a solar panel system, sunlight is absorbed by high-efficiency solar cells, resulting in energy production in a phenomenon also known as the Photovoltaic Effect. 

Next, a solar inverter (string, micro, or hybrid) converts the DC current into electricity, which is then distributed throughout the building. Any excess electricity is exported to the grid.

To enhance a solar panel’s efficiency, you can opt for a hybrid inverter for better power output. A hybrid functions as a string and battery inverter within a single unit, offering both on-grid and off-grid capabilities in a solar power system.

Off-Grid Solar System

Off-grid solar modules can generate electricity without relying on the power distribution grid using a battery bank. These systems keep your electrical system self-sufficient, addressing your energy needs when there is not enough sunlight.

When your battery is at full capacity, it releases the stored power across the inverter, converts it, and powers your household appliances. Additionally, you can maintain a backup power source by installing an off-grid diesel generator.

As a result, an off-grid solar power system keeps a home or business operational outside of daylight hours and during times of emergency.

How Energy Efficient are Solar Panels? 

An efficient panel system can unlock long term savings on your electricity bills by up to $600 a year, especially for low income households. In fact, the energy rebate swap is applicable to many eligible property owners in NSW.

With a solar PV system, you can generate renewable energy and significantly reduce your electricity bills. Most solar panels have a large electrical output, allowing you to power your home appliances, the rest gets exported back to the grid.

For instance, in Victoria the average energy consumption rate is around 12 kilowatt hours of electricity per day. A 1.5 to 3 kilowatt solar PV system can generate between 45-90% of this, though this varies based on location and weather patterns.

Another good example is a highly efficient 6.6 kilowatt solar power system installed on a north-facing roof in Sydney. Such a setup can produce an average of 26 kilowatt-hours of electricity a day or 9,783 kilowatt-hours of electricity a year.

As a result, an on- and off-grid solar panel system can drive down your annual electricity bill by reducing the amount of power you draw from the grid.

Rooftop Solar Panels

What Factors Affect Solar Panel Efficiency?

The average lifespan of a solar panel system is between 10 to 20 years, its output decreasing by 0.5% every year. The annual output of a solar panel system depends on many factors, including its design and orientation, and your area’s temperature conditions.


When installing solar panels on the roof, it’s best to have them facing north for best access to the early morning sun. But in places where there’s limited roof space, you can install the panels facing in other directions, like the west to access afternoon sunlight.


Changes in temperature have an impact on solar panel efficiency. Note that temperature coefficients will vary between different panels. In ideal conditions, the nominal power of PV solar modules indoors is around 25°C.

According to research, a solar PV system loses efficiency as the temperature rises, and becomes more efficient when the temperature drops. In all cases the efficiency of a solar panel decreases as temperature conditions rise.

Buildup on Panels

Any dirt or grime that accumulates on the surface of PV panels can reduce light transmission, resulting in loss of solar power. This power loss that occurs due to buildup is a variable component as many factors can contribute to dust and debris. 

Dirt or dust buildup can also change the incident angle of the light rays, causing them to spread unevenly across the surface. Under the same conditions, several studies have shown that dirty solar panels can lose 60% of their energy output in dust-prone areas. 


Shading by trees, buildings, and other objects in an environment can impact the light received on a solar panel surface. Total or partial shading conditions cause power losses when a whole series of cells get virtually blocked by an object.

Additionally, when a solar cell that’s spread across a panel is shaded, the preceding cells will begin to heat up, creating a hot pocket. This can potentially damage your solar panel, decreasing its power output over time.

Efficiency rating

The efficiency rating of a solar panel helps define the amount of light transmission across the surface. It tells you how much sunlight hitting a solar panel is turned into usable energy or electricity. Even the power output rating is a useful parameter to determine the solar panel output often measured in watts.

Note that different solar panel manufacturers and brands will have different efficiency ratings, based on the model and materials.

Do solar panels lose energy efficiency in the winter?

Solar panels don’t lose their efficiency in the winter. In fact, low temperature conditions can improve solar panel efficiency. Cold weather cannot affect panel performance as the system relies on light radiations, and not heat.

Even during winter, solar panels receive the same amount of UV light from the sun as they do in the summer, especially when the skies are clear. However, a windy day can visibly reduce light transmission, lowering solar cell efficiency.

Can Solar Panels Function During Heavy Rainfall?

Though a cloudy sky is a telltale sign of rainfall, your solar panels will still operate during a heavy downpour. The rain even helps wash away dirt or soil stuck to your panels, enhancing its operational efficiency.

However, the amount of electricity produced is dependent on cloud cover and energy rating of solar panels. This means the output is determined by the angle of the sun and intensity of the incoming solar beams.

Is the Energy Efficiency of Solar Panels Affected by Hail or Snow?

Winter climates are not a problem for solar installations unless the solar panels get entirely covered in snow, reducing solar output. Otherwise, cold conditions are viable for photovoltaic performance, producing more solar energy.

Are High Efficiency Solar Panels Value for Money?

Most second generation photovoltaic systems or thin film solar panels will capture adequate sunlight to power your home, office, or commercial space. In fact, solar power reduces the amount of electricity you need to buy from your energy company, including:

  • Driving down your energy bills 
  • Reducing your carbon emissions 
  • Promoting a self-sufficient system  
  • Improving the resale value of a property

Key Takeaways

Get in touch

Depending on your building specifications and the type of solar panel system, the most efficient solar panels can regulate cell temperature for more energy output.

Looking for residential solar panel manufacturers? 

HCB Solar can help you find the right solar panel system, suitable to your energy needs. We have a dedicated local team who will examine your unique property and help you achieve solar power efficiency.

Contact us our experienced solar installation team today!

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