Is your new solar system producing the power you expected?

A common question solar owners is: “Hang on, something must be wrong – my 5kW solar system virtually never produces 5kW. What’s going on?”.

It’s a predictable and quite logical question.

The short answer is “You will typically see your system output peak at around 80% of the nominal rating. So, your 5kW system will probably peak at around 4kW”.

Now, before you panic, let me explain why this actually doesn’t matter. In simple terms, to save money on your electricity bill generating energy is more important than generating power because that’s how you get billed for electricity; as energy not power. Power is an instantaneous measurement typically expressed as Watts. Energy on the other hand is power over time, expressed as kilowatt hours. So, good solar design is about generating enough daily or annual energy to match your consumption levels and reducing the amount you have to buy.

However, let me take you through the losses and deratings to help you understand where that 1kW goes!.

Nominal ratings

All products (not just solar panels and inverters) are rated under controlled and Internationally agreed conditions.

Let’s imagine you are considering purchasing a 315 watt solar panel and you want to know how much power (watts) you can expect to get from that panel given the conditions of an “average” day.  First, you will need to understand why that panel was given the rating of 315  watts.

Solar panel manufacturers use what are called STC (Standard Test Conditions) when they evaluate solar panels in a solar simulator.  During testing, solar panels are exposed to artificial sunlight with an intensity of 1000 watts per square meter which is about average for a great sunny day, with the temperature  at 25°C  and an atmospheric density of 1.5. This is referred to as Standard Test Conditions and all panels from all manufacturers are rated under these same conditions.

As the temperature of the solar panel rises above 25C, output falls.  If fog, cloud or smog is present, power will fall. Its a nominal set of conditions for the purposes of practical testing. Conversely, if more than 1000WM2 of sunlight is available (and it does happen occasionally), output may rise. Over the course of a normal day the amount of energy available from the sun (insolation) slowly rises, peaking around midday, then progressively falling until sun down and of course in winter when the sun is lower in the sky, the insolation reduces again.

The angle of solar panels towards the sun also has a significant impact. The pitch and orientation can have a significant affect – positive and negative in terms of energy and financial returns but for the sake of this article, we will assume you are facing due North at the ideal pitch for your longitude.

System losses

So, your solar array will produce a varying amount of power depending on temperature, available insolation and air mass density.  There are now some additional losses which you also need to take into account when estimating and which we take into account when designing for you.


Manufacturer’s power tolerance

All panels have a manufacturers power tolerance, typically expressed as “plus and/or minus” from nominal peak power. A good quality panel like the LG Neon2 is “315W -0%/+3% which means the minimum power will be 315W and you may get as much as 324W.

A lower quality panel is likely to have a tolerance like -5%/+5%. This means a 315W solar panel could be between 299W and 330W.

Tighter, positive power tolerances are better, anything else can reduce system power and energy.

Temperature Loss

Counter intuitively, solar panels don’t like to be hot. Most solar panels lose about 10% of their rated power on a 25°C day, more if it is hotter. All panels have temperature derating factors, better ones have lower % losses. Interestingly, if you “heat map” a solar array on the roof, you will also notice that some run cooler than others – typically the ones around the edges that get more cooling air flow. What this means is that each panel will have its own unique performance and this is why micro inverters can yield so much extra energy.


Naturally, dirt, dung, leaves and dust can all build up over time. Anything that reduces the amount of light hitting the solar panel reduces power and energy. Typically accumulated losses are around a few percent from dirt so keeping your panels clean can really count.

Wiring losses

Solar panels are connected with wires, then a long pair of DC wires connects the solar array to your inverter. If your system uses AC Micro Inverters then the same rules apply except that it’s AC instead of DC. All wiring has small electrical resistance so electricity flowing through them will suffer a voltage drop and slight power loss. This will reduce your power proportionally, typically by around 2% which is the maximum allowed by Australian Standards.

Inverter Efficiency 

All your DC energy then has to be converted to 240V AC and this is where inverters play a role. Most inverters convert around 96% of your DC to AC although this varies according to their power curve and generally cheaper inverters are a few percent lower efficiency than the best inverters.

There are also a bunch of other factors that cause performance impacts but their affects are relatively smaller compared to these. These factors include mismatch, array oversizing or undersizing, potential induced degradation (PID), light induced degradation (LID), orientation, pitch and of course the use of poor quality materials that simply break down faster.

The 20% rule

In simple terms when you combine all these factors together you can typically expect around 20% total losses from most solar system when considering peak power. Lower quality systems will be worse.

Does this matter? No, as long as your supplier is honest and you take the time to understand what it means and what to expect. What is most important as we said at the beginning is that daily or annual energy requirements are matched because that’s what reduces your energy costs.