Keyur Rakholiya Degradation rate is the yearly percentage loss in a PV module's power output during field operation. An NREL review of field data by Jordan and Kurtz (2013) found a median of about 0.5% per year for crystalline silicon. Designers use the manufacturer's warranted rate in long-term energy and financial models.
Degradation Rates by Technology (2024)
| Technology | Annual Rate | Year 25 |
|---|---|---|
| Standard PERC | 0.55-0.70% | 85% |
| Premium PERC | 0.45-0.55% | 88% |
| TOPCon | 0.40-0.50% | 89% |
| HJT | 0.25-0.35% | 92% |
| Premium HJT | 0.20-0.25% | 95% |
Why Degradation Rate Matters in Design
Degradation is not a single event, it is a slow, cumulative decline driven by UV exposure, thermal cycling, microcracks, and encapsulant aging, compounding year over year for the life of the plant. Because it compounds, small differences in assumed rate translate into large differences in year-25 output.
That is why degradation rate is never treated as an afterthought in the simulation software used to model a PV module’s output over time, the assumed rate is carried through the same run that produces P50 energy estimates and feeds directly into LCOE and kWh/kWp figures used to price a bid or size a loan.
Worked Example
Take a TOPCon module degrading at 0.45%/year, generating 100 units of energy in year 1. Using the standard model, Energy at year N equals year-1 energy multiplied by (1 − rate) raised to (N − 1), year 25 output works out to roughly 90% of year 1, in line with the 89% shown in the table above for TOPCon technology.
Run the same formula at 0.65%/year (standard PERC) and year-25 output drops closer to 86-87%. Over a 25-year PPA, that few-percentage-point gap in retained output is exactly what an EYA is built to catch before it becomes a financing problem.
Key Takeaways
- Module degradation = annual power decline.
- 0.4-0.7%/yr modern modules; HJT lowest.
- Year-25 cumulative: 85-95% of original.
- Required input for LCOE and EYA calculations.
- Premium HJT carries lower-degradation warranties.
Related Reading
Degradation rate only turns into a real number once it is run through a full energy yield model, the same modeling work that underpins the Complete Guide to Solar Design Services in India, where EYA and PVsyst deliverables are covered in more depth.
On the financing side, degradation assumptions move project economics the same way engineering inputs move competitive bids, as shown in SECI Tariff Math, How Engineering Inputs Move Bids by 4 Paise/kWh. If you’re evaluating who builds these yield models for your portfolio, How to Choose a Solar Design Partner lays out the questions worth asking about degradation and warranty assumptions before signing off on a design partner.
End-of-life modules are a growing issue; see India’s solar waste outlook to 2047.
Frequently Asked Questions
4 commonly searched questions about Degradation Rate.
What is a normal solar panel degradation rate?
Do TOPCon and HJT modules degrade more slowly than PERC?
What causes PV module degradation?
How is degradation used in energy yield modeling?
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