Researchers analyzed 16 years of data from more than 1 million PV systems in Germany and found that annual degradation is only 0.52-0.61%, about half of previous estimates. Environmental factors such as heat, frost and air pollution affect performance, while smaller systems degrade less than larger ones, increasing reliability and profitability in the long term.
Researchers from Brandenburg Technical University Cottbus-Senftenberg (BTU) analyzed 16 years of data from more than 1 million solar installations totaling 34 GW in Germany and found that the vast majority of arrays perform better than lifetime expectations.
“Solar energy grows quickly and ages better than many people thought,” said the study’s corresponding author, Diego Prieto Melo, pv magazine. “Looking at more than a million PV systems in practice, we found that production declines on average by about 0.59% per year, which is lower than many previous assumptions.”
“What makes our study different is its scale. Previous work looked at thousands of panels, but here we can track 1.25 million systems across an entire country, for up to 16 consecutive years. That allows for a more accurate assessment and lets us understand which environmental factors contribute to aging,” he continued. “This is a positive outcome for the solar industry, from households that have purchased systems to investors in mega projects. Lower degradation means greater yield and revenue over the life of a project.”
Peitro Melo also explained that the data showed that relegation is not just about age. Extreme heat, frost and air pollution all have a measurable effect on performance. In particular, decreasing air pollution over Germany has ensured that PV systems have achieved higher energy yields in recent years, which we can separate from climate variability and age-related effects.
“We found that the changing climate will be important for solar PV systems,” he added. “As extreme heat waves become more common, this new understanding of how hot and cold days affect long-term solar performance becomes increasingly important for system design.”
“We also found that larger installations tend to ramp faster than smaller ones. That’s important because it suggests that utility-scale PV cannot simply be treated as a scaled-up version of rooftop solar. Reliability and maintenance strategies have a measurably different impact on results,” he pointed out.
The dataset contained detailed information on energy production, installed power, tilt, azimuth and location. System efficiency over time was measured using performance ratios (PR) calculated according to IEC standards. The specific efficiency was derived from the energy yield divided by the nominal power, while the reference efficiency was based on incident solar radiation.
Annual production data were obtained from German transmission system operators and cleaned for reliability. To avoid complications due to capacity changes in multi-unit systems, only single-unit installations were included. Solar radiation data came from the Copernicus Atmosphere Monitoring Service at hourly resolution for each zip code. PR values were calculated using the minimum, average and maximum tilt angles, and normalized performance ratios were established using the first year of operation as a benchmark.
Degradation rates were estimated using fixed effects panel regression on the normalized PR, capturing the average annual efficiency loss. The analysis focused on four key variables: warm days, frost days, precipitation and air pollution. Hot days, defined as days above 30 C, can reduce PV efficiency, while 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 remove dust, but can also scatter light and reduce efficiency, depending on the angles of incidence. Air pollution affects performance due to the accumulation of particulate matter and dust on solar panels.
The study found that the annual decline was 0.52 to 0.61%, roughly half the average reported in previous studies, with older panels showing slower incremental decline. Lower degradation improves project profitability, reducing levelized electricity costs (LCOE) by 4.8% compared to previous assumptions. Environmental factors such as heat, frost and air pollution had the strongest impact, while precipitation had a minimal effect. Interactions between age and environment suggest that heat stress worsens with age, while the effects of frost and pollution diminish over time. Smaller installations were also found to deteriorate less than larger systems, consistent with higher failure risks for central inverters and complex setups.
“Overall, our findings support the reliability, profitability and long-term viability of PV systems, strengthening confidence in solar-powered energy transitions,” concludes Pietro Melo.
The study findings can be found in “From shine to decay: degradation of more than 1 million solar photovoltaic systems in Germany”, published in Energy economics.
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