How Efficiently Do Solar Panels Work? What Solar Cells Are the Most Efficient? A Full Guide to Solar Panel Efficiency

ven newbies to solar can probably assume that PV panel efficiency is something worth going after. Many of them, however, struggle to get a clear picture of what it actually is, what efficiency rate can be considered sufficient, and how to choose solar panels offering the best price to efficiency ratio. Below, we'll break down everything you need to know about solar panel efficiency.

What is meant by solar panel efficiency?        

Before we jump into the topic at hand, we need to go over some of the PV panel basics. Solar panels consist of small solar cells (most commonly made of silicon) which generate electricity by collecting sunlight; this process relies on the phenomenon called the photovoltaic effect. To put it simply, the light hitting the surface of a panel forces the electrons inside the solar cells to move, which creates an electric current. The efficiency of a solar cell, also called solar cell conversion rate, shows how much of the light reaching it can be absorbed to set the cell electrons in motion.

How efficient are solar panels today?

For both residential and commercial solar panels on the market, the efficiency of the cells is between 17% and 22% on average. As scientists continue to develop solar cell technologies, the efficiency of some experimental cell prototypes steadily approaches 50%. For example, scientists from the Fraunhofer Institute for Solar Energy Systems ISE have designed a solar cell with an efficiency of 47.6%. This might not look like much, but it’s quite an achievement given that the first silicon solar cells developed by Bell Labs researchers in the middle of the 20th century were only about 5% efficient.

The current efficiency of solar cells impresses even more when you discover that the efficiency of fossil fuel power generation in the United States averages only 36%, as 64% of the energy used in the production process is discharged into the atmosphere in the form of waste heat.

However, it should be noted that the efficiency of solar panels is close to, but not exactly the same as, the efficiency of solar cells it comprises. Such factors also determine the efficiency of a panel as cell layout, panel busbar configuration, etc.

Will solar panels ever reach 100 efficiency?

There is scientific consensus that 100% solar panel efficiency is impossible, and now we’ll explain why.

All materials are categorized into three groups according to their level of electric conductivity: conductors, semiconductors, and insulators. Conductors are materials that let electric current flow easily through them (for example, copper, silver, and aluminum), and insulators are substances that do not allow the current to flow through them (e.g., plastic, wood, and rubber). Semiconductors are somewhere in between: they do have electrical conductivity, but only under specific conditions. Some examples of semiconductors are silicon, gallium arsenide, and germanium.

Solar panels can only use semiconductors. Insulators aren’t suitable for solar cell production due to the strong covalent bonds between the atoms - sunlight wouldn’t be able to knock the electrons in PV cells off their standard positions. Conductors can’t be used for PV panels either because the outer electrons are loosely bound with their parent atoms within the cell and easily set into chaotic motion, which makes it impossible to create an electric field.

Therefore, semiconductors are the only efficient option for PV panel manufacturing. But the thing is, the sun emits solar irradiance as electromagnetic waves over a wide range of wavelengths, and semiconductors can only absorb a limited amount of them. That is why silicon solar panels can efficiently capture wavelengths from approximately 400 nanometers to 1100 nanometers, which roughly correspond to the visible spectrum and some parts of the infrared spectrum.

The efficiency of a single-junction solar cell cannot go over the upper bound, called the Shockley-Queisser efficiency limit of 33.7%. That’s why in recent years, a major focus of research has been the development of multi-junction cell technologies to span the solar spectrum that can be absorbed by solar panels (we will cover some of the most efficient cell architectures below.) Nevertheless, increasing solar panel efficiency to 100% is not even theoretically possible.

Performance comparison by panel type

Several types of solar panels in the market differ in manufacturing methods, which leads to a difference in PV panel efficiency. Below is a comparison of the most common ones.

Crystalline silicon solar efficiency

We naturally start with crystalline silicon solar panels, which currently take up approximately 90.9% of the global market of photovoltaic devices. Silicon has been a dominant and the most efficient material for PV panel production since the 1950s and still holds the lead because of its wide availability, superior electronic and optical properties, and cost efficiency. Crystalline silicon solar panels fall into two categories: monocrystalline panels and polycrystalline panels.

Monocrystalline solar panel efficiency

Monocrystalline solar panels are the most efficient option among the panels available to a wide range of customers; you can easily recognize them by their black color and rounded-edged solar cells. These panels currently account for around 84% of global crystalline silicon PV panel production.

As the name implies, mono-Si solar cells are fabricated from single large crystals of silicon using the Czochralski growth method. First, the silicon material is melted in a quartz container, and then a small silicon seed is dipped into the melt. The container and the seed crystal rotate in opposite directions, after which the seed is slowly pulled upwards from the melt. During this process, the crystal diameter gradually increases, forming a large silicon ingot, which constitutes the basis for producing solar wafers and solar cells for a PV panel.

So why are monocrystalline solar panels deemed the most efficient among commonly available PV panel options? Since monocrystalline cells are made of a single silicon crystal, the electrons within them have more room to travel, and nothing limits their movement. That is why monocrystalline PV panels can absorb more sunlight resulting in higher efficiency. Generally, the efficiency of monocrystalline panels is between 17% and 22%, making them an ideal choice for homeowners looking for the most efficient panels on the market.

Polycrystalline solar panel efficiency

Polycrystalline solar panels, or multicrystalline panels, are a slightly less efficient but more affordable crystalline panel option. These panels use multiple silicon crystals in a single solar cell and can be distinguished by their speckled blue appearance.

Polycrystalline panel manufacturing involves purifying metallurgical-grade silicon containing about 3% impurities to obtain solar cell grade silicon suitable for efficient solar panels. There are several ways to do that, the most widespread being the Siemens process. It involves melting technical-grade silicon with hydrogen chloride to create intermediate material trichlorosilane. Then the trichlorosilane gas is thermally decomposed on red-hot silicon rods. The Siemens technique allows the manufacturers to obtain "six-nine" (99.9999%) pure silicon suitable for solar panel production.

The fabrication method of polycrystalline solar panels is cheaper and produces less silicon waste, but it also results in lower efficiency. Poly-Si cells consist of numerous silicon crystallites or grains, and the boundaries of these grains make it harder for light and heat to travel within the cell, that is, decreases its conductivity.

Over the past years, scientists have been actively working on increasing the efficiency of polycrystalline panels, including by reducing the density of the cell grain boundaries. The efforts were not in vain - the poly-Si panel efficiency is significantly higher than it used to be a couple of years ago. Even though most polycrystalline panels on the market are only 15% to 17% efficient, some newer options reach an efficiency rate of over 20%, which brings them up to the same league as monocrystalline panels.

Thin-film solar panel efficiency

While crystalline solar panels remain an undisputed market leader, one more technology is gaining popularity. Thin-film solar panels are generally less efficient but offer several competitive advantages over conventional PV panel options.

These second-generation solar cells are made by depositing one or more thin layers of photovoltaic material on a substrate, such as plastic, metal, or glass. This method allows for manufacturing of highly flexible and lightweight panels, making them perfect for installation on curved surfaces.

The most common semiconductors for thin-film solar cell production are amorphous silicon (a-Si), cadmium telluride (CdTe), copper indium gallium selenide (CIGS), and gallium arsenide (GaAs). The efficiency of thin-film solar panels varies depending on the type of cell materials used and can be anywhere between 7% and 18%. However, cadmium telluride panels, which are by far the most common thin-film solar panel type, have already reached 22.1% cell efficiency and 19% panel efficiency.

Perovskite solar cell efficiency

Perovskite solar cells are made of perovskites - a naturally occurring mineral of calcium titanate. They hold great promise as the most efficient solar cells but still have several challenges to overcome.

These solar cells are fabricated using simple but efficient additive deposition techniques: ink-jet printing, screen printing, spin coating, spray coating, and a number of others. Easy and cheap solar cell manufacturing results in lower costs, creating an excellent potential for broader adoption in solar panel production.

Perovskite solar cells are notably more efficient than their competitors due to their unique crystal structure. These cells deliver an efficiency rate of 24%, leaving even monocrystalline panels behind. But even more outstanding results were achieved by combining silicon and perovskite solar cells: they absorb different parts of the solar spectrum, so together, they can harvest much more sunlight which translates into more energy. The efficiency of perovskite-on-silicon-tandem cells has reached 30.1%.

However, some issues still need to be resolved before perovskite panels get commercialized on a large scale. For example, perovskite cells suffer from poor long-term stability against external environmental factors such as heat and humidity.

Other factors affecting solar panel performance

As important as solar cell type is, there are plenty of other considerations affecting the efficiency of solar panels. Here is a review of the key factors contributing to how efficient your solar panels will be.

Location and weather: lack of direct sunlight compromises efficiency

Naturally, the efficiency of solar panels depends on the amount of sunlight they receive. Although PV cells can generate electricity even by collecting indirect sunlight, direct solar irradiance works significantly better. On a partly cloudy day, a solar panel averagely loses 10% to 25% of its standard efficiency, while a thick layer of overcast can decrease solar panel efficiency by up to 50%.

Consequently, solar panels are much more efficient when installed in regions with abundant sunshine. But how does one determine whether their location is sunny enough for a solar panel system? This can be gauged by a metric called peak sun hours. A peak sun hour is one hour in which the intensity of solar irradiance averages 1,000 watts of energy per square meter. In the United States, any location that enjoys more than four peak sun hours a day is considered suitable for installing solar panels. But your area isn’t especially sun-rich, it doesn’t mean you have to deny yourself the opportunity to get a solar panel installation; it just means that your panels will be somewhat less efficient.

Shading: even a minor obscurity can slash the efficiency dramatically

Whereas we can’t control the weather, we can ensure our solar panels aren’t shaded by nearby obstructions such as trees or buildings. This is especially true if you have a centralized string inverter instead of microinverters. In a PV panel system with a string inverter, even a single shaded solar cell affects the entire system’s efficiency.

But even if you install microinverters or power optimizers, avoiding shade is still essential if you want to keep your panels as efficient as possible.

Orientation and tilt determine how efficiently the panels capture sunlight

Solar panels work at maximum cell efficiency only if installed facing the sun. The sun shines directly over the Equator most of the year, which means south-facing panels would be the most efficient in the northern hemisphere. However, the panels can also work efficiently on the east- and west-facing roofs, for example, if you’re at home only mornings and evenings and don’t have a battery to store the energy your solar panels generate at noon.

The tilt of solar panels is another factor you should definitely pay attention to. The panels collect sunlight most efficiently if the rays are perpendicular to their surface. The optimum tilt angle will vary according to latitude, but it is somewhere between 30 and 45 degrees for most American homeowners.

Solar panel temperature: the heat lowers the efficiency

While the formula of "the more, the better" works for the amount of sunlight, the opposite is true for the temperature of solar panels. This one may seem counterintuitive, but heat negatively affects solar panel efficiency.

Solar panels generate electricity through the photovoltaic effect, where the electrons excited by sunlight move around the circuit to generate current. But when the temperature rises above a certain level, the heat prematurely excites the electrons within the cell, meaning the panels won’t collect much energy from the sunlight when it reaches them. Thus, even if a solar panel receives the same amount of the sun in cool and hot weather, the panels will be less efficient in the latter case.

The manufacturers measure solar panel efficiency using Standard Test Conditions (STC), defined by a panel operating temperature of 25 degrees Celsius. For every degree above that level, the efficiency of solar panels declines by a certain percentage – this percentage is called a temperature coefficient. The temperature efficiency of most solar panels ranges between -0.3% / °C and -0.5% / °C, while the most efficient HJT (heterojunction) cells reach a coefficient of -0.25% /°C.

Cutting-edge PV cell technologies with the highest efficiency

The efficiency of solar panels increases at an unprecedented pace; most high-quality solar panels today are around 22% efficient. This is mainly due to the developing of high-end N-type heterojunction (HJT) cells combining a traditional crystalline technology with thin-film technology. The efficiency rate of heterojunction panels currently stands at around 21%, but their conversion efficiency reaches 26.5%.

The PV panel market is also witnessing a rapid proliferation of panels featuring efficient IBC cells with positive and negative electrodes placed on the back of their surface, resolving efficiency losses due to shading. The IBC cells have achieved a recorded efficiency of 26.7%.

The most advanced cell architecture is TOPCon (Tunnel oxide passivated contacts), which adds an ultra-thin oxide layer between the cell substrate and silicon, resulting in more efficient light absorption. The upper limit for TOPCon cell conversion efficiency currently stands at 28.7%.

Top 5 most efficient panels

Advanced solar cell technologies are actively jumping into the residential market, making home solar panel systems increasingly more efficient. So what companies offer the most efficient residential panels today? Check out our solar panel efficiency comparison below.

SunPower M-Series

American premium manufacturer offers the most efficient residential panels on the market. Its first M-series panel, introduced in 2022, features a wattage output of 420W to 440W and boasts a record efficiency rating of 22.8%. However, unparalleled efficiency comes at a high cost of around $3.48 per watt.

SunPower Maxeon 3

Another SunPower high-performance panel takes second place. Maxeon 3 employs highly efficient IBC cells manufactured from n-type silicon. Available in wattages from 370W to 400W, the panel has an efficiency rating of up to 22.7%.

REC Alpha Pure-R

Norway-based REC Solar offers a premium Alpha Pure-R panel featuring high-end heterojunction cells. The panel provides a power output of up to 430 W and comes with a maximum efficiency of as much as 22.3%

Jinko Solar Tiger Neo

Jinko is the leading solar panel manufacturer fabricating n-type TOPCon solar cells – the market's most efficient PV cell technology. Rated from 460W to 620W, its flagship Tiger Neo panel is designed for residential, commercial, and utility-scale systems. The conversion efficiency of a Tiger Neo panel reaches 22.3%.

Panasonic EverVolt

Japanese PV panel manufacturer offers an all-black heterojunction panel with a maximum power output rating of 430 watts and an efficiency of up to 22.2%. In addition, the panel has one of the industry's lowest degradation rates – it is expected to operate with at least 92% efficiency at the end of a 25-year warranty.

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