Solar Panel Efficiency Explained

In this blog, we explain what solar panel efficiency is and why it matters. Ankit Vyas, the MD of Green Ocean Solar, shares his research and real-world experience to keep it simple.

Most people see the numbers printed on solar panels – 18%, 20%, 23%—and wonder what they actually mean. One family might say, “We installed 20% efficient panels.”

Another might proudly say, “Ours are 23%.”

But unless we understand what solar efficiency really is, these numbers feel abstract.

Imagine standing under the sun on a bright afternoon. You can feel the heat on your skin. Now imagine a solar panel standing in that same sunlight. Instead of feeling warm, it is trying to capture sunlight and turn it into electricity. Its efficiency is simply a measure of how much of that sunlight it can convert.

Read more to know about solar efficiency and types of panels based on efficiency. 

What is Solar Panel Efficiency?

Solar panel efficiency tells you how much sunlight a panel can convert into electricity. It is also called solar power efficiency or solar module efficiency. 

Every solar panel contains many small solar cells. These cells absorb sunlight and generate electric current. The better they convert sunlight, the higher the efficiency.

Most panels sold in India today range between 18% to 23% efficiency, depending on the technology and materials used.

Why Solar Efficiency Matters?

Solar efficiency matters because it directly affects how much power your rooftop system can produce. 

Higher efficiency means:

• More efficiency 
• Better performance during winters and cloudy days
• Higher savings over the years
• Faster break-even period
• Better output during peak usage times

If two homes have the same rooftop size but one uses high efficiency solar panels, that home will generate significantly more power.

Efficiency becomes even more important when:

• Roof space is limited
• Power usage is high
• You want maximum savings
• You want better performance with fewer panels

Why Do Solar Panels Have Different Efficiencies?

The efficiency of solar panel depends on various things. It depends on:

• The type of solar cell
• The purity of silicon
• How the panel is engineered
• Temperature tolerance
• Coating layers
• Electrical resistance

Newer technologies like Mono PERC, TOPCon, and bifacial cells offer higher efficiency because they capture more sunlight and reduce energy loss.

How Solar Efficiency is Calculated?

Formula – 

Solar Panel Efficiency = (Power output / Solar energy input) * 100

Let’s break it down.

If the sunlight falling on a panel is 1000 watts per square meter, and the panel generates 200 watts:

Efficiency = (200 / 1000) × 100 = 20%

This is how manufacturers create efficiency ratings.

What Do 18%, 20% and 23% Mean?

These three solar efficiency levels dominate the Indian market. Here’s a detailed comparison to help you understand the real-world differences.

18% Efficiency – Standard Panels

Panels with 18% solar efficiency are reliable, affordable, and widely used. These are typically polycrystalline or basic mono PERC models.1 kW using 18% panels may require 80–90 sq. ft of space. Even though their solar power panels efficiency is lower than other types, these panels still offer strong performance when cleaned and installed properly.

Who Should Choose 18%?

• Homes with large rooftop space
• People who want lower upfront cost
• People who want basic solar power without premium pricing
• Areas with good sunlight

  Pros of 18% Efficiency Panels

• Affordable
• Easy to source
• Good for standard usage
• Long lasting performance

Cons of 18% Efficiency Panels

• Not ideal for small rooftops

20% Efficiency – Balanced & Reliable

These panels offer a strong balance of affordability and performance. Most Mono PERC panels fall in this category. 1 kW using 20% panels needs 70–75 sq. ft of space. For many households, 20% is the sweet spot. You get modern technology without paying premium prices.

Who Should Choose 20%?

• Homes with medium sized rooftops
• Households with higher electricity needs
• People looking for value + efficiency

Pros of 20% Efficiency Panels

• Better performance in low light
• Lower area requirement
• Good ROI
• Good for both homes and small commercial setups

Cons of 20% Efficiency Panels

• Need proper installation to get maximum benefit

23% Efficiency – High Efficiency Solar Panels

These are the most efficient solar panels in the market today. 23% efficiency panels are made of TOPCon, Bifacial solar panels, and N-type cells. These panels are best for customers who want premium performance. 1 kW using 23% panels requires 55–65 sq. ft of space. These are the most efficient solar panels in India for roof-constrained customers or premium installations.

Who Should Choose 23%?

• High-consumption homes
• Areas with partial shade
• Commercial rooftops
• Customers who want maximum savings

Pros of 23% Efficiency Panel

• Maximum efficiency
• Highest output in low light
• Excellent heat tolerance
• Long-term performance

What Affects Solar Efficiency in India?

Here are a few factors that affect solar efficiency:

1. High Heat & Temperature

India has long, hot summers. Solar panels work best in sunlight, but their efficiency drops when temperatures rise too much. Excess heat reduces voltage inside the cells and lowers overall output. Even with bright sunshine, panels may generate 5–10% less power during extremely hot afternoons.

2. Dust and Pollution

Dust, road pollution, and airborne particles often settle on panels. This blocks direct sunlight and reduces the amount of light absorbed by the solar cells. Cleaning panels every 10–14 days improves performance and efficiency. Check out: A Detailed Solar Panel Cleaning Guide to learn more. 

3. Monsoon and Clouds

Monsoon season brings dense clouds and humidity. Clouds reduce the intensity of sunlight, while humidity scatters light before it reaches the panels. This lowers solar power generation. 

4. Wrong Tilt Angle

Solar panels need to be installed at the correct tilt to capture maximum sunlight. If the angle is too flat or too steep, sunlight hits the panel less effectively. This reduces power output. India’s ideal tilt varies by region, but most rooftops benefit from a 20–25 degree angle for better efficiency. 

Also read our latest blog on solar trackers: What is it, and How it Works. 

5. Shading

Even a small shadow can significantly drop efficiency because the cells are connected in series. Shading one cell can reduce output of all cells in that string.

6. Poor Installation

Incorrect wiring, bad spacing, and wrong alignment reduce solar module efficiency by 10–15%. This is why choosing the right installer matters as much as the panel.

How to Increase Solar Panel Efficiency?

You can boost your solar power panels efficiency with simple actions.

• Clean the panels regularly to increase efficiency by 10-15%
• Adjust the solar panel angle yearly or use fixed tilt based on expert design
• Avoid placing panels behind the water tanks 
• Use good quality inverters and wiring as better wiring reduces resistance and improves efficiency
• Always install the panel through certified experts.

Pricing Difference – 18% vs 20% vs 23% Panels

The prices of solar panels vary depending on the type of solar panels selected. Here are typical price ranges depending on the efficiency:

• 18% panels – ₹45–50 per watt
• 20% panels – ₹50–65 per watt
• 23% panels – ₹65–75 per watt

Higher efficiency costs more but generates more power over the years. 

Conclusion

Solar efficiency is important, but it shouldn’t be the only factor guiding your solar decision. Even an 18% panel can perform exceptionally well when installed correctly, kept clean, angled right, and protected from shade. In comparison, a 23% high-efficiency panel can still underperform with poor installation or maintenance. True long-term value comes from a mix of good efficiency, strong build quality, and reliable after-sales service. Check out our Solar panels in Bhopal service page to earn more or get in touch with us.