Losses in Solar Panel Systems

Solar panel system installation in Houston TX

Solar panel systems produce electricity, but how much is lost?  This is a question we get while conducting our free solar consultations all the time.  First, let us say that your effort in investing a clean energy source such as solar is a great start!  It is the first big step toward doing the right thing for your wallet and your beloved planet. Now, it’s time to make sense of the numbers projected by your solar panel installer and understand potential losses in your solar panel system.

Solar Panel System Loss

Does installing a 9-kW solar-energy system mean you’ll be generating 9 kW of electricity? Well, not exactly. The answer to this question begins with a term commonly used in our industry, called ‘system losses.’  Photovoltaic modules, commonly known as solar panels, generate a direct current (DC) energy when exposed to sunshine. The amount of electricity a solar panel can generate (in watts, ‘W’) is determined by testing in a laboratory under strictly controlled Standardized Testing Conditions (STC), meant to represent an ideal production scenario. This laboratory-derived production value is, in essence, the most significant amount of power that a tested panel could be expected to produce on a clear, sunny day, at an ideal operating temperature of 77ºF, and when installed at the ideal tilt and azimuth (N, S, E, W)—with no shading.  Clearly, this isn’t the real world and hence why system losses occur.

Solar Panel

Residential Solar Panel System Loss

Typical rooftop residential solar installations consist of panels at non-ideal tilts and azimuths, often exposed to at least some shading from nearby trees or structures, which tend to heat to a much higher operating temperature than 77ºF when the sun is shining fully. All of this means that projections for production of an installed, ‘300-watt’ panel are rarely close to that 300-watt STC nameplate rating. Cumulative DC system losses for an installed residential solar system typically hover around 10%. This means you’re likely to get an average peak production of 280 watts out of a 300-watt panel—then, there are AC system losses. 

PV Inverters System Loss

Thanks to Nikola Tesla, electric grids worldwide carry alternating current (AC), and our modern electric appliances are designed to receive the same. Alternating current can more safely and effectively be transmitted over the long distances that we need it to travel. This means that your DC electricity generated from the sun will need to be inverted to AC before it can be either utilized by your appliances or sent to the electric grid for a bill credit. Modern PV inverters reduce overall PV generation by about 4% through the process of inversion from direct current to alternating current.

Solar Panel System Loss

Total Solar Panel System Loss

All these losses amount to an average total system loss of about 14% for residential solar-energy systems. Let’s take a closer look at our example system size. Let’s say you install 30 ‘300-watt’ panels for a total ‘DC system size’ of 9 kilowatts (kW). If your PV inverter is sized appropriately for the 9 kW of panels on your roof, you could expect to produce roughly 7.740 kW during the middle of a sunny day. 


With this knowledge, you’re ready to interpret the production values projected by your installer, and you’ll know just what to expect when it comes time to power up your system. Of course, the example figures presented here are averages. Actual production factors can vary significantly from house to house. An experienced professional solar panel installation company can help you understand the factors unique to your home and show you precisely what you should expect to produce from your rooftop solar array(s).


If your goal is to offset your household consumption entirely with solar-generated energy, understanding system losses as they factor into your home’s solar-generation potential will inform the DC system size that’s right for you. Furthermore, the software your solar installer uses to calculate this number can be a significant factor. Are you ready to take that next step and get a personalized solar panel consultation?  Sunshine Renewable Solutions is a premier solar panel installation company.  We are headquartered in Houston, TX but have local offices in all major cities in Texas.  Contact us today!

(832) 402-6835