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How important is the efficiency of solar panel?

Posted by Chris Jardine on 13 June 2013 at 10:05 am

A more efficient solar panel is a better one, right?  Well arguably, but it doesn’t necessarily make it the most appropriate choice for use in any given situation. That's why I'm starting my series on what is the ‘best’ solar panel by looking at the sometimes confusing issue of panel efficiency.

The efficiency of a solar panel is defined as the electrical output compared to the intensity of the incoming radiation. So a typical 15% efficient panel would convert 15% of the solar energy landing on its surface into electricity. However, in some ways efficiency doesn’t really matter. If one panel is less efficient than another you just need a larger area to produce the same amount of electricity. If available space wasn’t an issue, efficiency would be irrelevant and you’d look at other factors such as cost or reliability.  Of course, the real world isn’t like that, and in most cases available space is very much an issue, which means the relationship between efficiency and benefits needs to be unpicked more carefully.

The first reason cell efficiency is important is that it is a measure of the technological development that has gone into a product.  For crystalline silicon cells, higher efficiency cells use higher grade of silicon, and their design has been refined to maximise output.  For example, Sharp recently switched their multi-crystalline cells from ones with two collector wires on each cell to three, with a subsequent improvement in efficiency of about 0.1%.  Such technological R&D and implementation, although small and incremental, does separate progressive and high quality manufacturers from those just churning out modules for the market. At the top end of the efficiency scale Panasonic and Sunpower have each adopted completely novel cell designs to achieve their market leading cell efficiencies of 20%.

So does all this count for anything? There is a broad correlation between efficiency and cost per kWp. For large roofs, using a more efficient panel will lead to a higher installed capacity, generate more electricity, more income and save more CO2. However, it will be more expensive to install, leading to lower returns on investment than a less efficient module. It really depends on what your motivation is for installing – environmental or economic.

This relationship doesn’t always hold true. There are a certain amount of fixed costs in a solar PV installation – scaffolding will be about £500 irrespective of installed capacity, and labour is the same per panel irrespective of its efficiency. So the picture changes for small roofs less than about 16m2 where these fixed costs become disproportionately important. Here, the argument goes, if you are going to pay that much just to get up on the roof and install panels, you may as well make it worthwhile by putting in something more efficient while you are there.  In this case more efficient panels will have a higher installed capacity, generate more electricity and income, save more CO2 but may actually have better rates of return on investment as well (and if they don’t it will be close).

This space limitation is why the domestic market in the UK has been completely based around crystalline silicon modules and higher efficiency options. There are a range of lower efficiency products such as amorphous silicon, cadmium telluride or copper indium diselenide – the so-called thin film technologies. While these aren’t ‘bad’ technologies per se, they haven’t penetrated the domestic PV market purely because it’s hard for these lower efficiency technologies to overcome the ‘fixed costs’ issue in space-limited applications. Recently UK installers Engensa have just partnered with Chinese manufacturers Hanergy to deliver domestic thin-film installations in the UK. It remains to be seen whether they can buck the historic economic case against such an approach.

More information on solar PV from YouGen

Read Chris Jardine's introduction to this series: Which solar panels are best?

The YouGen guide to solar PV

10 tips for choosing a good solar PV installer

How to use excess solar PV to heat water

About the author: Chris Jardine is technical director of Joju Solar and teaches on the MSc course in Environmental Change and Management at Oxford University.

If you have a question about anything in the above blog, please ask it in the comments section below.

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