Solar panel degradation and warranties

Solar panels are remarkably durable, but they are not frozen in time. They lose a tiny bit of output each year, a process called degradation. Understanding it, and the two warranties that protect against it, helps you compare panels and set realistic expectations.

What degradation actually means

Degradation is the slow decline in a panel's power output as it ages. It is driven by years of sun, heat, and weather gently wearing on the cells and materials. The key word is slow. Panels typically show a slightly larger drop in the first year, then settle into a small, steady annual decline for decades.

The practical takeaway: a panel does not fall off a cliff. Even after 25 years, a quality panel still produces a large share of its original output. That is why solar is treated as a multi-decade investment.

Why degradation matters for planning

Because output creeps down over time, a good production estimate bakes degradation in. A proposal that assumes your panels produce the same in year 25 as year one is overselling. When you review estimates, confirm degradation was included, as covered in our guide on reading a solar proposal.

Two warranties, two different jobs

This is the part homeowners most often confuse. Panels come with two separate warranties, and they protect against different things.

• Product (or materials) warranty covers defects in the panel itself, such as manufacturing flaws or premature failure. If the panel breaks or fails on its own, this is the warranty that applies.
• Performance (or power) warranty guarantees the panel will still produce above a stated percentage of its rated output after a given number of years. It protects against faster-than-promised degradation.

A panel can be perfectly free of defects yet still be covered separately for how much power it delivers over time. Strong offerings pair a long product warranty with a long performance warranty.

What to look for when comparing

When two panels look similar on price, the warranties often break the tie. Check:

• Length of both the product and performance warranties.
• The guaranteed output at the end of the performance term.
• Whether the manufacturer is likely to be around to honor a decades-long claim.
• Who handles the claim, the manufacturer or your installer, and whether labor is covered.

Also confirm the workmanship warranty from your installer, which covers the installation itself, separate from the panel maker's coverage.

Monitoring backs up your warranty

A performance warranty is only useful if you can prove your panels fell short. That is where monitoring helps. Year-over-year production data gives you the evidence to file a claim if output drops faster than promised. Our explainer on solar monitoring covers how to track this.

The bottom line

Solar panels degrade slowly and predictably, losing a little output each year while still producing strongly for decades. Two warranties protect you: a product warranty for defects and a performance warranty for output over time. Compare both, keep your monitoring data, and confirm your production estimate accounts for degradation. Explore more homeowner topics in our guides library.

Educational reference, reviewed 2026-07. A design aid, not a substitute for a licensed electrician or PE. Confirm the enforced NEC edition and local amendments with your AHJ.