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How a Photovoltaic System Operates

As described in The Beginner's Guide to Solar Energy, solar panels convert the energy of photons into electricity. This process is called the photovoltaic effect.

When a photon hits a photovoltaic device, its energy is transferred from the photon to the local electrons in the material. These excited electrons begin to flow, producing an electric current.

Solar cells (within solar panels) produce direct current (DC) electricity, which is typically converted to alternating current (AC) electricity by an inverter, to deliver energy to the grid (which operates with AC electricity).

Components of a Photovoltaic System

A simple PV system contains two basic types of components:

  • Solar Modules: Solar modules contain solar cells that convert sunlight into electricity.
  • Inverters: A device that converts DC current to AC current.

Diagram of a simple PV system Figure 1. Diagram of a simple PV system. Source: Aurora Solar

It is common practice to refer to all components of a PV system besides the modules as balance of system (BOS) components. Examples of BOS components include inverters, disconnects, racking, and wiring.

Factors Affecting Solar Photovoltaic System Efficiency

It is important to note that the process of producing electricity from solar energy is not 100% efficient. Environmental factors, as well as losses in the electrical components, can affect the efficiency of a PV system. Typical loss categories include:

  • Temperature: The efficiency of a solar panel varies with temperature. High temperatures have a negative impact on performance.

  • Soiling: Material that accumulates on the surface of PV panels can block light from reaching the solar cells, thereby reducing the generated power. The power loss due to soiling is highly variable, depending on the type of soiling (such as dust or snow), and how frequently the panel is cleaned.

Soiling on PV modules Figure 2. Soiling, such as dust, on PV modules reduces power output. Source: Ferretti and Berghold, PV Tech Power

  • Shading: Shading is the obstruction of irradiance due to trees, buildings, terrain, and other objects in the environment. The effect of shading on the power output of a solar installation is highly variable. To understand the causes and consequences of shading, as well as strategies to reduce shading losses, please visit this article.

  • Wiring and connections: Resistance in the electrical connections of a solar installation typically results in energy losses of a few percent.

  • Mismatch: Due to manufacturing variations, modules of the same type can have slightly different electrical characteristics. This mismatch between modules can lead to a performance loss.

  • Inverter Efficiency: Converting DC into AC current via an inverter is typically around 96-97% efficient. Inverters typically have higher efficiency when the DC input power is high. The conversion efficiency takes a big hit when the input power is much less than the inverter's rated power.

  • Age: Solar panels produce less energy the older they get. Typically the decrease in performance is assumed to be around 0.5% per year.

Term Typical Value
Temperature -0.5%/°C above 25°C
Inverter Efficiency 96.5%
Mismatch 98%
Wiring/Connections 98%
Soiling 95% (highly variable)
Age -0.5%/year
Shading Highly environment dependent
Table 1. Typical efficiency values.

The above factors are combined in a coefficient called the system derate factor to represent the overall losses of a solar installation. For instance, PVWatts, an NREL supported PV system energy production calculator, uses a default system derate factor of 86%. However, depending on the system design or environmental conditions, this value can be higher or lower.

Module efficiency denotes what portion of irradiance a module converts into electricity under standard test conditions (STC; irradiance of 1000W/m2, ambient temperature of 25°C). As a general rule of thumb, you can estimate a PV system’s efficiency in converting irradiance into electricity (under STC) using the following formula:

$$\text{Overall System Efficiency} = \text{Module Efficiency} \times \text{Derate Factor}$$

It is important to note that these are merely back-of-the-envelope calculations. To get an energy production analysis, you need a software application, such as Aurora, that incorporates all of a PV system’s environmental, mechanical, and electrical characteristics.

About Solar PV Education 101

How a Photovoltaic System Produces Electricity is part of Solar PV Education 101, a six-article series that serves as an introductory primer on the fundamentals of solar PV for beginners.

Article 1: The Beginner's Guide to Solar Energy
Article 2: How a Photovoltaic System Produces Electricity
Article 3: Reading Your Electricity Bill: A Beginner’s Guide
Article 4: How to Size a PV System from an Electricity Bill
Article 5: Shade Losses for PV Systems, and Techniques to Mitigate Them
Article 6: The Basic Principles that Guide PV System Costs

  • arrays
  • components
  • derating
  • efficiency
  • modules
  • photovoltaic system
  • PV system
  • solar cells
  • Solar Primer
  • Solar PV Education 101

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