Guide · Updated September 2026
Solar panel degradation in India: what you actually lose
The short answer
Solar panels degrade slowly. A typical tier-1 warranty guarantees roughly 80–87% of nameplate output at 25 years, which works out at around 0.5–0.7% a year after the first-year drop — and that first year is the steepest, often 2–3% as the cells stabilise. Putting a realistic degradation curve into your payback maths makes almost no difference to whether solar is worth it, because grid tariffs rise about 4% a year in the same period.
How much output a panel loses
Manufacturers publish two numbers on the datasheet: the guaranteed minimum output at year one, and the annual degradation after that. For a mainstream tier-1 module the year-25 guarantee usually sits between 80% and 87% of nameplate. Read your panel's own datasheet — the warranty terms are the citable figure, not a general rule of thumb.
Why the first year is different
The steepest decline happens in the first hours and months of operation as the cells stabilise under light. That is why warranties state a year-one floor separately from the linear rate that follows. Do not read a 2–3% first-year drop as a sign anything is wrong.
What speeds it up in Indian conditions
Heat is the biggest factor: sustained high cell temperatures age a module faster, and Indian summers put panels near their thermal limits. Soiling accelerates apparent — not actual — loss until you clean it. Hot spots from a cracked cell, and potential-induced degradation where earthing is poor, are the two failure modes worth testing for rather than assuming away.
What it means for payback
Degradation is why the honest payback model uses a declining generation figure rather than a flat one. But tariffs in India rise at roughly 4% a year, against panel losses of well under 1% a year — so the avoided cost of the units you generate climbs faster than your generation falls. A realistic curve moves the payback date by months, not years.
Run your own numbers
Guides give you the rules; the calculator gives you your numbers. One input — your monthly bill.
Open the calculatorFAQ
How much do solar panels degrade per year?
About 0.5–0.7% a year for mainstream tier-1 modules after the first year, with the first-year drop steeper at around 2–3%. Your panel's datasheet states the exact guaranteed figures.
Do panels stop working after 25 years?
No. The warranty guarantees a minimum output at 25 years, typically 80–87% of nameplate. Panels commonly keep producing beyond that at a slowly declining rate.
Does degradation make solar a bad investment?
No. Grid tariffs rise around 4% a year while panels lose well under 1% a year, so the value of each generated unit grows faster than generation declines.