high efficiency solar panels

How to decide if high-efficiency panels are worth the cost

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High-efficiency solar panels are becoming increasingly popular, and can impact how much solar power you can produce on your roof or property. Given all of the options for high-efficiency products, though, it can be hard to get a feel for how the efficiency of your panels influences the costs you pay for solar. Here’s a quick guide to help you determine if high-efficiency solar panels are worth the added cost when comparing your solar options.

The benefits of high-efficiency panels

Higher efficiency solar panels produce more power (kilowatts, kW) and energy (kilowatt-hours, kWh) per square foot of panel. In other words, when comparing two different solar panels of the same square footage, the higher efficiency panel will produce more power, meaning you will need to install fewer panels to get the same size solar energy system. 

This is very useful if you have a roof that is area-constrained, as it’s too small to fit as many standard efficiency panels as you would need to fully offset your electricity consumption. By opting for higher efficiency panels, you can install a higher-power system in the same amount of space. What’s more, the cost of installation (i.e., the cost of actually putting the solar panels on your property) should be the same for high efficiency versus standard efficiency solar panels, meaning that you’ll get more electricity for every dollar you spend on the installation itself with high-efficiency panels. 

module power vs installed cost vs system size graph
system size vs total installed cost graph

NREL-modeled reductions in solar system cost per watt versus system size. Higher-efficiency (higher rated power) panels increase the system size in an area-constrained scenario, and can reduce installed system costs. 

In non-area-constrained systems, when you have plenty of roof space to offset your electricity, you may not need to get the most power out of each individual panel on your roof. Even in this case, high-efficiency panels can still help you in a different way: you need to install fewer panels for the same system size. This saves labor and materials costs, which ultimately reduces the amount you pay for solar. 

When do high-efficiency panels make sense?

High-efficiency solar panels are a no-brainer for space-constrained systems; however, they often also make sense even if you aren’t area constrained. The key is to understand if your economic return is better with high-efficiency panels or not. 

If you own your PV system, a major factor influencing your purchasing decision is the upfront cost of the solar energy system. Installers may not immediately offer prices that reflect the cost savings that come with higher efficiency panel or larger systems. Instead, their offered pricing may be flat across system sizes with different equipment, or even higher for high-efficiency panels given that the panels themselves come at a premium. You can explore the options of high-efficiency panels and pricing, and negotiate with your installer on pricing. (EnergySage note: check out individual solar panel pages on the EnergySage Buyer’s Guide to compare quoted costs for different solar panels on EnergySage.)

However, when deciding which solar equipment to install, another import factor to consider is the lifetime energy output of your solar panels. High-efficiency panels often have a lower temperature coefficient, which means they output more electricity than standard panels when it’s hot out: if you live somewhere where it’s often hot, this provides an added benefit. You can find the temperature coefficients for different panels on their data sheets online, or ask your installer. 

Regardless of how you finance your solar panel system, the more you offset of your electricity consumption with a solar system, the less you will pay your utility less each month. It’s a balance between the added upfront cost of high-efficiency panels and the increase in annual output from the panels. One great metric to compare is the levelized cost of energy or LCOE: a lower LCOE means you’ll pay less per unit of electricity produced by your panels over the lifetime of your solar energy system.  

How to tell if high-efficiency panels are right for you

Here’s how to determine if your home is area constrained, and if high-efficiency panels make sense for you:

#1. Residential customers with net metering

In places with net energy metering or net billing, solar systems are typically sized to offset total electricity consumption on an annual basis. In this case, you can figure out if you are area-constrained by:

  • Estimating your annual electricity consumption in kWh. You can do this by looking at your electricity bills to see what your typical usage is each month. (Installers often do this too when they are sizing your system.) You are more likely to be in an area-constrained situation if you use a lot of electricity, for example, run your AC a lot or have electric heating.
  • Estimating how much energy standard efficiency solar panels offered by your installer would produce in a year in kWh. One method to do so is with the EnergySage Calculator, which uses satellite imagery to determine how much sun your property receives.
  • If the energy produced by standard solar panels (2) is less than your annual electricity consumption (1), your roof is area-constrained. 

#2. Commercial or industrial customer looking to avoid demand charges

Alternatively, if you’re in a situation where you have to pay demand charges if your maximum power consumption (in kilowatts) exceeds some threshold (most common for commercial and industrial customers), then you’d likely be looking to offset that peak on sunny days with your solar power and avoid those charges. If you can’t put a large enough standard panel on your roof to reduce your peak power consumption below the demand charge threshold, then you are also in an area-constrained scenario. 

Additionally, if you’re thinking of getting an electric vehicle or an air source heat pump, you may quickly become area constrained even if you aren’t today. Given that electric vehicles require an additional 7-11 solar panels to cover their charging load, if you think you’ll invest in an electric vehicle soon, it’s worth installing a larger solar panel system today to make sure you’re ready for the future. 

And, finally, the most important thing to consider is price: can you actually get a lower installed price with high-efficiency panels? Talk to your installer about pricing, armed with the knowledge from this post. 

Compare high-efficiency panel options today

High-efficiency panels can help you offset more of your electricity consumption if your roof is small or if you use a lot of electricity, directly translating to more savings on your monthly electricity bill. When making your decision, remember to balance the lifetime savings you’re your solar panels against any increase in installed costs as a result of using higher quality equipment. High-efficiency panels can actually lower the installed system cost, but because the panels themselves can be more expensive and installers don’t always price that way, you should explore the trade-offs for your specific circumstance.  

To learn more about existing high-efficiency panels available today, and to receive custom solar quotes on these specific channels, check out the EnergySage Marketplace.


This article was written by the National Renewable Energy Laboratory (NREL). If you’re interested in contributing content, please email marketing@energysage.com for guidelines.

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