The long-term performance of photovoltaic systems is a central factor for economic calculations, investment decisions, and the cost of electricity generation. In practice, the Degradation of PV systems but often with 0.8 to 1.0 percent per year too conservatively assumed. While usually only the manufacturer's specifications for module degradation are used, a current study by the Brandenburg University of Applied Sciences Cottbus-Senftenberg (BTU) now shows that the actual yield losses of complete PV systems are significantly lower than many previous assumptions.
The large-scale evaluation of more than 1.2 million PV systems in Germany averages an actual value of approximately. 0.6 percent, which even slows down with the increasing age of the plants. For operators, investors, and planners, this means: Many existing calculations underestimate the possible electricity yield over the lifespan - with positive effects on returns, climate benefits, and the planning of replacement investments.
What does degradation mean for PV systems?
degradation refers to the gradual performance decline a photovoltaic system about the operating life. This is usually expressed as a percentage per year. Every panel loses a small part of its ability to convert incident solar energy into electrical energy over time – caused by material fatigue, weathering, temperature changes, UV radiation, soiling, and electrical aging processes. The crucial point is that even small differences in the assumed degradation add up over 20 or 30 years of operation to significant deviations in the expected electricity volumes and thus in revenue, cost per kilowatt-hour, and investment valuation. The distinction between different levels of consideration is important here:
Module Degradation (Physical Consideration)
Module degradation describes the loss of performance of individual PV modules under standardized conditions and is, in many cases, the only coefficient taken into account in the profitability calculation of entire systems. Typical causes that the Efficiency of solar cells influence are:
- light-induced effects (LID)
- material-related aging
- Microcracks and cell fatigue
According to the BTU study, after an initial degradation of the modules during the first year of operation (approx. 1–2 %), the annual power loss is usually around 0.3–0.5 %. These values are predominantly based on laboratory tests and manufacturer specifications, representing a technically isolated consideration.
System degradation (overall technical system)
The BTU study also broadens the scope to include system degradation, meaning the entire technical infrastructure of the PV system. In addition to the modules, the following are considered:
- Inverters (efficiency losses, lifespan)
- Wiring of PV modules and contact points
- electrical losses and mismatch effects
Typically, degradation rates of about 0.5–0.8 % per year set. These values are more practical, but they are often still based on model assumptions and less on actual measured long-term data.
Yield degradation (economically decide)
For operators and investors, the actual energy yield is ultimately crucial. Yield degradation describes the decrease in the amount of electricity actually generated by a system. In addition to technical effects, operational and site-specific influences are also incorporated here, which the BTU study also takes into account:
- Soiling
- Temperature and weather influences
- Maintenance and operation
- Temporary outages
The current study is based on up to 16 years of operational data from 1.25 million PV systems with a total capacity of 34.9 GW, as well as open data from grid operators, the Market Master Data Register, and weather services (DWD, Copernicus). It shows an average yield degradation of around 0.59 % per year (Range: approx. 0.52–0.61 % per annum).
Key findings from the study using current field data
The new BTU study „From Shine to Decline” analyzed over 1.25 million PV systems in Germany with a total capacity of around 35 GW and up to 16 years of operation – significantly more data than any previous study. The average annual performance degradation of entire systems is between 0.52 and 0.61 percent – less than the 0.8 percent often cited in the literature. This means the overall system performance is closer to module degradation values than previously assumed. This indicates a generally high system stability of modern PV systems.
The non-linear degradation is particularly relevant. Stronger effects occur during the first years of operation, and then the degradation rate flattens out, so that after 10 years, systems age only 7 to 13 percent slower. This leads to systems often operating more stably in later service than assumed in traditional models.
Larger commercial ground-mounted and rooftop systems show approximately one-third higher degradation rates than small private rooftop systems, presumably due to more complex systems and Potential-Induced Degradation (PID). Compared to global reviews (average of 0.8 percent), previous values overstated the decline for Germany's temperate climate. For practitioners, this means: After 20 years, performance is typically still around 90 percent – a technical end-of-life after 20 years is too pessimistic.
Implications for Economic Viability & Planning
Lower real degradation leads to higher projected electricity yields over the lifespan of a PV system – with direct benefits for economic viability and investment decisions. Assuming a 0.6 percent annual decline instead of 0.8 percent, a typical system generates after 20 years run 3–5 percent more electricity, which adds up to thousands of euros in additional annual revenue for larger projects.
The Levelized Cost of Electricity (LCOE) decreases accordingly, as the initial investment is spread over a greater number of kilowatt-hours produced—which is particularly attractive given rising electricity prices and subsidies. In addition, this new realistic assessment also affects the economic viability of PPA and Contracting models. The lower degradation rate increases planning security and improve the calculation basis. Overall, the Cottbus researchers expect that maintenance and repowering costs of several hundred million euros annually could be saved in Germany alone by 2040.
Influence of Climate & Location on the Degradation of PV Systems
In addition to age, weather and environmental factors also measurably affect PV performance. Each extremely hot day above 30°C, frost day below 0°C, or each microgram of particulate matter (PM10) per cubic meter reduces the annual yield by 0.038 to 0.101 percentage points. Heat stress particularly affects older systems and increases over time, while frost and air pollution have a greater impact on younger systems.
Precipitation in the German climate tends to have a slightly positive effect through cooling and self-cleaning of the modules. In contrast, heavy rainfall events often create mechanical stress. Operators should therefore consider that locations in southern Germany are burdened by more heat or urban areas due to higher pollution. This requires more frequent maintenance, while plants in northern Germany generally benefit from milder conditions.
Impacts on Planning & Operations
For Project planner Are degradation assumptions of 0.5% to 0.7% per year for German rooftop systems more realistic than the often conservative 0.8% to 1.0% – especially with high-quality components and optimized operation and good maintenance? Include local climate data (e.g., from DWD) in yield models to price in location-specific heat, frost, and soiling risks.
Operator should prioritize heat management – shade, ventilation, or heat-tolerant modules help, as older systems are particularly sensitive to this; clean regularly if near industrial areas or traffic to minimize fine dust effects. Large solar farms and rooftop installations, however, require more frequent inspections due to their one-third higher degradation risk.
Investors benefit from higher expected electricity volumes. This means that existing facilities are more valuable than previously assumed and new projects pay for themselves more quickly.
About the Study
The analyzed study „From shine to decline – Degradation of over 1 million solar photovoltaic systems in Germany” will be published in 2026. Energy Economics published. It examines all data using high-dimensional fixed-effects panel regressions – and clearly sets itself apart from previous work. Compared to earlier studies, it surpasses them through its enormous sample size (millions vs. thousands of plants), its long observation period (16 continuous years), and its consideration of environmental factors as well as non-linear degradation. Based on open data sources such as the Marktstammdatenregister, Netztransparenz, and DWD, it thus delivers highly robust, practically relevant results for the temperate German climate.
Direct comparison to previous studies
| BTU Study on Complete PV Systems | Previous assumptions based on module degradation | Difference | |
| Height of degradation | Ø 0.52–0.61 % per annum (≈ 0.59 %) | Ø ~0.8–1.1 % per year (reference value ~1.09 %) | ~40–50 %: lower degradation than previously thought |
| Degradation behavior (linear vs. non-linear) | Degradation is not linear; loss decreases with age. After 10 years: 7–13 %, lower annual degradation | Mostly linear trend (constant annual loss) | Early phase more affected, then stabilization – Linear models are: too optimistic in the short term too pessimistic in the long run |
| Result after 20 years | 88,9 % | 81.79 % (at 1% per year) Manufacturers guarantee: even after 30 years, over 85% % | after 30 years at 1 % = 74 % After 30 years at 0.59 % = 83.74 % |
| Influence of the plant size | Large systems (>30 kWp): ~1/3 higher degradation | Focus almost exclusively on: small systems (<30 kWp) little differentiation by size | Economies of scale negatively impact degradation |
| Temperature influence | Heat and cold cause measurable additional losses −0.038 % to −0.101 % per extreme day | Environmental factors often: simplified or not systematically integrated at all | Quantified, significant influence, location decision becomes more crucial |
| Air pollution impact | Clearly negative effect (PM10) | Often: neglected or only considered qualitatively | Quantified, significant influence, location decision becomes more crucial |
| Precipitation Influence | No clear effect: Cooling & Cleaning vs. Scattering & Moisture | Often generally positively rated (cleaning effect) | Reality is significantly more complex |
| Interactions | Effects change with increasing age: Heat → stronger in old systems Cold & Pollution → stronger with new systems | Mostly no dynamic interactions considered | Degradation is a dynamic process |
| Database | 1 million systems, ~35 GW Operating data up to 16 years old | often: few installations (7–2,000) and short periods (2–7 years) | More robust data: Representative & closer to real-world operations |
| Economic evaluation | Significantly cheaper per degradation: −4.8 % LCOE compared to previous estimates Overall economy: ~€638 million in savings / year possible | Higher costs for replacement and repowering planned | Higher yield even after long runtimes, even with replacement of hardware components |
Non-linear degradation now standard
Compared to previous studies, this one surpasses them due to its enormous sample size (millions vs. thousands of installations), the long observation period (16 years of continuous data), and the inclusion of environmental factors as well as nonlinear degradation. Based on open data sources such as market master data registers, grid transparency, and DWD, it thus provides highly robust, practice-relevant results for the temperate German climate. A study by the University of Applied Sciences of Southern Switzerland (SUPSI) from 2026 yielded a similar result. Here, too, after a service life of 25 to 30 years, the PV systems still operated at 80% of their original rated output.