The solar industry has historically focused on increasing energy conversion efficiencies at the cell level. However, as the industry matures, commercialization practices have come into play, resulting in an augmented awareness of solutions through balance of system (BOS) improvements and enhancing the efficiency of existing installations at the panel level.
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Because the performance of a system rarely corresponds to total capacity, especially when the outside influence of real-world conditions interferes, these BOS components are crucial in recapturing efficiency losses.
Additionally, the performance ratio of any given solar system will degrade over time, meaning that BOS components will play an increasingly important role in maintaining system performance, ensuring an optimal return on investment (ROI).
Due to a variety of environmental and system efficiency factors, all solar panels provide less energy than their maximum rated output. This difference is known as total performance factor, or performance ratio. This value is used to measure the performance of a facility after deducting the power losses inherent in a PV system. Therefore, it is a parameter completely independent of irradiation.
Performance ratio is widely considered the best measure of panel quality, because all components and their interactions are taken into consideration during calculation.
More specifically for photovoltaic systems, the performance ratio is the quotient of the yearly kWh (AC) yield and the best-case – or nameplate – kWh (DC) yield. The best-case yield is determined by multiplying the nameplate wattage (assuming room-temperature test conditions) of all the modules in the system by the expected yearly available insolation at the module.
Then, the performance is derated to compensate for conditions like inverter and cabling efficiencies, mismatches, aging, temperature and so forth. 
According to the National Renewable Energy Laboratory (NREL), the standard performance ratio for a new PV system is a mere 77%, and over time, the performance of the system is assumed to degrade.
NREL has found that system performance will degrade 1% per year, which means that after 20 years, the system will be performing at 80% of its already suboptimal starting performance. For an average system, this means a performance ratio of just 61.6%.
Moreover, real-world data collected by the California Solar Initiative shows that many arrays do not even meet this low performance expectation set by NREL. Solar modules are not the cause of this under-performance. Most modules individually operate at 80% or 90% of their new performance after 20 years.
Rather, system aging, worsening mismatch, corrosion and cabling issues combine to degrade the system disproportionately. At the upper end of system performance ratios, a leading power purchase provider has recently published fleet performance ratios around 85%.
While performance ratio is important in determining the quality of panels and systems at installation, it also degrades through normal wear and tear over time, or other forms of unforeseen damage. This progression is best exhibited by data collected from observing a 30 kW solar installation on a low-income housing unit in Oakland, Calif.
Over just two years following the installation's completion, the performance ratio of the system degraded from an initial rating of 77% to 67% – well below industry minimum – at an average of 5% per year. While 5% is not a significant loss in itself, if this rate degradation continues over the years at this rate, it would result in significant loss in power generation and a corresponding decrease in the system's ROI.
Fortunately, several solutions to this problem are now available on the market. In the case detailed above, National Semiconductor's SolarMagic power optimizers were retrofitted onto approximately one-third of the 204-panel system. This addition resulted in an overall power generation increase of 22.6% – even under less-than-optimum conditions such as shading and wiring imbalances – and the performance ratio was accordingly boosted to 82%.
Power optimizers essentially identify and extract the maximum energy-generating potential available in each panel. At the same time, they are decoupled from suboptimal performance in other parts of the system. In field trials, power optimizers have proven capable of recapturing as much as 57% of lost energy.
Many factors can contribute to panel performance degradation. However, by anticipating this issue and incorporating BOS components like power optimizers, major stakeholders can increase their ROI and avoid a potentially devastating impact on their systems. Watts really do matter.
Ralf Muenster is director of the renewable energy business unit at National Semiconductor Corp. In this role, he is responsible for leveraging National's strength in energy-efficient technologies to develop strategies and products for efficient energy generation in the renewable energy market. Muenster led National's entry into the solar market with the successful launch of National's SolarMagic Power Optimizer technology, created to maximize the output of solar panel installations affected by real-world mismatches.
Prior to joining National in 2007, Muenster held various management roles in the semiconductor industry, most recently serving as marketing and applications director for power products at Micrel Inc. He also led the automotive business segment at Advanced Micro Devices. Muenster is credited with founding a successful computer start-up company in Germany and was a scientist at the University of California at Berkeley. He holds a master's degree in physics from the Technical University in Munich.
