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After you know how much electricity your household utilizes, you have to decide the amount of energy you want to offset. While 100 percent seems appealing, it may not be financially feasible or practical due to space constraints. As a general rule, 100 square feet of solar panels will generate 1 kilowatt (kW) of electricity—but only when the sun is high and perpendicular to the panels. The amount of power generated by a solar system at a particular site depends on how much of the sun's energy reaches it. Most residential solar electric systems require between 50 square feet (for small "starter" systems) and 1,000 square feet. Commercial systems may require even more surface area or rooftop space.

To further complicate matters, certain solar PV modules generate more electricity per square foot than others. Monocrystalline (black, single cell) panels have traditionally boasted the highest peak efficiency, although polycrystalline (blue, multiple cell) panels have caught up quickly and outperform single-cell panels on cloudy days. Thin film (amorphous) panels are more flexible, but less efficient than crystalline panels.

Many people assume that the bigger their solar PV system, the more savings they’ll generate. While the benefits are undoubtedly greater with more solar panels, other factors may be considered before covering every inch of your roof in photovoltaics. “To make the most of your solar power, the key is to implement simple energy efficiency strategies,” advises Element Energy. For example, rather than investing in a massive rooftop solar array, homeowners could integrate energy-efficient heaters, solar hot water systems or design features such as strategically-placed vents and insulation.

Net metering is the new option. To qualify for net metering (the billing agreement where you produce your own electricity and sell the excess power back to the utility company) your PV system must be under a certain generating capacity. Net metering requirements vary by state, but the typical size cap is 10kW for residential systems.

But economies of scale can certainly decrease the cost-per-kilowatt-hour of your solar PV system, as you increase in size. “Many inverters are sized for systems up to 5 kilowatts, and if your PV array is smaller (say 3 kilowatts), you may still end up buying the same inverter,” Labor costs may also be comparable for both large and small systems, and your solar installer may even quote a better price to install a 2kW system up front if you’re considering future expansion—as multiple site visits are more costly.

Solar panel efficiency

Solar panel efficiency, or conversion rate, refers to how much of the incoming solar energy is converted into electrical power. Typically, the efficiency of commercial solar panels operates in the range 15-20%.

Shade on Solar Panel

Shade will obviously affect the output of solar panels. Depending on your setup, a little shade can even bring down an entire solar system. Professional solar panel installers will do a thorough analysis of shading in your specific situation.

Temperature of Solar Panel

Temperature is not something you have to consider unless you live in very hot areas. As the temperature increase, the efficiency of solar panels usually decreases a little bit. Professional installers will make sure that the solar panels are positioned to receive sufficient amounts of airflow. This induces natural cooling, which help keep the efficiency rates up.

Solar Panel Lifetime

The efficiency of solar panels does degrade a little bit over time. The general rule of thumb is that the power output drops by 0.5% every year. Solar panel manufacturers often offer a warranty that guarantees the power output stays above 80% after 25 years.

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