Degradation
The gradual annual loss of module output, typically 0.5-0.7% per year after a higher first-year drop, warranted by manufacturers to 80-87% of nameplate at year 25.
Two separate numbers
First-year degradation (light-induced, 1-3% depending on cell technology) is distinct from the linear annual rate that follows. A financial model that applies only the linear rate from day one overstates lifetime yield.
Why it matters to LCOE
Degradation compounds. At 0.7%/year a plant delivers about 84% of year-one output in year 25; at 0.5% it delivers 89%. Across 25 years that gap is worth more than most capex differences being argued over at tender stage.
Related terms
Where this applies
Utility-Scale Solar EPC, Operations & Maintenance
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