Cheap or premium solar panels: which gives cheaper electricity?

In short: a premium module gives cheaper electricity only when its extra kWh outgrow its extra price, and on the module price alone that bar is high: lower degradation from the 90th to the 10th percentile of our catalogue, 0.55 against 0.35 %/yr, is worth a few percent more energy over the years. The bar falls once you count the rest of the system, which costs the same per kWp whichever module carries it. In Polish shops, 11 of 13 shops charge more per watt for the more efficient modules they list, by a median of 6 %.

A shop quotes a module per watt, and per watt is how you compare two shops. What you actually buy, though, is the electricity the module makes over twenty or thirty years. Two modules at the same price per watt can make different amounts of it: one loses less to heat, one ages more slowly. A dearer module is a good deal when that difference is bigger than the difference in price.

This article turns price per watt into cost per kWh, in the order you'd check it before buying: what shops charge for better figures, what those figures return in kWh, and the price at which the premium module stops paying.

Price per watt and cost per kWh

Price per watt is the shop price divided by the module's rated power, which is its power at standard test conditions. Two modules of the same rated power at the same price per watt cost the same per kWp. From then on they differ in three ways:

1. How much power they lose in heat. The temperature coefficient says how much power goes for each degree the cells run above 25 °C, and NOCT how hot they run. The article on panels for a hot climate works through both.
2. How fast they age. A datasheet allows a first-year loss and then a loss per year, and the performance warranty holds the manufacturer to it.
3. How they behave in weak light, which datasheets rarely state in a form you can compare.

Efficiency is not on that list, and that surprises people. Efficiency is power per square metre of module. A 23 % module and a 21 % module of the same rated power make about the same energy; the 23 % one is smaller. Efficiency buys you more kWp on a roof that is full, which the article on small roofs and balconies covers. On a roof with room to spare, it buys you nothing per kWh.

Cost per kWh is the price divided by all the energy the module makes, the way the levelized cost of electricity (LCOE) is built. Fraunhofer ISE's LCOE study puts it plainly: the present value of all costs divided by the present value of the electricity generated. The energy is discounted as well as the money, because a kWh in year 25 is worth less to you today than one in year 1. The rate that does it is the discount rate: what your money would earn elsewhere, or what a loan costs you.

What shops charge for better figures

I looked at Polish offers that our matcher tied to one catalogue module, so the figures are the datasheet's, not the shop's description. The overall Polish median is 0.146 EUR/W before tax, on 1,220 offers.

By efficiency band:

By temperature coefficient, where a number closer to zero is better:

And by cell technology, the two that carry most of the market: TOPCon at 0.143 EUR/W on 167 offers, PERC at 0.189 EUR/W on 36 offers. The article on TOPCon or PERC has the rest of that comparison.

Read the offers and shops columns before the medians. A band held by a handful of shops is a statement about those shops: their price level, their stock, how they clear older lines. If the weakest band has the highest median, that is not a premium charged for worse figures. It is usually older or smaller-run stock in fewer shops, and it is still a reason not to buy it.

The fairer test is inside one shop, where the shop's own price level drops out. Of the 13 Polish shops that list matched modules in both upper efficiency bands, 11 charge more per watt for the more efficient ones, by a median of 6 %. For the temperature coefficient it is 12 of 19 shops, by a median of 4 %. That same-shop difference is the premium to hold against the returns below.

What better figures return in kWh

Ageing. Across our catalogue, the 10th percentile of stated annual degradation is 0.35 %/yr and the 90th is 0.55 %/yr, after a first-year allowance whose median is 1.0 %. The gap in remaining output grows by the difference every year, so it is small early and largest at the end, which is exactly where discounting weighs it least. The median performance warranty runs 30 years, and that is the span I count.

Heat. In a hot hour, 30 °C air and full sun, the 10th percentile module delivers 87.3 % of its rating and the 90th percentile module 90.6 %. That distance is the most these two figures separate ordinary modules at the hottest end of the year. Most of a year's energy is made in cooler hours, where the same two modules sit closer together, so the yearly gap is smaller than the hot-hour gap. The heat yield comparison runs any two datasheets through a given hour.

Efficiency, as above, returns nothing per kWh unless the roof is the limit.

So the returns are a few percent of energy at most, from two figures that each move the total by a little. That's the number a premium has to beat.

The module-only cost per kWh

Here is the arithmetic with round example inputs, not our data. Module A costs 0.20 EUR/W and loses 0.5 % a year; module B costs 0.22 EUR/W, ten percent more, and loses 0.3 %. Both allow 1 % in the first year, both make 1000 kWh per kWp in their first full year before ageing, and I count 30 years at a 4 % discount rate.

• Over 30 years, A makes 27 525 kWh per kWp and B 28 395 kWh. Discounted, that is 16 114 and 16 516 kWh, so B makes 2.5 % more.
• A's kWp costs 200 EUR, B's 220. Divided by the discounted energy, A's electricity costs 12.41 EUR per MWh on the module alone, B's 13.32.
• B would match A at 2.5 % more per watt. At ten percent more, A gives the cheaper kWh.

Without discounting B's advantage grows to 3.2 %, because the late years count in full, and it still falls far short of ten percent.

Set your own two modules in the figure. Module A starts on the live offer median price per watt and the 90th percentile of stated degradation, module B on the 10th percentile with an example premium.

The yearly yield cancels out of the comparison: it scales both modules the same way, so it moves the cost per kWh and leaves the break-even premium where it was. PVGIS, the European Commission's yield calculator, gives about 1050 kWh per kWp a year in Warsaw and about 1670 in Seville for a well-angled system with 14 % losses. Type your own site's figure if you want the cost per kWh itself to mean something.

Where premium pays

The module is not the whole system. Inverter, mounting, cables, scaffolding and labour cost the same per kWp whichever module goes on the roof, and Fraunhofer ISE's study puts small rooftop systems in Germany at 1000 to 2000 EUR per kWp all in. The extra energy B makes comes out of that whole investment, not just out of the module.

Run the worked example again with 1500 EUR per kWp for the rest of the system. A now costs 105.50 EUR per MWh and B 104.14: B gives the cheaper kWh, and it could cost up to 21.2 % more per watt than A before that flips. The energy advantage is the same 2.5 %; what changed is how much money it earns back. In the figure, move "Rest of the system" and watch the break-even premium climb.

That gives three cases where the dearer module pays:

1. A fixed system cost per kWp. Every percent of extra energy is worth a percent of the whole system, so a module that verifiably ages slower or loses less to heat can carry a premium many times its own energy gain. This is the usual case on a house.
2. A full roof. Higher efficiency puts more kWp on the same area. Whether that pays is a question of kWp per euro on that roof, not of price per watt, and the roof-fit selector answers it.
3. A hot site. The hot-hour gap applies to more of the year, so the heat factor in the figure deserves a bigger number than it would in Warsaw.

And where it doesn't:

1. You're buying modules alone for a system whose other costs are sunk or tiny, such as a replacement or a balcony set. Then the module price is most of the cost, and the module-only figure is the right one.
2. The premium buys a figure you can't use. Efficiency on a roof with space to spare, or a better temperature coefficient in a cool climate.
3. The better figure is only on paper. Degradation per year is a warranty limit, not a measurement of your module. A manufacturer that writes a lower rate is promising more, and the promise is worth what the manufacturer is.

How the figures were read

The prices are what shops print now, read by our crawler, before tax and in euro, for single modules of 400 to 800 W. The specification comparisons are Polish only, because Poland is the market where enough offers are tied to a catalogue module by part number in every band. The degradation, heat and warranty figures are datasheet values across our whole catalogue, not measurements. Everything is recomputed when the page is served, so the tables move with each offer pull and catalogue sync. The exact counting rules are under Figures and denominators, below the article.

The cost per kWh here is a comparison tool, not a forecast. It leaves out operating costs, inverter replacement, financing and what your electricity is worth to you. The solar payback calculator takes in the last of those, with the whole system cost. None of those change which of two modules gives the cheaper kWh, as long as they cost the same for both.

What to do with this when buying

1. Compare per watt first, within one shop if you can. That's where a premium is real and not a difference between shops.
2. Work out what the premium buys in energy. Lower stated degradation and a better temperature coefficient each add a few percent at most; efficiency adds nothing unless your roof is full.
3. Put the premium against the whole system cost per kWp, not against the module price. With an installer's quote in hand, type it into the figure as the rest of the system and read off the break-even premium.
4. If you buy modules alone, buy the cheaper watt unless the dearer one's advantage is larger than its price difference, which on these figures it rarely is.
5. Check the live offers before you decide. The same module can cost different amounts in different shops; hold that gap against what the figure says a better datasheet is worth.