Depending on how much you’re willing to spend, you can buy solar panels of different efficiencies, with the most efficient solar panel residential systems costing about $30,000 to install on average. One might expect numerically high efficiencies for such hefty costs. Yet, even the most efficient, state-of-the-art solar panels top out at an efficiency of only about 22%.  

Why haven’t we, in this day and age, managed to extract more usable energy from light? Have we reached the peak of what we can expect from solar panels? Is solar energy becoming an unviable option for large-scale adoption?

First, let’s talk about what exactly “efficiency” means for solar panels.

How solar panels work

Solar panels convert light energy into electricity by using what physicists call the photovoltaic (PV) effect. The PV effect occurs when a photon of light strikes an electron (the negative charge) in an atom. If the photon has enough energy – i.e., if it is of a high enough frequency – the photon can “knock” the electron out if it’s atom. This “free”  electron is now theoretically able to move around within the material (silicon in the case of solar panels) as it pleases. If many such “free” electrons can be forced into a circuit – i.e., if a voltage can be applied on them – they become a flowing current: electricity.

The emission of electrons from a metal plate caused by photons. COURTESY OF THE WIKIMEDIA FOUNDATION.

The efficiency rating of a solar panel measures how well the panel is able to use the PV effect to convert light energy into usable electricity. So, a solar panel with a 20% efficiency rating that receives 100 units of light energy will only render 20 units of electric energy that can be used for our purposes (mostly charging my laptop exhausted from the day’s Zoom sessions, unfortunately). 

Why are solar panels so inefficient?

There are several reasons, because life is complicated.

Here’s one reason: light reflects off surfaces. It’s why we have sight, but it’s also why solar panels can’t process 100% of the light that hits them. Currently, bare silicon (which is where the PV effect in solar panels takes place) reflects about 30% of the light it receives. In solar panels, however, additional silicon monoxide and titanium dioxide layers are placed above the bare silicon wafer. These extra layers and a specially textured surface dramatically increase the amount of light absorbed rather than reflected by the panel.

Generally, solar panels are composed of three layers that reduce how much light is reflected away, rather than used, by the solar panel. COURTESY OF REAL ENGINEERING.

Spectrum Losses. The PV effect only allows electrons to be “knocked” off their atoms if the photon that does the knocking has a threshold level of energy. Of all the sunlight that hits Earth, 19% does not have this threshold level of energy. If the photon does have more than the energy required to knock off the electron, the extra energy dissipates as heat energy; it is not used to knock off other electrons. The lost heat energy, apart from being an inefficiency in itself, makes the entire panel hotter. The hotter a panel the more inefficient it becomes, for reasons too complicated to bother with. All these spectrum losses together reduce solar panel efficiency by a whopping 52%.

Capturing “free” electrons is not completely efficient either. They must be forced to “flow” in a circuit to create a current that electronic devices can use by creating a potential difference or voltage. This involves overcoming electrons’ natural resistance to this movement by strategically placing metal electrodes on the surface of the panel. Of course, this results in precious panel surface area that could have been used to absorb more photons being eaten up by metal electrodes.

Experts have actually figured out how to optimize the placement of these metal electrodes. They found that a fractal structure that looks remarkably like the natural vasculature of a leaf balances the distribution and flow of current through the solar panel, just like it does for the distribution and flow of water in leaves. Then again, leaves have had millions of years to evolve; solar panels have only just started! Because it is much cheaper, solar panel manufacturers stick to simple grid shape, which makes the panel an estimated 8% less efficient.

Ideally, the placement of metal electrodes on solar panels should resemble the vasculature of a leaf. This optimizes the flow of electricity within the panel, making it more efficient. COURTESY OF GREGORY DUBUS VIA GETTY IMAGES.

There is also the “mystery” flaw. Given all the inefficiencies discussed above, scientists estimated that solar panels should be about 20% efficient, which they are at manufacture. But, after only a few hours of usage, solar panels see their efficiency unexpectedly drop by two percentage points. That’s a 10% decrease in energy that scientists have not been able to account for, and represents about 567,000 MW or 30 nuclear factories worth of energy lost worldwide. Some recent papers suggest that the drop could be because of the presence of oxide impurities in the bare silicon wafer. Panels with fewer impurities have indeed demonstrated a smaller drop in efficiency. 

Can we chip away at these inefficiencies?

Yes, despite what you might hear on popular yet misinformed videos like this. Solar panels are everyday becoming cheaper and more efficient to use. In fact, coal as a source of energy isn’t losing out to solar and wind because of government subsidies, but simply because it’s being outcompeted in the free market. Working on rooting out the inefficiencies in solar is what scientists do – and there is no indication they are slowing down. 

But surely we should switch to more efficient sources of energy?

Not when solar energy is demonstrably cheaper than its carbon-inefficient alternatives! It’s true that it’s highly unlikely we’ll end up relying solely on solar panels to meet all our energy needs – it would cost too much to store energy for when the sun is not out. But that does not mean we cannot power our energy grid with a diversity of sources, including solar, wind, geothermal and biofuel, among others. We have not yet reached a limit on our dependence on renewable sources for our energy needs. The future is bright and powered by the carbon-neutral forces of nature.

Have you installed solar panels for your home? If not, what’s keeping you from putting them up? If you have, do you love the purchase? Let us know in the comments section below!