How the calculation works
Panel ratings are laboratory figures measured under standard test conditions: bright sun, cool cells, perfect angle. Real production is that rating multiplied by how many equivalent hours of full sun you receive, minus everything that leaks away in between.
Peak sun hours are not daylight hours. They express total daily solar energy as an equivalent number of hours at full intensity. A location averaging 4.5 peak sun hours might see fourteen hours of daylight in June and eight in December, with the energy total varying far more than the hours suggest.
Where the losses go
- Temperature: panels lose roughly 0.4% of output per degree above 25 C. On a hot roof this alone can cost 10 to 15%.
- Inverter and controller: conversion costs 3 to 8%.
- Wiring: voltage drop turns energy into heat, typically 1 to 3% in a well sized system.
- Soiling and mismatch: dust, pollen and small differences between panels together account for several percent.
Together these usually total around 20%, which is why the default setting here assumes 80% efficiency. Systems in hot climates with long cable runs do worse; cool climates with short runs do better.
Worked example
A 5 kW array at 4.5 peak sun hours with 20% losses:
That annual figure is the one to carry into a payback calculation. The daily figure is an average, not a promise: expect perhaps 28 kWh on a clear June day and 6 kWh on an overcast December one at mid latitudes.
Common mistakes
- Planning off-grid capacity around the annual average. Grid-tied systems bank surplus in summer against winter; off-grid systems cannot. Size for the worst month you intend to occupy the site.
- Using daylight hours as sun hours. The single most common error, and it overestimates production by two or three times.
- Ignoring shade. A single shaded panel in a string can drag down far more than its own share of output. Shade costs more than almost any other factor.
- Forgetting degradation on long horizons. Half a percent a year is small annually but reaches roughly 10% over twenty years.
Frequently asked questions
How much does a 5kW system produce?
Between about 5,000 and 8,000 kWh a year in most temperate locations, depending on sun hours, orientation and losses. Sunny regions can exceed 9,000 kWh; cloudy northern sites fall below 4,500.
Where do I find peak sun hours for my area?
National solar irradiance maps and databases publish it, usually as kWh per square metre per day, which is numerically the same as peak sun hours. Use the monthly table rather than the annual figure if you are designing off-grid.
Why is my system producing less than this estimate?
Common causes are shading at certain hours, a shallower or wrongly oriented mounting angle, dirty panels, high summer temperatures, or a clipping inverter that is small relative to the array. Compare production across several clear days before concluding something is faulty.