Solar photovoltaics slowly lose their generating capacity. Although some solar panels are still working satisfactorily 40 years after installation, the conventional view is that most will dip below 80% of their rated capacity within about 20 years. This will vary slightly between manufacturers and between different types of silicon.

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The length of life of a photovoltaic unit is a critical element in the financial assessment of solar power. Cash payback may take well over a decade in northern Europe, even with substantial subsidies, such as the proposed new UK tariffs. So adding even a few years of expected life can mean a major difference to the viability of a project.

Recent evidence from Japan suggests that life expectancy is longer than expected.[1] A company that reuses old panels reports that it has tested 330 panels made in 1984. 90% of these units can still generate 80% or more of their initial output. The industry expects that products made today will be even more durable than those made in the 1980s. The backing materials used to create the solar panels should be less susceptible to discolouration. So typical lives of thirty or more years can probably be assumed.

These findings are important because they will improve the financial assessments of solar installations and, as importantly, because they will encourage banks to lend more money against the security of the panels because they are expected to last longer. Put another way, if the bank was forced to seize solar panels because the debtor failed to make payments, these panels would have a longer expected future life and thus be worth more to alternative owners. This makes banks more comfortable and we can expect that they will eventually agree to lend more and require repayment more slowly.

In a coincident development, the UK Department for Energy and Climate Change has announced that its feed-in tariffs for solar PV will actually run for 25 years, not the 20 envisaged in its July 2009 consultation document. This will also substantially improve the attractiveness of investment in PV systems. Footnotes [1] ‘Next Energy and Resources Co. Finds Use for 25 year-old Solar Panels’, Japan for Sustainability (www.japanfs.org) [accessed 4 August 2009].