Environmental Impact on Solar PV Panel : Degradation and Economic Analysis

Abstract

With global photovoltaic (PV) capacity surpassing 2 terawatts (TW), solar energy has emerged as the most cost-effective power source in many regions. However, ensuring long-term reliability and performance remains a critical challenge, particularly due to module degradation influenced by environmental factors. This study investigates the degradation behavior of a 10-panel PV array over a three-year period using high-resolution environmental and electrical datasets. A multistep methodology comprising data preprocessing, power normalization to standard test conditions (STC), and annual aggregation was applied to assess performance metrics. The degradation rate was estimated using both linear regression and a multivariate model incorporating environmental variables such as relative humidity, ambient temperature, wind speed, global irradiance, and albedo. Results indicate an annual degradation rate consistent with literature values for polycrystalline silicon modules (0.5–1% per year), with temperature and humidity emerging as key accelerators of performance decline. The multivariate model demonstrated strong predictive accuracy, closely matching actual degradation trends. These findings highlight the significant impact of environmental stressors on PV system performance and underscore the importance of site-specific analysis for accurate forecasting. The economic analysis also emphasizes how degradation, discount rate, and system lifetime strongly affect the economic and environmental performance of grid-connected PV systems.