A panel with 20% efficiency converts one-fifth of incoming solar energy into electrical power. Due to the many advances in photovoltaic technology over the last decade, the average panel conversion efficiency has increased from 15% to over 24%. These conditions, known as Standard Test Conditions (STC), involve a module temperature of 25°C, a solar irradiance of 1,000 watts per. Solar panel efficiency determines how much sunlight is converted into usable electricity. Higher efficiency means more power from less space, lower installation costs, and better long-term returns. In this guide. Balance-of-system efficiency; typically, 80% to 90%, but stipulated based on published inverter efficiency and other system details such as wiring losses. It takes into account losses due to factors like heat and conduction.