Research from Solargis suggests current industry practice for calculating impacts of degradation on inverters may be wrong by more than 3%.
Why it matters: Your long-term yield projections are likely underestimating revenue in later years, meaning you're pitching lower IRRs to investors than you actually achieve.
The Phantom Loss Phenomenon
We’ve all sat through those late-stage project finance meetings where the bank’s engineer nitpicks the P90 yield estimate. Usually, we argue over soiling coefficients or the spectral shift in Northern Europe. But Solargis just dropped a bomb on something far more fundamental: the non-linear relationship between module decay and inverter saturation.
For years, the industry has lazily assumed that if a module degrades by 0.5% a year, the energy hitting the AC side drops in a predictable, linear fashion. It doesn’t. When you’re running a high DC/AC ratio—common in Germany or the Netherlands to squeeze every drop of juice out of a cloudy Tuesday—your inverter is 'clipping' the peak generation during the summer. As the panels age, that clipping doesn't just disappear; it shifts the entire operating curve in a way that standard PVSyst defaults often fail to capture accurately.
Why Your IRR Is a Work of Fiction
A 3% discrepancy sounds small until you’re looking at a 20-year O&M contract for a 50MW utility-scale site in Spain. If you are overestimating clipping losses in years 10 through 20, you are undervaluing the asset's tail-end revenue. In a market where margins are razor-thin and EPCs are fighting over basis points, being 'wrong' by 3% means you’re either leaving money on the table during a sale or losing bids to competitors who actually understand their physics.