The solar panel efficiency or conversion efficiency is the percentage of the solar energy striking on the panel that is converted into usable electricity. Not all of the sunlight that reaches a photovoltaic cell is converted into electricity. When light strikes the surface of a solar cell, some photons are reflected, while others pass right through, some of the absorbed photons have their energy turned into heat & the remainder have the right amount of energy to separate electrons from their atomic bonds to produce charge carriers and electric current. Most solar panels provide an energy efficiency rating between 11 to 18 percent, which is the percentage of solar energy that is being converted into usable electricity.
A solar panel specification sheet usually contains a panel efficiency value at Standard Test Conditions(cell temperature of 25°C and an irradiance of 1000 W/m2).
The higher the efficiency rating, the less number of panels you’ll need to make up a system that meets your energy requirements. However, choosing a more efficient solar panel may not always be the most cost-effective decision available.