Solar panel efficiency is the ratio of electrical output from a module as compared to the total energy input derived from sunlight. The ratio is in percentage form and portrays the amount of energy expected from a panel when it is exposed to solar energy.
What is available today are natural sunlight units that are capable of converting between 6% and 20% of the total solar energy that they are exposed to. A module that has an efficiency level of 9% is expected to yield 9 parts for every 100 that goes through the photovoltaic cells for example.
Incidentally, the choice between the highest or the lowest energy conversion ratio is not that simple. The cost of those modules that are more productive is always higher than those with lower conversion rates. The cheap inefficient ones however may have the benefit of having a lower cost per watt as compared to the more efficient ones.
The manufacturers have no choice in this really. This is because production of photovoltaic (PV) cells such crystalline silicon, which is more energy productive, is an expensive affair. That is the reason why some factories opt to make modules having thinner cells of solar-grade silicon even if cutting reduces the energy conversion ratio.
The thin-celled units can be produced in modules having a larger surface area to maximize energy input which is okay to those who have such spaces to spare. However, those who are pressed for space and still need solar energy are faced with the dilemma of buying cheap, inefficient and bulky modules or purchasing expensive but compact and efficient kits.
In other scenarios the headache is not space nor purchase price but functionality. In places where the sun shines down throughout the year one may make do with the cheaper versions but this may not suffice where it snows heavily. If an area is covered by power lines one might want to calculate the cost per watt if they chose to go solar so as to determine what is worth buying and after how long they are going to recover their cost.
Where one lives in places not covered by the power grid and there is no hope of getting such a connection in the near future, it makes a lot of sense to install modules with a high energy conversion ratio. This in the end will turn out to be economical since the cost per watt shall be stretched over a long period of time becoming negligible as is the case with modern solar units that last for 20 to 30 years.
For the time being however the problem still persists of how to make cheap semiconductors that can be applied in solar technology with efficiencies of around 80%. Experiments are being conducted using nanotechnology which many believe will provide those answers. Other problem areas such as current conversion and transfer are also being handled using nanotechnology. Micro-inverters have been developed for example that convert DC to AC right at the panel.
Scientists are scratching their heads in many laboratories across the world and every now and again you will hear that this or that facility has come up with a novel idea to beat these problems. What now remains to be done is for an efficient concept to be commercialized at a cost that achieves parity with other energy sources such as nuclear.