Solar panels are designed to continue operating for decades, and most manufacturers guarantee they will produce energy efficiently for 25 years. Many panels will produce energy at a lower efficiency for another 20 years. Panel efficiency decreases over time due to chemical deterioration or just wear and tear after years of weather exposure. The National Renewable Energy Labs (NREL) has studied panel output and degradation — or efficiency reduction — and found that on average, panel efficiency goes down by 0.5 percent per year. So after 20 years, panels will produce 90 percent of the energy they produced in their first year.