Nominal power (photovoltaic)
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The nominal power of a photovoltaic (PV) module is determined by measuring in an electric circuit the current and voltage while varying the resistance under precisely defined illumination. These conditions are specified in standards such as IEC 61215, IEC 61646 and UL 1703; specifically the light intensity is 1000 W/m2, with a spectrum similar to sunlight hitting the earth's surface at latitude 35°N in the summer (airmass 1.5), the temperature of the cells being 25 °C. The power is measured while varying the resistive load on the module between an open and closed circuit (between maximum and minimum resistance). The highest power thus measured is the 'nominal' power of the module in watts. This nominal power divided by the light power that falls on the module (area x 1000 W/m2) is the efficiency.
The nominal and potentially maximum power is important to the technician planning an installation in order to choose correctly the size of alternating-current converters and the cross-sectional area of the connecting wires. It is not a good measure with which to compare solar modules and prices. The output in kWh per m2 is much better suited.
The international System of Units does not permit the use of suffixes or additional symbols. Despite this rule, in colloquial language, instead of stating "the nominal power of the module is 1 kW", it is stated "the module has 1 kWp" (kilowatt-peak). The terms Watt-peak (Wp), kilowatts-peak and megawatt-peak are also used. In the context of domestic PV installations, kWp is the most common unit encountered. 
Power output in real conditions
The output of photovoltaic systems varies with the intensity of sunshine and other conditions. The more sun, the more power the PV module will generate. Losses, compared to performance in optimal conditions, will occur due to non-ideal alignment of the module in tilt and/or azimuth, higher temperature, module power mismatch (since panels in a system are connected in series the lowest performing module defines performance of the string it belongs to), soiling and DC to AC conversion. The power a module generates in real conditions can exceed the nominal power when the intensity of sunlight exceeds 1000 W/m2 (which corresponds roughly to midday in summer in, for example, Germany), or when sun irradiation close to 1000 W/m2 happens at lower temperatures.
Although watt-peak is a convenient measure, and is the standardized number in the photovoltaic industry on which prices, sales and growth numbers are based, it is arguably not the most important number for actual performance. Since a solar panel's job is to generate electric power at minimal cost, the amount of power that it generates under real-life conditions in relation to its cost should be the most important number to evaluate. This "cost-per-watt" measure is widely used in the industry.
It can happen that a panel from brand A and a panel of brand B give exactly the same watt-peak in laboratory test, but their power output is different in a real installation. This difference can be caused by different degradation rates at higher temperatures. At the same time, though brand A can be less productive than brand B it may as well cost less, thus it has a potential of becoming financially advantageous. An alternative scenario can also be true: a more expensive panel may produce so much more power that it will outperform a cheaper panel financially. An accurate analysis of long-term performance versus cost, both initial and on-going, is required to determine which panel may lead the owner to better financial results.
- Die Verwirrung um das Watt-Peak, The confusion around watt-peak, 14 August 2009.