Nominal power (photovoltaic)
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The nominal power of a photovoltaic module is determined by measuring current and voltage while varying resistance under defined illumination. The conditions are specified in standards such as IEC 61215, IEC 61646 and UL 1703; specifically the light intensity is 1000W/m2, with a spectrum similar to sunlight hitting the earth's surface at latitude 35°N in the summer (airmass 1.5) and temperature of the cells at 25°C. The power is measured while varying the resistive load on the module between open and closed circuit. The maximum power measured is the nominal power of the module in watt. The nominal power divided by the light power that falls on the module (area x 1000W/m2) is the efficiency.
The nominal and maximum power is important to the technician planning the installation, to correctly dimension alternating-current converters and the cross-sectional area of the wire. But it is not a good measure to compare solar modules and prices. The output in kWh per m2 is much better suited.
The international System of Units does not allow to use suffixes or add symbols. Despite this, 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). Watt-peak (Wp), kilowatts-peak and megawatt-peak are also used. In the context of domestic 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 1000W/m2 (which corresponds roughly to midday in summer in, for example, Germany), or when sun irradiation close to 1000W/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, 2009-08-14.