What is PVSyst? Basic loss calculations you should know before design

When working on solar power generation design, the name in the title often prompts more frequent investigations into the role and reliability of power-generation simulation software. What many practitioners want to know first is "what can this kind of software tell us?", but the differences that matter in actual design stem less from the operation itself than from how deeply one understands the approach to loss calculations.

Annual energy production is not determined simply by irradiance and system capacity. The final value is the result of multiple losses stacking up, such as installation orientation, tilt angle, shading, temperature, soiling, wiring resistance, power conversion efficiency, output curtailment, and downtime. Even a simulation that looks finely detailed can yield widely varying results if the input assumptions are coarse. Conversely, if you understand the structure of the losses, it becomes easier to conduct highly accurate comparisons and evaluations even at an early stage.

In this article, using the name in the title as a starting point, we organize from a practical perspective the roles common to power generation simulation software and the basic loss calculations you should know before design. The discussion is focused on content that will be useful both for those encountering simulation for the first time and for experienced designers reviewing their assumptions.

Table of Contents

• What does power generation simulation software do?

• Why do loss calculations affect design quality?

• How are loss calculations carried out?

• Accuracy is determined by the input of meteorological conditions and installation conditions

• Main losses occurring on the solar PV module side

• Main losses that arise from wiring, conversion, and operation

• Considerations for shading and layout

• How to read simulation results

• Common misconceptions prior to design

• The accuracy of on-site measurements changes loss calculations

• Summary

What does power generation simulation software do?

The basic role of power generation simulation software is to estimate, based on weather conditions and equipment conditions, how much electrical energy can be expected annually or monthly when a solar power generation system is installed at a given location. What distinguishes it from a simple rough calculation is that it can progressively account for factors such as how solar irradiance strikes the site, installation angle, temperature effects, shading, and losses in wiring and conversion equipment, ultimately translating those into final AC output, the amount that can be sold to the grid, or the amount available for self-consumption.

These kinds of software are valuable in practice because they make it easy to numerically compare design differences that cannot be judged solely by the size of equipment capacity. For example, on the same site, rotating the orientation slightly can change whether generation is skewed toward the morning or maximized at midday. Changing the height of the racking or the spacing between rows may increase land use efficiency but could also increase shading effects. If you change the capacity ratio of power conversion equipment, you can rationalize initial equipment selection, but it may increase instances of output saturation during certain time periods. The great value of power generation simulation software is that it allows multiple design proposals to be compared on paper.

However, the important point here is that this kind of software is not a "device that predicts the future" but a "reproduction model based on the assumptions you set." If the meteorological data you input deviates from actual conditions, the results will naturally be off as well. If the height or position of obstacles that cast shadows is ambiguous, the shading losses will also be uncertain. If the assumptions about equipment characteristics are lax, temperature losses and conversion losses will produce values that are far from reality. In other words, more than knowing the name of the software, understanding what assumptions are made and to what extent losses are incorporated will determine the quality of the design.

Also, the required accuracy of power generation simulations varies depending on the context in which they are used—such as rough estimates during the sales stage, comparisons in basic design, refinements during detailed design, support for financing plans, and verification of actual performance after commissioning. Speed is prioritized in the sales stage, while verification of input values is prioritized in detailed design. Reusing the same initial values at every stage may be sufficient for preliminary studies but can be coarse for the final design. That is precisely why it is meaningful to understand the framework of loss calculations before the design phase.

Why Loss Calculations Determine Design Quality

One of the most common misconceptions when considering solar power generation is the belief that increasing installed capacity will proportionally increase energy output. Of course, within a certain range, increasing capacity does lead to higher generation. However, in reality, the more capacity you add, the closer the row spacing becomes and the more likely shading effects will occur. On rooftops, conditions on some surfaces may worsen in order to avoid obstacles. If the capacity balance with the inverters is disrupted, output can top out during midday high-irradiance periods, and it is not uncommon for annual generation to fall short of the increase suggested by the apparent capacity gain.

Loss calculations are important not only for the final energy production but also because they provide the basis for prioritizing design decisions. For example, if temperature losses dominate a project, a racking plan or module layout that improves ventilation will be more effective than simply increasing capacity. If shading losses are significant, rather than forcefully filling the available area, organizing the layout to reduce the periods when shadows occur will tend to stabilize annual revenue. If wiring losses are large, revising circuit configurations and equipment placement is effective. Thus, if you cannot identify which losses are dominant, you will prioritize countermeasures incorrectly.

Furthermore, loss calculations are directly tied to building consensus both inside and outside the company. Sales representatives need to explain the validity of proposed figures, and design staff need to provide the rationale for equipment selection and layout. For construction teams, it is crucial whether the numbers on the drawings can be realized on site. Operations staff need to know which loss factors to suspect when actual performance deviates from predictions after start-up. When the approach to losses is shared, it becomes easier to avoid a situation where the power generation figures take on a life of their own.

Loss calculations are not done solely for economic reasons. Overly high estimates undermine the credibility of the entire plan, while overly low estimates can cause you to miss projects that would otherwise be viable. Especially in the early design stages, many elements are not yet finalized, so losses tend to be lumped together and assumed uniformly. However, what is harder to correct later are layout-induced losses—such as site shape, obstacle conditions, wiring routes, and the placement of conversion equipment—rather than the DC performance of the panels. Precisely for that reason, breaking down and understanding the loss structure before design reduces the amount of rework later.

What is the process for performing loss calculations?

The key to understanding loss calculations is to trace, step by step, the flow of solar radiation until it becomes the final AC power. The first factor is the meteorological conditions — how much solar energy is available at that site. This involves not only the irradiance on a horizontal plane but also the direct and diffuse components, the ambient air temperature, and, in some cases, the influence of wind. Next, consider how that irradiance actually strikes the installation surface. The energy received varies depending on whether the module surface faces south or east/west and on the tilt angle.

However, not all of the solar irradiance that reaches the installation surface is converted directly into electrical power. When the angle of incidence is shallow, surface reflection increases and the effective utilization rate of the irradiance can decrease. As temperature rises, power conversion efficiency drops, and under low irradiance conditions the behavior departs from rated conditions. Variations between modules and imbalances in current cause mismatch losses. Soiling, snow, and other surface deposits also reduce the amount of incident light. In other words, multiple losses are already subtracted between the irradiance on the installation surface and the resulting DC output.

Furthermore, the power obtained as direct current is also partially lost in wiring and connection points. Conversion equipment incurs efficiency losses when converting to alternating current, and depending on the relationship with equipment capacity, output capping can also occur. There can also be losses in AC-side wiring and transformer/substation equipment, and due to grid-side constraints or equipment outages, theoretically generated power may not be delivered to the grid as-is. Therefore, loss calculation is not simply a matter of "what percentage to subtract at the end," but a process of accumulating the reductions at each stage along the flow of power generation.

When you understand this sequence, it also becomes clear why you must not simply add loss rates. One loss can act upstream of another and change the reference amount of energy itself. For example, if shading reduces incident solar radiation in the first place, the subsequent temperature rise will also change, and as a result the way temperature loss appears will change. Conversely, if a well-ventilated layout lowers module temperature, the DC output will change even under the same meteorological conditions, and the saturation behavior of downstream power-conversion equipment will also change. Losses are not necessarily independent of one another, and that is why how you set the assumptions is important.

In practice, the key is to keep this flow in mind and examine "which stage has the largest losses," "whether those losses can be reduced by design," and "whether reducing them would increase other losses." To use loss calculations for design decision-making rather than merely as a verification step, you need to understand not only the numbers but also the locations and causes of the losses together.

Accuracy is determined by the input of meteorological and installation conditions

No matter how advanced the computational software is, the reliability of the results will not improve if the input conditions are coarse. Particularly important are the meteorological conditions and the installation conditions. For meteorological conditions, representative annual solar radiation data and temperature data form the basis. What is used here is often not the measurements from a single year, but standard meteorological year data that have been made representative by combining observations from multiple years. This is useful for obtaining trends close to long-term averages, but it does not fully reproduce actual single-year variability. Therefore, when reading predicted values, it is important not to forget that they represent an assumption of an “average year.”

Also, meteorological data obtained under the same place name can reflect different realities between coastal and inland areas, lowlands and highlands, and urban and mountainous areas. If you rely solely on representative-point data without any consideration of local temperature trends, fog frequency, snowfall, or terrain influences, assumptions about solar radiation and temperature can be misplaced for the actual project. Even if you use broad-area data for preliminary studies, it is safer to be aware of how much local climatic differences should be taken into account once you enter the detailed design stage.

Important installation conditions include azimuth, tilt angle, mounting height, row spacing, obstacle positions, ground reflectance, and ventilation conditions. Azimuth and tilt are basic parameters that directly affect power generation, but they are not sufficient on their own. For example, even with the same tilt angle, module temperature—and thus temperature-related losses—can differ between rooftop-mounted installations with poor rear ventilation and ground-mounted racking with good rear airflow. Narrow row spacing increases self-shading in winter and at dawn and dusk. Surrounding fences, mechanical equipment, trees, adjacent buildings, and terrain undulations can cast shadows in different locations depending on the time of day and season, so plan views alone may not be sufficient for assessment.

Shading and ventilation conditions are the factors most likely to cause large discrepancies in input accuracy. For shading, it is not a matter of whether it exists or not but of when it occurs, to what extent, on which circuit, and at what angle. Ventilation cannot be assumed adequate simply because it is outdoors; heat pooling can occur due to roof upstands, rear-side airspace, and surrounding obstacles. During on-site checks before design, understanding not only the dimensions but also relative heights and the shapes of obstacles will significantly stabilize subsequent loss assessments.

In engineering design practice, the earlier the stage when input values are not yet finalized, the more important it is to be consistent in how assumptions are made. Using inconsistent premises—for example, assuming modest fouling losses for one project and conservatively large temperature losses for another—makes project comparisons themselves unfair. First comparing on the same basis and then adjusting for site-specific characteristics makes it easier to connect loss calculations to design decisions.

Main losses occurring on the solar module side

Losses on the solar module side directly affect the baseline power output, so this is an area you most need to understand before design. A typical example is losses due to the angle of incidence. The shallower the angle at which sunlight strikes the module surface, the more reflection occurs at the surface and the less light is effectively captured. This is most noticeable in the mornings and evenings and during winter, and the way it affects output varies depending on the chosen orientation and tilt. Rather than looking only at the total solar irradiance, you need to consider at what times and at what angles the module will receive light.

The next major loss is temperature loss. Solar photovoltaic modules generally see voltage drop and reduced output as temperature rises. A common misunderstanding is that the ambient air temperature is the same as the module temperature. During summer daytime with strong solar irradiance, the module temperature can far exceed the ambient temperature. Conversely, mounting structures that allow good airflow or designs with ample rear ventilation space make it easier to limit temperature rise. In other words, temperature losses are not determined solely by weather conditions but depend strongly on the installation structure and layout.

Behavior under low irradiance cannot be ignored. Modules are often discussed only in terms of their performance values under standard conditions, but actual operation is not made up solely of high irradiance. During mornings and evenings, overcast skies, and seasonal variations, efficiency characteristics at low irradiance affect annual energy production. In practice, attention tends to be drawn to peak output under high irradiance, but if you want to refine annual figures, how you handle low-irradiance periods is also important.

Mismatch losses are also easily overlooked. Module-to-module variations, temperature differences, uneven soiling, partial shading, etc., can cause currents and voltages within the same circuit to be unbalanced, so the circuit as a whole will lose power that could otherwise be extracted. In particular, for projects where roof surfaces face multiple directions or where shadows from obstacles fall on only some modules, it is important not only to consider simple area efficiency but also which modules are grouped into the same circuit. In loss calculations, it is important not to treat geometric layout and electrical connections separately.

Soiling loss is another loss that people tend to assign a uniform value to on paper, yet it shows large site-to-site variation. The way surfaces become soiled over a year depends on whether the surroundings are dusty, prone to bird fouling, on a slope where rain easily washes them off, or nearly horizontal. In coastal areas there may be salt deposition, near farmland there may be soil dust, and in industrial zones atmospheric pollution can also play a role. In the early stages with no historical performance data, conservative assumptions are necessary, but estimating the loss too large will distort project evaluations.

Furthermore, in long-term assessments, how to treat initial degradation and annual degradation is also a point of debate. If you only look at single-year energy production, the impact is limited, but if you examine multi-year cash flows, it cannot be avoided. The important thing here is not to lump short-term losses together with long-term performance decline. Distinguishing whether a change occurs in the first year or progresses gradually year by year makes it easier to compare design values with operational performance.

Major losses incurred in wiring, conversion, and operation

Losses that occur in modules tend to attract attention, but when viewed across the entire system, losses due to wiring, power conversion equipment, and operating conditions cannot be ignored. The fundamental one is wiring loss. On both the DC side and the AC side, whenever current flows, power is lost as heat due to resistance. Under conditions such as long distances, insufficient cross-sectional area, or impractical circuit design, the proportion of generated power consumed within the equipment increases. Wiring losses may seem modest, but because they are directly linked to layout and equipment placement, they are among the losses that are easiest to improve through design.

Another important factor is conversion losses. Devices that convert direct current to alternating current have efficiency curves and do not always operate at the same efficiency. There are ranges where efficiency increases at high load, and conversely they can be relatively disadvantaged at low load. Therefore, judging only by the equipment's rated efficiency may not match as well over a year as you might expect. If you want to see annual power generation correctly, you need to be aware of which load ranges the equipment spends more time operating in amid fluctuations in solar irradiance.

Output clipping caused by the capacity ratio is a loss you should understand from the early design stages. Increasing the DC-side capacity makes it easier to improve utilization during mornings, evenings, and cloudy periods, but during sunny periods with high solar irradiance it can reach the AC-side limit of the converter, preventing any additional output from being extracted. This may seem like a loss at first glance, but over a year it can be rational. What matters is to quantify when and how much clipping occurs, and how much can be recovered during low-irradiance periods as a result. Loss calculations are used not only to avoid clipping but also to determine the optimal capacity ratio.

On the operational side, equipment downtime and availability also affect power generation. If there are scheduled inspections, fault responses, communication failures, protective operations, or shutdowns due to external factors, the theoretical generation cannot be obtained as-is. Especially when creating long-term generation forecasts, you need not only the performance of the equipment itself but also an estimate of the time it will be able to operate. In post-commissioning performance evaluations, if this availability is not separated out, design-related losses and operation-related losses will become mixed.

Furthermore, depending on the project, output curtailment and constraints on the receiving side must also be taken into account. Even if there is generating capacity, if there are times when power cannot be dispatched due to grid or receiving-equipment conditions, that constitutes a real loss. The important point here is not to treat physical losses and regulatory/operational constraints as equivalent. The former may be reduced through equipment improvements, while the latter are easier to assess if managed separately as planning or operational conditions.

Approach to Shadows and Layout

Among loss calculations, the aspect that practitioners struggle with most is handling shading. Because shadows are visible, they tend to be underestimated, but in reality geometric shading and electrical output reduction overlap, so they cannot be evaluated by a simple area ratio alone. For example, even if only part of a module is shaded, depending on the circuit configuration the impact can spread to the output of the entire module. In other words, shading should be assessed not by "how many panels are darkened" but by "where, at what times of day, and to what extent it occurs."

Shading includes near-horizon obstruction caused by distant terrain and localized shading from nearby obstacles. The influence of distant terrain tends to be stronger at low solar elevations in the morning, evening, and winter, with mountains, hills, and surrounding groups of buildings being the main factors. Typical nearby obstacles include roof upstands, mechanical equipment, fences, utility poles, trees, and adjacent buildings. These have complex shapes, and the locations where shadows fall can change greatly with season and time of day. Moreover, because the assessment changes even if obstacle height information is slightly off, the accuracy of on-site measurements determines the results.

In layout design, simply widening the spacing to reduce shading losses is not necessarily the right approach. Widening the spacing reduces the number of installed panels and can lower the installed capacity itself. Conversely, packing them too closely increases self-shading, which has a significant effect during winter mornings and evenings. Therefore, the important thing is not to eliminate shadows entirely, but to find the arrangement that best balances annual energy production and installed capacity. A useful method here is to compare different row spacing, tilt angle, azimuth, and mounting height. You need to evaluate not only how it looks visually but also whether the annual loss structure is reasonable.

Roof projects require extra caution. Even on the same roof, each plane can have a different orientation, and there may be complex upstands and rooftop equipment. Whether to prioritize only the faces with minimal shading or to secure sufficient area even if some shading occurs must be considered together with how the connection circuits are arranged. For ground-mounted projects, terrain slope and site development conditions affect the height relationships between rows, which can cause more self-shading than expected. It is not uncommon for something that looks good on a two-dimensional drawing to suffer large losses when viewed in three dimensions.

In shadow assessment, it is useful not only to look at the final loss rate but also to examine which seasons and times of day during the year the shading is likely to occur. Whether shading falls in the high-irradiance period around noon or only in the early morning when the generation contribution is small can greatly change the annual impact. If you can understand the nature of the shading, mitigation options beyond design—such as relocating obstacles, changing aisle layouts, or reconsidering equipment placement—become apparent.

How to Interpret Simulation Results

When you receive the results of a power generation simulation, it is risky to judge based solely on the annual generation number. The yearly total is only the final result, and unless you examine the breakdown of losses behind it and the seasonal variations, you won't be able to identify design weaknesses. The first thing to check is whether the month-by-month generation trends align with the local climate and orientation conditions. Looking at whether output stalls in summer due to rising temperatures, whether solar incidence angles or shading have a large impact in winter, and how production falls during the rainy season or the snow season makes it easier to verify the validity of the assumptions.

The next thing to look at is the breakdown of losses. By identifying at which stage energy is being lost, you can see the direction for design improvements. If thermal losses are large, you should examine the structural design and ventilation conditions; if shading losses are large, there may be room to review the layout and the presence of obstructions. If wiring losses are large, reconsidering equipment placement and cable design is effective. Conversely, spending too much time on losses with little room for improvement will steer you away from overall optimization. It is important to assess losses not only by whether they are large or small but also by whether they can be improved.

Indicators equivalent to the performance ratio are also useful for assessing the soundness of results. This type of indicator helps to decouple differences in solar irradiance conditions to some extent and to understand how efficiently the system extracts energy. However, a high value does not automatically mean excellence. If shading or severe temperature conditions are not sufficiently accounted for, the value can appear artificially high. Conversely, including too many conservative assumptions can make it look unnecessarily low. For this reason, it is necessary to interpret it together with the loss breakdown and monthly trends rather than rely on a single indicator.

Also, in design comparisons it is practical not to treat a single result as absolute, but to examine how much each item moves when assumptions are changed. For example, if soiling losses are increased or decreased slightly, by what percentage does annual energy generation change? If row spacing is widened, how much do shading losses decrease at the expense of how much installed capacity? When the capacity ratio is changed, the saturation point may rise, but how does the yield in low‑irradiance bands change? Viewing sensitivities in this way makes it easier to respond if design conditions change later.

The final important point in interpreting results is not to attach excessive meaning to fine decimal places. Power generation simulations perform precise calculations, but the inputs inevitably contain uncertainties. You cannot perfectly predict how the site will become soiled in the future, single-year weather variability, operational outages, or changes in the surrounding environment. Therefore, it is important to treat the results not as the "truth with many significant digits" but as a "reasonable forecast with its underlying assumptions clearly stated."

Common misconceptions before design

One common misconception before design is the belief that it is sufficient to use the initially entered loss rate as-is. Initial values are merely general starting points and provisional placeholders to be adjusted to match site conditions. The same loss rate does not automatically apply to rooftop projects and ground-mounted projects, to cold regions and warm regions, or to areas with high levels of dust and those with low levels. Using the initial value itself is not wrong, but if you cannot explain why that value was adopted for the project, it becomes a weak basis for the design.

Another common assumption is that shading loss is roughly equal to the proportion of the area that is shaded. In reality, the impact can vary greatly depending on the location and timing of the shade, the circuit connections, and how effectively bypass diodes operate. A very small shaded area can sometimes cause widespread output reduction, while conversely, even if a shadow looks large, if it occurs during times when generation contribution is low the annual impact may be limited. It is important not to judge shading solely by the impression from a plan view.

Also, it's risky to simply assume that summer, because of its strong sunlight, is the easiest time to generate electricity. While summer does have greater solar radiation, module temperatures tend to rise, increasing temperature-related losses. In some regions, the rainy season or high heat and humidity can also have an effect, so conditions aren't necessarily ideal for power generation. Conversely, periods like spring and autumn, when temperatures are relatively low yet sunlight is still available, can allow systems to operate more efficiently. Monthly generation trends should not be decided based solely on simple measures of solar radiation.

Furthermore, when simulation results are presented with detailed graphs and numerous items, it can lead people to feel they are highly accurate. However, visual detail and the reliability of the input conditions are separate issues. If obstacle heights are estimates, roof dimensions are approximations, and meteorological conditions are average values for representative locations, then even if the calculations themselves are precise, uncertainty in the results remains. Rather than being reassured by a precise display format, it is more important to verify the basis for the inputs.

Another misconception is the idea that all losses should be avoided. In practice, reducing one loss can increase other costs or constraints. For example, if row spacing is widened too much to drastically reduce shading, installed capacity can decrease and total power generation can fall. If capacity is oversized in an attempt to completely avoid power-conversion equipment hitting its limit, it can become inefficient on an annual basis. The important thing is not to aim for zero losses but to find the optimal balance for the project as a whole.

On-site measurement accuracy affects loss calculations

As we've seen so far, many loss calculations are influenced by the input conditions. In particular, items such as shading, row spacing, obstacle clearance, installation orientation, and elevation differences are areas where the accuracy of on-site measurements is directly reflected in simulation accuracy. In other words, gathering precise location information before design is just as important as mastering the design software.

On site, it is not uncommon for drawings to be outdated, the actual positions of obstacles to differ from the drawings, rooftop equipment height information to be missing, or post-development ground elevations not to have been updated. Proceeding with loss calculations under those conditions makes optimizing row spacing, reproducing shadows, and deciding on aisle clearances unstable. In particular, roof upstands, fences, air-conditioning equipment, trees, and slopes cannot be fully understood from a plan view alone, and if heights are not recorded on site, large discrepancies can arise later.

As a means to improve pre-design measurement accuracy, smartphone-mounted high-precision GNSS positioning devices like LRTK are well suited. If you can capture the positions and heights of obstacles, site boundaries, and candidate installation locations on site with high accuracy, the input conditions for shading and the premises for layout considerations become stable. As a result, desktop power generation simulations cease to be mere estimates and move closer to design decisions backed by on-site information.

Of course, having a high-precision positioning device does not automatically produce a good design. What matters is organizing the acquired coordinates and elevation information in a form that is effective for loss calculations. Designers need to interpret which obstacles will be shading factors at which times of day, which surface height differences will affect row layouts, and which aisle plans will influence the balance between installed capacity and shading. In that sense, it is easier to think of LRTK not as a replacement for design software but as a field-side tool to raise the baseline accuracy for loss calculations.

When aiming to improve the accuracy of power generation simulations, many people tend to focus only on revising software settings. However, in reality, "pre-input information" — such as the height of equipment that casts shadows, the positions of roof edges, variations in ground elevation, and the accuracy of site boundaries — has a major impact on results. Acquiring high-precision on-site information from the pre-design stage is not a detour in loss calculations; it is actually the most direct route. Simply having accurate positional data collected on site can dramatically change both the speed of layout review and the persuasiveness of internal explanations.

Summary

What people searching for the name in the title really want to know is likely not the name of the power generation simulation software itself but rather "how much they can trust those calculation results" and "what they should confirm before design." To put it plainly, what matters is understanding the structure of the loss calculations before operating the software. Power generation is determined by factors such as solar irradiance, azimuth, tilt, temperature, shading, soiling, wiring, conversion, and downtime, which accumulate step by step. Only by understanding where each loss occurs and how much can be improved through design can simulation results be used for design decisions.

What should be given particular emphasis before design is the input accuracy of meteorological conditions and site conditions. Using only representative weather data can be insufficient; on-site information such as the position and height of obstacles, ventilation conditions, row spacing, and elevation differences directly affect the results. When interpreting the results, it is essential not only to look at the total annual energy production but also monthly trends, the breakdown of losses, and to identify items that can be improved. If you understand the loss calculations, you can use the energy production figures not passively but as material to improve the design.

And the key to further raising the accuracy of such loss calculations is the quality of on-site measurements. If you want to secure accurate position and height information from the early stages of design, it is highly worthwhile to utilize high-precision positioning devices like LRTK. If you can establish a system that supports desktop simulations with actual on-site measurements, the reproducibility of shadow assessments and layout studies will improve, and it will be easier to reduce design rework. If you truly want to turn loss calculations into design capability, don’t confine the process to the software screen—review it including how you collect field data.