The nominal power of a PV module is based on Standard Test Conditions (STC) conditions:
- Irradiance: 1,000 W/m²,
- Module temperature: 25°C,
- Air Mass: 1.5
or Normal Operating Cell Temperatures (NOCT):
- Irradiance: 800 W/m²,
- Ambient temperature 20°C,
- Wind speed: 1m/sec.
The electrical resistance of a conductor increases with its temperature. Photovoltaic cells as semi-conductors follow that rule. The power temperature coefficient is approximately -0.4% / °C. The efficiency decreases when the ambient temperature increases. PV modules operating in a cold climate, such as in Canada, will have better overall efficiency than if they were installed in a warmer location, such as for example California.
According to a simulation of annual energy yield taking into account the hourly ambient temperature, a typical overall efficiency loss in the north due to temperature is 1.1%. This loss factor would be much lower in warmer climate.