What is the 120% rule for commercial solar panels?

What the 120% rule actually is

The “120% rule” in commercial solar refers to the DC-to-AC ratio in system design. It means oversizing the DC array capacity (panel nameplate) by up to 120% of the inverter AC capacity. So a 100 kW inverter would be paired with up to 120 kWp of panels.

The reasoning is straightforward: solar panels rarely produce their full nameplate power. Standard Test Conditions (STC) — 1000 W/sqm irradiance, 25°C cell temperature, AM1.5 spectrum — are achieved in real-world UK installations for only a few hours per year. Most operating time, panels produce 60-85% of nameplate output.

Oversizing the DC array means more of the inverter’s AC capacity is used during normal operating conditions, improving annual yield. The trade-off: during peak irradiance (occasional bright summer noons), the inverter “clips” — limits output to AC nameplate — and some potential energy is lost.

Why 120% and not higher?

For UK installations, the optimal DC-to-AC ratio typically lands between 110% and 130% depending on:

Latitude and irradiance. Southern England (40+°N) supports higher DC-to-AC ratios than Scotland (55+°N) because peak irradiance is rarer.
Panel orientation. South-facing arrays peak harder than east-west arrays. East-west arrays support higher DC-to-AC ratios (often 125-135%) because their generation profile is flatter through the day.
Inverter efficiency curve. Modern string inverters (Solis, Huawei, Sungrow) maintain >98% efficiency from 25% to 100% of nameplate — meaning DC oversizing improves average operating efficiency.
Clipping loss tolerance. Most modern designs accept 1-3% annual clipping loss as the price of higher yield through the rest of the year.

The “120%” figure is a rule of thumb landing in the middle of this band — neither aggressive nor conservative. Most well-designed UK commercial systems sit at 115-125% DC-to-AC ratio.

The PVSyst model

Proper system design uses PVSyst (or equivalent) to model the specific DC-to-AC ratio that maximises 25-year NPV. The model accounts for:

Latitude, longitude, altitude
Hour-by-hour historical irradiance (PVGIS European Commission data)
Panel orientation, tilt, azimuth
Shading from adjacent buildings, vents, parapets, chimneys
Inverter efficiency curve at each operating point
Cabling losses
Temperature derating
Panel degradation over 25 years

We run PVSyst on every commercial proposal. The DC-to-AC ratio that maximises NPV typically lands between 112% and 128% for UK office installations.

What this means for office solar procurement

If you’re reviewing commercial solar quotes, two checks help validate the proposal:

What DC-to-AC ratio is being designed? A quote showing 100% (DC = AC) is leaving 5-10% of annual yield on the table. A quote at 140%+ is accepting unnecessary clipping loss. The sweet spot is 115-125%.
What annual yield is being modelled? UK rooftop solar at optimal orientation should deliver 900-1,050 kWh per kWp per year. East-west arrays land 820-950 kWh/kWp. If the proposal shows materially less, the system design isn’t capturing available yield.

Every proposal we deliver includes the PVSyst yield model and explicit DC-to-AC ratio in the technical specification. We’re happy to talk through the underlying assumptions on any specific project.

Request a feasibility study with full PVSyst yield modelling.