I use the word "efficiency" casually in my daily routine.
It is the ratio of the amount of useful work performed by anybody to the total input given. "Technically speaking, it is the ratio of useful work performed by any machine to the total energy given as an input."
For example, a steam engine has an efficiency of 60%.
It means that it is able to convert 60% of the steam energy into the mechanical energy. The rest 40% is lost to the surroundings.
Similarly, the efficiency of your solar roof is its ability to convert sunlight into usable electrical energy for consumption. It is important to know the efficiency of the solar panels for designing an optimum solar power system. If you are having space constraints then you need more efficient solar panels and if there is ample shade-free space on the roof then you can trade off with less efficient solar panels.
Electrical ratings of a solar panel under STC
The power ratings, voltage ratings and current ratings of your solar panel are the values obtained under Standard Test Conditions.
What is standard about them? The sun-light of value 1000 watts/m² is allowed to fall on the panel surface. The other important condition is temperature, the solar panel is kept at 25° C or 77° F when the light source is falling on its surface. The manufacturers then measure the voltage and current values and label them on the back of the panel. The power is measured indirectly which is the product of voltage and current (Power = Voltage x Current). Thereafter, the power rating is also marked behind the panel. "More efficient solar panel requires less space while less efficient one needs more space to produce the same amount of power."
The manufacturers make panels with ratings like 100 watts, 200 watts, 250 watts, and 300 watts so that it is easy to design the configuration like 1 kW, 2 kW, 3 kW and so on.
The solar panels are generally rectangular and making panels of desired rating occupies area which is mentioned below: 
Power rating of solar panels and the area occupied by them
The value of incident light (1000 watts/m²), power rating of the panel, and the area occupies by it become the basis for calculating the efficiency of the solar roof.
*(The area of panel is calculated by multiplying its length and breadth) Efficiency of the solar panel
In simple words, the efficiency is ratio of output by input.
The light falling on the panel surface is the input and it is converted into electrical energy which is the output. Let us calculate the efficiency of 200 watts solar panel: You can see in the table above, the area of 200 watts solar panel is 1.475 m². We need to calculate the power produced by the solar panel when its area is 1 m². Why? Because, the input is 1000 watts/m² and we should find the output by solar panel when its area is 1 m², making the base same (per m²) so that we can calculate its efficiency. Now, the 1.475 m² of solar panel is producing 200 watts Or 1 m² of solar panel is producing 200 watts/1.475 = 135.6 watts Through above calculation, we have made the base same (per m²). The Efficiency = (Output by solar panel when its area is 1 m²)/ (Input is sunlight falling on 1 m² area of solar panel (1000 watts)) I think you got it :) It is = 135.6/1000 = 0.1356 or 13.56% 
Similarly, you can easily know the efficiency of other panels.
Efficiency of solar panels with different power ratings and different areas.
You can see in the above picture that the 300 watt panel is the most efficient among all.
But the efficient panels come at higher price. "If you have two panels with the same power ratings, the one which is occupying the less area is the efficient." Area required
The occupied area of any solar-roof configuration varies with panel's area and its power rating.
Area occupied by 3 kW solar system under different configuration.
For example, a 3 kW residential roof-top solar power system will occupy:
The 3 kW system using 10 panels of 300 watts (10 x 300) is the most efficient (15.46%) among all the configurations as it is occupying the least area (19.41 m²).
* (The gap in between the panels is not considered while calculating the total area which is generally provided for air to pass through to keep the panels cool). Efficiency of your solar-roof
You can easily measured the efficiency, using following steps:
Conclusion:
If you have ample roof-space then buying the less efficient solar panels can be a prudent approach as these are cheaper in price.
But when you are having a limited space then the efficient solar panels can be a real help in designing the solar power system capable of meeting your electricity demand in a limited area. Are you interested in installing solar system at your roof-top? Then my solar feasibility spread-sheet could be a great help in determining the complete technical and financial feasibility before hand. Related Articles:
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