Solar panels are deemed inefficient due to several inherent limitations. One significant factor is conversion efficiency. Although advancements have been made, the most efficient solar panel commercially available solar panels convert only around 20-22% of sunlight into electricity.

Moreover, solar panel performance is heavily reliant on sunlight availability, making them susceptible to variations in weather, time of day, and seasonality. Material constraints also play a role, with silicon-based panels, the most common type, being limited in their ability to capture sunlight across all wavelengths.

Solar panels are sensitive to temperature, experiencing decreased solar panel efficiency as temperatures rise. Furthermore, improving efficiency often entails higher production costs, prompting a delicate balance between efficiency gains and cost-effectiveness.

Finally, the intermittent nature of sunlight necessitates energy storage solutions, adding complexity and cost to solar energy systems. Despite these challenges, ongoing research endeavors seek to enhance solar panel efficiency and address these limitations to further promote the adoption of solar energy as a sustainable power source.