Today production of electricity in the world is mainly fossil fuel based. Eco-friendly power generation is a burning issue for power generation. Solar Energy solves this problem very well. Scientists are trying to increase the efficiency of Solar PV modules to use them more efficiently as an alternate source of fossil fuel for power generation. But efficiency of Solar PV Cells and Modules can reduce due to faults generated inside of them. This paper tries to analyze and calculate the reduction of efficiency for faults associated with Solar PV cell and modules. Besides, different fault detection procedures are also discussed that are adopted worldwide. Previous studies have concerned homogeneous systems with a large set of parameters being observed, while this study is focused on a more restrictive case. The first problem is to discover immediate faults occurring in solar panels. A new online algorithm is developed in MATLAB/SIMULINK based on similarity measures within a single installation. It performs reliably and is able to detect all significant faults over a certain threshold. The second problem concerns measuring degradation over time. ukryj opis