Photovoltaic systems may underperform expectations for several reasons, including inaccurate initial estimates, suboptimal operations and maintenance, or component degradation. Accurate assessment of these loss factors aids in addressing root causes of underperformance and in realizing accurate expectations and models. The performance loss rate (PLR) is a commonly cited high-level metric for the change in system output over time, but there is no precise, standard definition. Herein, an annualized definition of PLR that is inclusive of all loss factors and that can capture nonlinear changes to performance over time is proposed. The importance of distinguishing between recoverable and nonrecoverable losses which underly PLR is highlighted.