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DEFINITION of 'Efficiency'. A level of performance that describes a process that uses the lowest amount of inputs to create the greatest amount of outputs. Efficiency relates to the use of all inputs in producing any given output, including personal time and energy. Next Up.
Power is lost in the form of heat. Efficiency is the ratio of power out to power in, expressed as a percentage. If the efficiency is 90 percent, 10 percent of the power is lost in the inverter. The efficiency of an inverter varies with the load.