Solar photovoltaic (PV) systems are widely used to mitigate greenhouse gases (GHG), due to their green renewable nature. However, environmental factors such as bird drops, shade, pollution, etc., accommodation on PV panels surface reduce photons transmission to PV cells, which results in lower energy yield and GHG mitigation potential of PV system. In this study, the PV system’s energy and GHG mitigation potential loss is investigated under environmental stresses. Defects/hotspots caused by the environment on PV panel surface have unknown occurrence frequency, time duration, and intensity and are highly variable from location to location. Therefore, different concentrations of defects are induced in a healthy 12 kWp PV system. Healthy PV system has the potential to avoid the burning of 3427.65 L of gasoline by 16,157.9 kWh green energy production per annum. However, in 1% and 20% defective systems, green energy potential reduces to 15,974.3 and 12,485.6 kWh per annum, respectively. It is equivalent to lesser evasion burning of 3388.70, and 2648.64 L of gasoline, respectively. A timely solution to defective panels can prevent losses in the PV system to ensure optimal performance.