Optimization of photovoltaic (PV) panel orientation is a significant part of economic evaluation. However, designing a PV system according to only one theoretical optimal orientation is challenging. Installing a PV panel at a specific orientation can cause low economic efficiency, depending on the features of the area. Therefore, in this study, a new term-the tolerance angle-is introduced for quantitatively analyzing the tolerance of the optimal orientation. This term provides a range for the optimal panel orientation according to the target loss and can be used in decision making for practical optimization of PV panel orientation. The validation of the assumption in the definition and calculation model for the tolerance angle is presented and analyzed. Additionally, a simple calculation formula for the theoretical optimal orientation and tolerance angle is derived. The formula can be used in practical applications without complex calculations or considerable data. The tolerance angle is useful in many practical applications, including sites with restrictions. The results of this study are expected to enhance the practicality of panel orientation optimization and thereby improve actual PV panel installation. (c) 2020 Elsevier Ltd. All rights reserved.