The authors are studying the diagnostic method of a PV system. In order to diagnose a PV system in detail, it is necessary to separate the loss factors affecting power generation efficiency. In this paper, we are investigating the influence of the solar irradiance and the incident angle on power generation efficiency of the PV module installed at tilt angle of 90 degree and azimuth angle of east and west, respectively. Especially, the influence of the incident angle on power generation efficiency is estimated in detail by separating direct and diffuse component of solar irradiance. We investigate the comparison between the measurement and the calculation results related to the change of power generation efficiency with time. The calculation value considering solar irradiance and incident angle of direct and diffuse solar irradiance almost corresponded to measurement value. As a result, it is clear that the change of power generation efficiency with time can be estimated by separating the influence of solar irradiance and incident angle of direct and diffuse solar irradiance and considering these loss factors.