The efficiency of photovoltaic (PV) panels is critically influenced by environmental and operational factors, with partial shading being one of the most significant. PV panels, composed of silicon-based cells, are designed to operate under uniform conditions; however, shading—caused by obstacles, moving clouds, or seasonal variations—can induce mismatch losses, reduce energy yield, and create localized hotspots that affect panel reliability and lifespan. This paper reviews the mechanisms through which partial shading impacts PV performance, highlighting its unpredictability, variability, and unavoidable nature. The study synthesizes existing research on shading patterns, duration, and intensity, demonstrating that even small shaded areas can reduce total power output by up to 10%. Understanding the effects of partial shading is essential for optimizing PV system design, improving energy harvesting efficiency, and ensuring long-term durability of solar installations. The review provides insights for researchers, engineers, and policymakers to develop mitigation strategies and enhance the reliability of solar energy systems.