This article evaluates the performance of a 20 MW grid-connected photovoltaic system installed in the Naama region, southwestern highlands of Algeria. The production database used in this work was recorded between January 1, 2017, and December 2022, from the plant’s SCADA system. During the first 5 years of production, the final yield varied from 3.88 in winter 2020 to 6.30 h/day in summer 2017, while the reference yield varied from 4.45 to 7.05 h/day, the annual average performance ratio is equal to 83.35%, and the annual average capacity factor was found to be 20.05% for the monitored period. These data are then compared with the predicted outcomes by a detailed difference analysis using three widely used PV simulation tools: PVsyst, SAM, and PVSol. Results indicate that the actual data strongly coincide with those predicted by the PVsyst simulation, as confirmed by statistical indices. However, the degradation of the PV plants over the monitored period is quantified using a linear model and a CSD model and is estimated at −1.43 and −1.55 %/year, respectively. In summary, the photovoltaic system performance indices obtained are satisfactory compared to large-scale photovoltaic systems reported in other studies. Practical applications This study evaluates the performance and degradation of a 20 MWp photovoltaic system located in the highlands of Algeria. The results of this article will serve as a baseline for the future construction of PV plants to raise awareness among decision-makers about the beginnings of the deterioration of installations to allocate a budget for the maintenance and operation of these installations. The findings of this study have the potential to contribute to the wider adoption of Photovoltaic systems as a viable alternative to traditional energy in Algeria and especially in the Highlands.