Due to installation of photovoltaic (PV) panels in outdoor areas, they are subjected to lightning strikes which may cause degradation or complete damage, resulting in service interruption and added cost. Hence, it is crucial to provide an efficient and effective lightning protection system which requires some considerations to increase its efficiency and reduce its cost. Any damage to the PV system inverter causes service interruption, so it is important to analyze the transient voltages induced on the dc cables connected to the inverter during lightning strikes. In this article, the induced voltages on dc cables are calculated using the finite difference time domain (FDTD) method, which introduces high accuracy in transient studies. Important factors affecting the transient voltages on dc cables are studied, including the effect of lightning strike polarity and changing the separation distance between the PV panel and the isolated protection system. Moreover, the effect of modifying dc cable arrangement is studied, in addition to the impact of concrete foundation presence in the grounding system. Then, some recommendations are proposed which succeeded in reducing transient voltages on dc cables. In addition, the induced voltages calculated by FDTD are compared with those obtained by partial element equivalent circuit method.