What is it worth for a PV manufacturer to improve solar cell efficiency? In this paper, we attempt to give an answer to this question by exploring a new metric: the value of efficiency (VOE). VOE defines the maximum allowable cost for an innovation by analysing iso-levelized-cost-of-electricity (LCOE) conditions when co-varying manufacturing cost and efficiency . The result is the amount in $/m2 that the fabrication of a solar cell can be more expensive if it is one percent more efficient. Because the metric is based on LCOE, this number depends on system configuration and location. We have used this tool to analyse various scenarios and technologies, and have found a number of noteworthy trends: By analysing the development of VOE over time, we observed that in the past, utility and residential market developed in parallel. That means that an innovation that would prove too expensive for utilities would quickly also become so for residential applications. Recently this trend has changed and either market is now converging towards a different value. This means that there are now innovations that are viable in the residential market, but are not for utilities. We conclude that PV technology will in the future see greater diversification depending on the target market. One example for this trend are tandem solar cells. We observe for various tandems that they improve LCOE in residential systems but lose out against single-junction solar cells in utilities.