The rapid expansion of photovoltaic (PV) systems underscores the need to understand environmental factors affecting their performance, degradation, and economic viability. This study comprehensively reviews 175 articles, classifying environmental factors such as atmospheric deposits (dust, sea salt, pollen), meteorological conditions (wind, temperature, humidity, rainfall, snowfall, hailstorms), shading, and solar irradiation variability. A novel multilevel classification of degradation modes is introduced, identifying failure mechanisms and their impacts. Key findings reveal performance losses of up to 60%-70% due to combined factors, while mitigation strategies, such as wind-induced cooling, can improve power output by 14.25%, and snow accumulation results in up to 12% annual energy losses. Performance metrics like Performance Loss Rate (PLR) and Degradation Rate (DR) are evaluated to quantify long-term impacts, with economic implications including potential revenue losses and maintenance costs. For instance, addressing dust accumulation in arid regions could save 20%-30% in annual cleaning costs while reducing energy inefficiencies. Recent advancements in AI-driven predictive maintenance are highlighted as pivotal for optimizing system performance and minimizing costs. This integrated analysis provides actionable insights for researchers, engineers, and policymakers, emphasizing the need for tailored strategies to enhance PV resilience and economic sustainability. By