A measurement of how much of the input electrical energy to a speaker is converted into sound. The remaining energy is converted to heat. Most direct radiator speakers are 1 or 2 percent efficient; a horn-loaded speaker might approach 20 percent, some reach as high as 30 percent. High efficiency means that a lower powered amplifier can be used to produce the same level, but there is also a case to be made for less efficient speakers actually being more accurate due to better damping and less susceptibility to resonances.
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