Shading losses of the diffuse irradiance component occur when objects block a portion of the sky view of a solar collector. Accurate PV system performance modeling must include a consideration of diffuse shading losses. Because of the difficulties in predicting the anisotropic distribution of the diffuse irradiance, existing models of diffuse shading necessarily contain simplifying assumptions. Scant published research has examined whether commonly-used models for diffuse shading provide a reasonable fit to field measurements for PV systems. We present the derivation of a three-dimensional diffuse shading model, examine the implications for diffuse shading losses, and discuss results from over five months of experimental measurements of diffuse shading for a tracking system in Colorado.Index Terms -photovoltaic systems, power system modeling, solar power generation, system performance.