You can’t get something from nothing. When it comes to voltage regulation, you can’t make a well regulated output from the exact same input voltage. The difference between the input voltage level and the closest output voltage level is called the “dropout voltage” — dropout being the state at which the voltage regulator doesn’t work any more. Let’s look at the classic LM317 voltage regulator (this version from OnSemi):
Specified Minimum Dropout Voltage: 1.0V
Minimum Output Voltage: 1.2V
(Calculated) Minimum Input Voltage: 2.2V
Surprisingly, most linear regulators will not specify an input minimum as we calculate above. This is because it is dependent upon so many factors internal to the chip.
Each manufacturer has their own secret sauce for the internals of their regulators, but eventually each uses some form of transistor to govern the final output. Most modern linear regulators use FETs as this pass transistor, and the RDS(on) of that FET sets the actual value of VDROPOUT. In the end, the formula is simple Ohm’s Law: VDROPOUT = IOUTPUT x RDS(on). Thinking of the FET as a “variable resistor”, it is the voltage drop due to current flowing through that device that ultimately causes the difference between input and output.
By seeing Ohm’s Law in action, you can instantly tell that output current plays a huge part in understanding VDROPOUT. As the amount of current you need to draw from your voltage regulator increases, so does the level of input voltage needed to ensure you stay above dropout.
Since current is flowing through and voltage is dropping across this device, it means power is being consumed by the device. The above chart shows not only that the device will generate heat as a result of the power burn, but also that the internal resistance of the pass transistor goes down as temperature goes up.
Ultimately, every linear regulator will have some form of dropout voltage between input and output. This is a crucial parameter to check so that your design has sufficient overhead to generate your expected output voltage.