Solar Energy

How Does Solar Energy Work?

Solar panels in front of a fossil fuel power plant, highlighting the benefits of clean energy.
Visit our Facebook pageVisit our Twitter

The Sun shines and solar panels convert that sunlight into electricity, but how does solar energy work? How is the sun used to generate electricity? What makes solar panels create electricity? And how can you use solar energy to power your home? Read on to learn how solar energy works, and why this clean energy source is the future of power.

A hand in front of the sun, showing the power of solar energy.

What Solar Energy Is (And What Solar Energy Is Not)

Solar energy is the radiation that’s emitted from the Sun and fuels our planet. Solar energy is what keeps the Earth at a livable temperature, creates weather that provides rain and snow to plants and animals that need water to survive, and gets converted into chemical energy by the plants that we eat to feed ourselves.

To get more scientific, solar energy is made of photons, or tiny particles of energy that travel at the speed of light, contain no mass, and flow in waves. Throughout history, photons have captured the attention of great minds like Newton, Einstein, and Planck, and they are the basic unit of energy that solar technologies rely on.

Solar energy is also an abundant resource, and theoretically if we were able to capture all of it, enough solar energy hits the surface of the Earth every hour to provide the energy needed by humans for the entire year. (For you trivia buffs out there, the core of the Sun produces approximately 380 septillion Joules of energy per second, or 380 septillion Watts of power! A septillion is a trillion trillion, or a 1 followed by 24 zeros - a BIG number!)

That said, solar energy is not electricity. Solar energy has the potential to create electricity when harnessed in the right way, but solar panels do not just capture solar energy and feed that directly into your home’s electrical system. Solar energy must be converted into electrical energy before it can be used to power your home, and that is why solar panels are needed to capture and convert the power of the Sun into electricity.

How is solar energy produced?

How does solar energy work if the Sun first has to create massive amounts of energy that solar panels can then capture and convert into electricity? Like other stars in our solar system, the Sun is essentially a giant nuclear reactor. Within its molten, 27 million-degree Fahrenheit core, nuclear fusion combines (really more like “smashes together”) hydrogen atoms (H) to form helium molecules (He), creating positrons, neutrinos, and a whole lot of energy in the process.

The process of generating electricity from solar energy starts with nuclear fusion in the Sun’s core, which radiates out through the outer layers of the Sun, and across our solar system in the form of light and heat. This light and heat from the Sun covers the entire electromagnetic spectrum, from very high-energy X-rays all the way to ultra-long-wavelength radio waves. Though electromagnetic radiation comes in many different forms, 99% of the rays from the Sun reach us as visible sunlight, ultraviolet rays, and infrared rays (aka “heat”).

While the energy produced by nuclear fusion within the Sun takes thousands of years to reach the Sun’s surface, it only takes 8.5 minutes to travel from the surface of the Sun to the surface of the Earth, reaching us as sunlight, heat, and other forms of radiation.

How does sunlight generate electricity?

The answer to, “How does solar energy produce electricity?” is based on the relationship between solar panels and sunlight. To generate electricity from sunlight, the photons that the Sun radiates must be collected and converted into a usable format. This ability to create energy from sunlight is known as the “Photovoltaic Effect”.

So how is solar energy generated? The photovoltaic effect occurs when sunlight strikes the thin layer of silicon that makes up solar panels, and knocks electrons off of the atoms in that silicon. That kicks off the production of electricity using solar energy. Solar cells have a positive side and a negative side, so once those electrons are knocked free, they become negatively charged and will naturally seek out the positively charged protons to connect with.

How does solar power produce energy? Opposites attract, and the attraction of negatively charged electrons and positively charged protons is what makes solar power possible. This flow of charged particles from one side of the solar cell to the other side is what’s known as current, or direct current (DC) electricity.

The more sunlight that strikes a solar panel, the more electrons that get knocked free, and the more current that solar panel will generate. So if you’re asking, “How is solar energy converted to electrical energy?” just remember that solar panels convert more solar energy into electricity when there is more sunlight hitting them at more direct angles.

How is solar energy collected?

To answer, “How does solar energy generate electricity?” we need to talk about the two main ways to collect solar energy from the Sun and use it to generate electricity: photovoltaics (PV) and concentrating solar-thermal power (CSP).

If you’re wondering how does solar energy work, then you’re probably wondering about photovoltaics, which is what most people think of when they think of solar energy collection. With photovoltaics, solar panels like what you see on the roofs of homes and buildings are capturing energy through the photovoltaic process. Solar energy hits the silicon contained in solar modules, and the photovoltaic effect turns that energy into electricity.

While photovoltaics works well for smaller-scale projects, larger solar energy collection projects can use another process called concentrating solar-thermal power. CSP uses mirrors to reflect sunlight onto a receiver, concentrating the sun’s power into a small area. The energy from this concentrated sunlight heats a high-temperature fluid in the receiver, and this thermal energy can be used to spin a turbine or power an engine that generates electricity. The thermal energy generated by CSP can also be used for other industrial applications like chemical production, water desalination, food processing, and mineral processing.

In addition to producing electricity, solar energy can also be used for heating water, but there are many types of solar hot water systems, so we’re going to stay focused on using solar energy for electricity generation in this article.

How is solar energy converted into electricity?

When answering the question, “How does solar energy work?” it’s important to highlight what happens to solar energy after it’s collected. Solar energy is captured as direct current (DC) electricity, but it still needs to be converted into alternating current (AC) electricity in order to power the appliances, lights, and other electronics that are used in your home. This energy conversion is done by the solar inverter and is a critical step in the process of converting solar energy to electricity.

There are three main types of solar inverters that help convert solar power to electrical energy: string inverters, string inverters with power optimizers, and microinverters.

String inverters, also known as “central” inverters, are the simplest type of inverter, and most small-scale solar energy systems rely on them. With a string inverter, each individual solar panel is wired together into a “string”, and then multiple strings can be connected to the central inverter.

String inverters with power optimizers are a step up from the basic string inverter, and use a power optimizer that’s located next to each panel to “condition” the DC electricity and make it a constant voltage before it’s sent down to the main string inverter to be converted into AC electricity.

Microinverters offer the highest performance, and as a result, they are usually the highest cost solar inverter technology as well. With microinverters, each individual solar panel has its own small inverter located next to the panel. With this distributed system, microinverters convert DC electricity to AC electricity right on the roof, so they can adapt to more complicated system designs or even roofs with uneven shading where one panel might get more sunlight than its neighbor.

In addition to converting solar energy into electricity, you can also think of an inverter as the gatekeeper of the solar power system. How does solar power create electricity? Inverters convert DC electricity to AC electricity, but they also provide ground fault protection and system stats such as voltage and energy production.

How does solar energy output compare with fossil fuel energy output?

You may be thinking about solar energy in comparison to fossil fuel energy when asking the question, “How does solar energy work?” What are the differences between the two? What are the similarities? When comparing the energy output of solar power with fossil fuels, it’s important to consider the efficiency of each process, as well as the renewability of each energy source.

When it comes to efficiency, fossil fuels do have the upper hand, though solar power is becoming more efficient every year, at a much faster rate than fossil fuel improvements. When Bell Labs invented the first useful silicon solar panel in 1954, it was about 6% efficient. Since then, efficiency has just continued to improve, and researchers have recently been able to get as high as 46% efficiency from a solar panel by using advanced solar cell structures.

Right now, the typical solar panel used in a home installation is about 20% efficient, which means that about 20% of the solar energy that hits the solar panel is being converted into usable electricity. If you’re looking for the answer to, “How is solar power used to produce energy?” then you probably want to know how this production compares to other energy sources.

Traditionally, car engines convert gasoline into energy at about 20% efficiency as well, with the rest becoming heat energy that’s just wasted into the atmosphere. Coal is about 35-40% efficient, and combined-cycle gas plants, where the excess heat that’s generated as a byproduct of mechanical energy is also used to generate electricity, is around 55% efficient.

Efficiency isn’t the only number to compare though, since it’s important to consider the renewability of each energy source as well. You have to pay for 100% of the fuel source used to generate fossil fuel energy, and there’s only a finite amount of it available on Earth, so fossil fuels are not a renewable source of energy, and the inputs are expensive. Eventually we can run out of fossil fuels, and there’s no way to get more.

On the other hand, solar is a completely renewable source of energy, and the Sun sends us tremendous amounts of energy each and every day for free. We just have to capture a small amount of the Sun’s energy and use that to create electricity.

How does the cost of solar power compare with other forms of energy production?

In terms of cost per watt, the best way to compare energy sources is to look at global energy prices, which removes the impact of subsidies and scale. Historically, coal energy has averaged about $0.06 cents per kilowatt-hour (kWh). Fossil-fuel based steam energy averages around $0.05 cents/kWh, and natural gas can be as low as $0.03 cents/kWh. Alternative energy sources have caught up quickly though, and in 2016, a large commercial solar installation priced PV energy at $0.029 cents/kWh, making solar the cheapest form of energy available!

Solar power follows what’s called Swanson’s Law, named after solar panel manufacturer SunPower’s founder Richard Swanson. Swanson’s Law says that the cost of a solar module decreases by about 20% every time global solar capacity doubles. Just like other technologies, solar power improves over time, so if you’re thinking about how does solar energy work to produce electricity, keep in mind that costs go down and efficiency goes up as solar energy works better with improved technologies.

Because solar power is becoming more popular, decreases in costs are compounding over time, so the answer to, “How do we use solar power to generate electricity?” looks a lot different than it did just 10 years ago. In 2009, electricity from utility-scale solar was $359 per megawatt-hour (MWh). In 2019, just 10 years later, the price declined by 89% and utility-scale solar was $40 per MWh, making it the cheapest source of energy from new power plants being built.

For individual homeowners, the cost of solar is going to depend on a number of different factors, including system size, home location, financing options, equipment costs, available incentives and rebates, and more. Nationally the cost of installing home solar averages around $2.90/Watt, but that’s just an average, so the cost of solar in your area may be different. The easiest way to check what solar costs in your area is with a free Solar Savings Estimate from Palmetto, which uses your location to estimate how much you would save by going solar, and what you might expect to pay for your solar power system.

It’s difficult to compare the cost of solar power with the cost of other forms of energy, because you pay upfront for solar panels, and then you don’t pay for the power that the solar power system generates over time. Even if you finance your solar power system, you will eventually pay off that system, and the rest of the energy generated by your system is free. With fossil fuel power, you have to pay for the power you’re using as you use it, and the price can go up over time.

The average price of household electricity from utilities was $.13 cents/kWh in 2019, according to the U.S. Energy Information Administration, and the average annual electricity consumption for U.S. utility customers was 10,649 kilowatthours (kWh) per year, or an average of about 877 kWh per month. That works out to around $114 per month for fossil fuel power, though again, there’s a large range around that number depending on the cost of electricity, consumption levels, and other factors unique to each family and household.

How Does Solar Power Work With My Utility Company?

No answer to, “How does solar energy work?” would be complete without talking about the relationship between individual homes and the larger grid operated by the utility companies. Even after going solar, most households will stay connected to the grid. This allows you to power your home with clean renewable solar energy when the Sun is shining, then pull energy from the grid when needed, and you can even send energy back into the grid when your system produces more electricity than you need.

During installation, solar panels are connected to the grid with a bi-directional meter that’s designed to measure the amount of energy you pull from the grid, relative to the amount of energy you contribute to the grid via excess power produced by your solar array. How this shows up on your bill will depend on how utilities are structured in your area.

If you live in an area with net metering, every kilowatt-hour (kWh) of energy produced by your solar power system that gets contributed to the grid counts as a credit towards your energy bill. When your panels produce more energy than you use, the excess power is fed into the grid for use in your community. When your panels produce less energy than you use, you can draw electricity from the grid to power your home. Your bill will then be calculated based on the total energy you use, relative to the total energy you produce.

If you live in an area with time-of-use rates, your utility fees are structured to increase during peak usage hours and decrease during low usage or off-peak hours. In this case, solar storage may be an easy way to save money on your monthly utility costs by allowing you to tap into stored energy when rates go up, and rely on grid power only when rates are low.

What makes solar energy production better for the environment?

Switching to clean, renewable solar energy is one of the fastest ways to dramatically decrease your carbon footprint and reduce your reliance on fossil fuels. Generating electricity with fossil fuels releases greenhouse gases, including carbon dioxide (CO2), that lead to rising global temperatures and contributes to climate change.

Climate change has been linked to environmental and public health issues like extreme weather events, rising sea levels, and increased respiratory and cardiovascular disease, so by switching to solar energy you are helping to combat those issues and make the Earth a better place to live.

Unlike other energy sources, solar power doesn’t disrupt ecosystems or release harmful pollutants into the air and water supply. While fossil fuels must be extracted from the Earth, and harmful chemicals are released when fossil fuels are converted into electricity, solar energy just needs to be captured, and there’s no byproduct when it’s converted into usable power.

Going solar is also a great way to boost interest in clean technologies and the economies they support, including nearly 250,000 people that work in the U.S. solar industry. Increased investment in the clean technology industry means continued improvements to materials, equipment, and processes, which will make solar even better for the environment over time.

How To Add Solar Power to Your Home

Now that you understand how solar energy works, you may be thinking about going solar and powering your home with the Sun. Adding solar power to your home can help offset your monthly utility costs, allowing you to save thousands of dollars over the lifetime of your solar energy system. Many homeowners are eligible for tax rebates and incentives, and in some cases, you can even earn credit from your utility company for the extra energy you produce.

Getting started is easy! Just request a Free Solar Savings Estimate to find out how much you can save when you add solar power to your home. If you like what you see, Palmetto can connect you with a solar expert in your area who will review your home in more detail, and put together a detailed proposal with the different options for you to go solar.

Then just pick the option that’s right for the needs of you and your family, and let our expert installers go to work! You’ll be putting the power of the Sun to work for you in no time.

Visit our Facebook pageVisit our Twitter

Clean Energy Learning Center

Palmetto Learning Center is your go-to resource for news, updates, and questions. Knowledge is power. Invest with confidence.


Why Solar?

View now


10 Reasons to Go Solar for First-Time Homebuyers

View now

Energy Efficiency

How to Lower Your Energy Bill this Summer

View now

See How Much You Can Save

Get a custom quote in less than 5-minutes with our solar savings estimator.

Estimate your savings

Track Your Savings with the Palmetto App

Track Your Savings with the Palmetto App

The Palmetto App puts solar savings in the palm of your hand. Track system performance and energy consumption by day, week, or month. Get real-time alerts, review historical data, and tap into Palmetto’s clean energy incentive programs. With an intuitive user dashboard and one-click customer support, it’s easy to track your goals and boost your results.
Get it on Google Play
Learn more