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How Does Solar Energy Work? Step-by-Step Guide

Illustration of a home powered by solar, showing how solar energy works, step by step.
UpdatedDecember 15, 2024
AuthorHeadshot of Andrew Blok.Andrew BlokWriter and EditorEditorRyan Barnett HeadshotRyan BarnettSVP, Policy & New Market Development
In this article
01.
What Is Solar Energy?
02.
Step 1: Solar Panels Capture Solar Energy
03.
Step 2: Solar Inverters Convert DC to AC
04.
Step 3: Electrical Panel Distributes Electricity
05.
Step 4: Electric Meter Records Consumption and Production
06.
Step 5: Batteries Store Excess Energy
07.
Will Solar Energy Work for Your Home?
08.
Frequently Asked Questions

How does a solar panel take sunlight and turn it into electricity? It's a fair question that's key to the fastest growing source of electricity in the United States.

If you've already got solar panels on your home or are wondering if they might be a good fit, here's what you need to know about how sunlight can charge your phone, power your heat pump, or brew your morning coffee.

See how much you can save by going solar with Palmetto

Step 01
Step 02
My electric bill is $290/mo

What Is Solar Energy?

Solar energy is the solar radiation emitted from the Sun. Earth receives enough of that renewable energy on a daily basis to provide electricity to every user of electricity on the planet. That’s one powerful energy source!

Humans have devised several ways to capture solar energy, the most common being the use of photovoltaic (PV) solar panels that convert the sun's rays into usable electricity. Solar panels aren’t making or creating the energy, they are just converting it from sunlight to electricity.

With that information in mind, here's how solar energy works step by step.

Step 1: Solar Panels Capture Solar Energy

Solar panels convert solar energy from sunlight into electrical energy. The most common solar panels are made from one of three semiconductors: monocrystalline silicon, polycrystalline silicon, or thin-film solar cells.

When sunlight hits the thin layer of semiconductive material, it triggers the release of electrons from silicon atoms. The negatively charged electrons are attracted to the positively charged side of the cell. This photovoltaic effect results in free-flowing electrons within the solar panel. The moving electrons create an electric current which is harnessed by the wiring connected to the solar panels to produce electricity.

Solar power systems are carbon-free in their energy production. The lifetime emissions of solar panels, which includes emissions from the manufacturing of panels, is about 12 times less than lifetime emissions from a natural gas plant and about 20 times less than from a coal plant.

The more sunlight that reaches the solar panels, the more energy they generate, which means they generate more or less electricity at different times of day and year.

A solar installation company should walk you through and help you understand factors ranging from specifics about your property, such as shading and your family’s typical power usage, to your climate and geographical location.

Solar panels can be tilted to capture the most sunlight at the optimal angle for the best efficiency. Usually, that angle matches your latitude. In the lower 48, that spans from 24.5 degrees in Key West, Florida to 49.2 degrees in Angle Inlet, Minnesota.

Step 2: Solar Inverters Convert DC to AC

Next up in our quest to answer “How does solar energy work?” is a lesson about inverters. Solar panels produce electricity in the form of direct current (DC), which means the electricity flows in only one direction. However, your home appliances use alternating current (AC) electricity, which means the electricity flows in both directions.

This means the solar electricity from your panels needs to be converted from DC to AC to make it usable in your home. To convert DC power to AC power, you need an inverter.

It’s a simple job, but an essential one if you want to take advantage of solar energy. Without the inverter, your system would create electricity, but it wouldn’t be able to power anything.

The type of inverter you use depends upon the size and configuration of your home solar energy system. A simpler system typically uses a string inverter, a single box in a central location near your circuit breaker. More intricate systems use microinverters in which each panel has its own individual inverter. Other inverter options include power optimizers and hybrid inverters, depending upon your home’s energy needs.

A diagram showing AC- and DC-coupled systems.

Credit: National Renewable Energy Laboratory

Solar inverters also allow you to connect your solar panel system to the internet so you can access information about your system’s performance. This helps you compare your solar energy production and your household energy consumption so you can check if the system is functioning properly and meeting your electrical load as required.

Step 3: Electrical Panel Distributes Electricity

Your electrical panel distributes electricity throughout your home. The circuit breakers in the electrical panel can also cut the current to an electrical circuit in case a fault or surge occurs, to prevent an overload in electrical lines that can cause damage.

While your solar panels generate electricity, they typically aren’t connected directly to your appliances or other electronic devices. In terms of understanding how solar panels work, they provide electricity to the electrical panel, and your electrical panel separates the power into individual circuits that run to everything in the house.

Lastly, electrical panels are also a key component of consumption monitoring. There are devices that can be attached to either the main panel or each individual circuit, allowing you to view more details about your specific energy consumption, which can help you optimize your energy usage over time.

See how much you can save by going solar with Palmetto

Step 01
Step 02
My electric bill is $290/mo

Step 4: Electric Meter Records Consumption and Production

Your electric meter (sometimes called the “utility meter”) is the device your utility company uses to measure your electricity consumption. It’s how they know what to bill you each month. A traditional electric meter has analog dials that spin as current flows through it, which is why the utility company has someone check your meter in person once a month. Even then, that meter reading is just a summary of your electricity consumption for the month.

When you go solar, you consume electricity from your solar panels, which lowers the amount of electricity you consume from the grid. As a result, your electric meter records a lot less consumption, and you save money by not paying for electricity from the utility company.

Most homes with solar have a smart meter installed, which records the exact consumption of electricity for your house. Smart meters send real-time usage data to your local utility company for billing, customer service, and research purposes. A smart meter eliminates the need for estimated bills by measuring exactly how much electricity is being used.

Smart meters and net metering

If your home has a smart meter, it allows you to take advantage of net metering if it’s available in your area. If your solar panel system is connected to the electricity grid (most are) then net metering allows you to get credits from your local utility company for any surplus electricity generation.

Your smart electric meter will record energy production in addition to consumption, and when you generate more energy than you need for your home, you can export that power to the grid and earn credits to reduce future electric bills.

How net energy metering works

Step 5: Batteries Store Excess Energy

Installing solar battery storage can unlock greater long-term benefits of going solar. If your solar panels generate more solar energy than you can use, you can store that extra electricity in a solar battery. That way, you have electricity available to you when the sun goes down or it’s a rainy day — instead of drawing from the electricity grid.

Depending on the type, solar batteries can either store excess DC electricity that’s produced by your solar panels, or they can be charged by AC electricity that’s already been converted by your inverter.

Many states and power companies now have incentives for residential customers who send excess power from their solar batteries to the overall electric grid. These programs, called virtual power plants, help spread out when renewable energy can be used on the grid. At times of surplus solar, wind, or other renewable energy production, the excess is stored. When it’s later added to the grid, those sharing their battery’s power with the grid are compensated. 

Solar battery storage is growing and is expected to continue growing exponentially. The National Renewable Energy Laboratory found energy storage will multiply by at least five times from 2020 to 2050.

A bar chart showing the growth of various types of energy storage through 2050.

Source: National Renewable Energy Laboratory

Will Solar Energy Work for Your Home?

Solar energy at home can deliver real benefits. You can lower your utility bills, reduce your carbon footprint, increase your independence from the electricity grid, help create a clean energy future, and more.

Solar energy is also the fastest growing and (by some counts) cheapest source of energy today. If your interested in finding out if solar will work at your home, estimate your solar savings or contact Palmetto today.

See what solar can do for you:

My electric bill is $290/mo

Frequently Asked Questions

How do solar panels work?

Solar panels convert solar radiation into electricity, then an inverter turns it into the AC electricity that’s usable in your home. Sunlight hits semiconductive material on a panel and creates a flow of electrons. This electric current moves through wiring on the panel to your home.

Are solar panels good for the environment?

Yes, solar energy is a completely renewable source of power. Solar systems produce no emissions via their energy production, and they for decades with very good efficiency. 

Can solar panels save money?

Yes, solar panels can save money. In many — but not all — cases, solar panels can save you as much as they cost in just 10 years.

About the AuthorHeadshot of Andrew Blok.Andrew BlokWriter and Editor

Andrew has worked as a journalist and writer for four years, over half of those dedicated to covering solar. He currently lives in Tucson, AZ, where you might run into him walking his dog and birding while dodging the heat. He has degrees in English education and journalism.

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