How Solar Energy Works Step by Step: From Sun to Outlet

Solar energy is a clean, free, and virtually limitless source that is being converted into electricity to power homes, businesses, and technology, promising a more abundant future. Harnessing this renewable energy with solar panels offers benefits like reduced power bills, greater energy independence, and less climate-warming pollution. 

Here’s the step-by-step process through which sunlight is converted into usable electricity by home solar panels.

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 cover every user of electricity on the planet. That’s one powerful energy source!

How does solar energy produce electricity? People have come up with several ways to capture solar energy, the most common being photovoltaic (PV) solar panels that convert the sun's rays into 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 creates 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 rooftop 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 depending on the season.

A solar company should help you understand how shade, your roof, your family’s typical electricity usage, your climate, and your geographical location will impact your solar panels’ performance.

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

Solar panels produce electricity in the form of direct current (DC). However, your home appliances use alternating current (AC) electricity.

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

The type of inverter you use depends on 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 complicated systems use microinverters in which each panel has its own individual inverter. Other inverter options include power optimizers and hybrid inverters.

Credit: National Laboratory of the Rockies

Solar inverters also provide information about your system’s performance. This allows you to 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.

The Palmetto app offers an easy way to stay on top of how much electricity your solar panels are generating and how much electricity you're buying from the grid. Even better, when you take action to save energy, you can earn discounts on energy saving upgrades, like smart thermostats and EV chargers.

Step 3: Electrical panel distributes electricity

Your electrical panel distributes electricity throughout your home, whether that’s your dishwasher, refrigerator, or energy-efficient heat pump. 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.

Electrical panels are also a key component of consumption monitoring. Smart devices that attach to either the main panel or each individual circuit allow you to view more details about your specific energy consumption, which can help you optimize your energy usage over time. A smart electrical panel can act as the brain that optimizes how your home uses electricity and the eyes that keep tabs on electricity use, too.

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. A traditional electric meter has analog dials that spin as current flows through it, which is why the utility company may have someone check your meter in person once a 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 sends closer to real-time usage data to your local utility company. A smart meter provides greater insight into exactly how much electricity a home uses or sends to the grid, and when.

Smart meters and net metering

A smart meter (or another net meter) is required to take advantage of net metering where its available. 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 you send back to the grid that can reduce future electric bills.

Step 5: Batteries store excess energy

Installing solar battery storage can unlock greater long-term benefits of going solar by storing any extra electricity in a solar battery. That way, you have solar electricity available to you when the sun goes down or it’s a rainy day — further reducing the electricity you draw from the grid. During an outage, a backup battery can provide emergency electricity.

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 Laboratory of the Rockies estimates energy storage will multiply by at least five times from 2020 to 2050.

Will solar energy work for your home?

Solar energy at home can deliver real benefits. It 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 you're interested in whether or not solar will work at your home, get a free solar savings estimate today, or download the Palmetto app to see how else you can save energy and money at home.

Frequently asked questions

How do solar panels work?

Semiconductive materials in solar panels convert solar radiation into direct current electricity, which an inverter converts to the AC electricity that’s usable in 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, though not in all cases. Homes with heavily shaded roofs, for example, may not save with solar panels.