1. Home
  2. Solar

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

Illustration of a home powered by solar, showing how solar energy works, step by step.
PublishedJuly 12, 2021
UpdatedMay 17, 2024
AuthorCory O'Brien HeadshotCory O'BrienSenior Director - Growth MarketingEditorRyan Barnett HeadshotRyan BarnettSVP, Policy & New Market Development
In this article
What is Solar Energy?
Key Takeaways

While most people recognize that solar panels transform sunlight into usable electricity, not everyone understands the science behind it. Thus, if you've ever wondered, “How does solar energy work, step by step?”, we’ve created this guide that explains the process in great detail.

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, and the Earth receives enough of that renewable energy on a daily basis to provide electricity to not just every home in the United States, but every home on the planet. That’s one powerful renewable 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.

As a leader in the clean energy transition, Palmetto believes that solar energy can and should play a big part in that movement away from fossil fuels and traditional power plants. We want to help people learn more about how this crucial energy technology helps us harness the Sun’s rays, so if you’re interested in learning more about solar energy, check out What Is Solar Energy?

With that information in mind, here’s the answer to, “How does solar energy work step by step?”:

Step 1: Solar Panels Capture Solar Energy

Let’s start by addressing the question, “How is solar energy produced?”. Solar panels convert solar energy from sunlight into electrical energy for your home. 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 then attracted to the positively charged side of the cell. This “photovoltaic effect” forms as a result of the free-flowing electrons within the solar panel. The moving electrons create an electric current which is then harnessed by the wiring connected to the solar panels to produce electricity.

The more sunlight that reaches the solar panels, the more energy they generate. During peak sun hours, the panels in your solar array receive the maximum concentration of sunlight, which means they can convert sunlight to generate the maximum amount of electricity during this period.

To learn more about solar panels, read our guide, How Do Solar Panels Work?

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 only flows in one direction. However, your home appliances use alternating current (AC) electricity, which means the electricity flows in both directions.

This means that 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.

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.

To learn more about this essential part of the solar energy generation process, read our Solar Inverter Guide.

Step 3: Electrical Panel Distributes Electricity

Your electrical panel distributes electricity throughout your home. The circuit breakers in the electrical panel can also cut off the flow of current to an electrical circuit in case a fault or surge occurs, to prevent 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 do solar panels work, they provide electricity to the electrical panel, and your electrical panel separates that home solar 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 that 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 that can help reduce future electric bills.

To learn more about electric meters, read our guide, How Electric Meters Work and What Electric Meters Do. If you want to learn more about net metering, review our Guide to Net Metering for Home Solar.

Step 5: Batteries Store Excess Energy

Installing solar battery storage is essential to maximizing the 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.

To learn more about energy storage system options, read our Solar Battery Guide.

How photovoltaic solar panels work

Key Takeaways

When it comes to answering the question, “How does solar work?” we believe the benefits of solar energy for your home are undeniable. 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.

To take advantage of those perks, it’s helpful to understand solar energy. From the sun hitting your solar panels to extra generation getting stored in your batteries, going solar at home is easier than you think - especially when you have a trusted partner like Palmetto at your side.

If you would like to make the shift to solar energy today, Palmetto has a strong track record of helping homeowners navigate the process with ease. We work hard to complete every step effectively and efficiently with your convenience at top of mind. With our Palmetto App and Palmetto Protect maintenance services, we’ll be there to help you with your solar power for years to come.

Ready to get started? Now that you know the answer to, “How does solar energy work step by step?”, the next step is to estimate your solar savings with Palmetto.

See what solar can do for you:

My electric bill is $290/mo
About the AuthorCory O'Brien HeadshotCory O'BrienSenior Director - Growth Marketing

Cory brings over 8 years of solar expertise to Palmetto, and enjoys sharing that knowledge with others looking to improve their carbon footprint. A dog lover residing in Asheville, NC with his wife, Cory graduated from UCSB. If you run into him, ask him about the company he founded to rate and review beer!

Subscribe to our newsletter

Get the latest insights on solar, clean energy, climate change, and sustainable living—delivered right to your inbox every month.

Read More From The Clean Energy Learning Center

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

"How Solar Incentives Maximize Your Savings" on a green background with stacks of coins getting larger left to right.

Maximizing Your Solar Investment with Energy Policy Incentives

Solar panels can reduce your energy costs. Solar incentives can help you save even more.
A image of solar panels and a sunrise with the words Future Trends in Residential Solar above it.

The Future of Residential Solar Energy: Trends and Innovations

Solar technology keeps getting better and solar policy has improved a lot in recent years. Here's where it's headed in the future.
"Leasing vs buying solar panels" on a blue background.

Solar Panels: To Lease or Buy? Making the Right Choice for Your Home

Whether you should lease or buy solar panels depends on your specific situation. Here's what you need to know.

See how much

you can benefit

going solar with Palmetto

What's your monthly electric bill amount?