Solar power seems simple enough: The Sun shines and solar panels convert that sunlight into electricity. But what exactly is solar energy? How does a solar panel turn sunlight into electricity? And how can you use solar energy to power your home?
If solar energy is interesting to you but baffling, here’s the explanation you need. Read on for a comprehensive guide to solar energy.
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What Solar Energy Is (And What Solar Energy Is Not)
Solar energy is radiation emitted from the Sun. Solar energy is what keeps the Earth at a livable temperature, creates weather that provides rain and snow, gets converted into chemical energy by plants, and much, much more.
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! The amount of solar energy that reaches Earth every hour could provide all the electricity humans use for the entire year.
To be 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 are the basic unit of energy that solar technologies rely on.
Credit: Pexels/Pixabay
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 energy and feed that directly into your home’s electrical system. Instead, they convert sunlight into electricity.
How is Solar Energy Produced?
Like other stars in our solar system, the Sun is a giant nuclear reactor. Within its molten, 27 million-degree Fahrenheit core, nuclear fusion smashes together hydrogen atoms to form helium molecules, creating positrons, neutrinos, and a whole lot of energy in the process.
That energy then radiates to the Sun's outer layers and across our solar system in the form of light and heat. This energy covers the entire electromagnetic spectrum, from high-energy X-rays to ultra-long-wavelength radio waves.
Though electromagnetic radiation comes in many different forms, 99% of the rays from the Sun reach the Earth as visible sunlight, ultraviolet rays, and infrared rays (aka “heat”). While the nuclear fusion process within the Sun takes thousands of years, sunlight only takes 8.5 minutes to travel to the surface of the Earth.
How is Solar Energy Collected?
There are two main ways to collect solar energy from the Sun: photovoltaics (PV) and concentrating solar-thermal power (CSP).
Credit: Brian Church
Photovoltaic solar power
The most widely known solar energy technology is photovoltaic panels which turn light (photo) into electricity (voltaic). Photovoltaic solar panels placed on roofs or out in fields capture energy through sunlight and the photovoltaic process outlined above.
Concentrating solar-thermal power
While photovoltaics work well for small-scale systems, concentrating solar-thermal power is a growing technology for larger solar energy projects. CSP uses mirrors to reflect sunlight onto a receiver, concentrating the sun’s power into a small area. This concentrated sunlight heats a fluid to high temperatures, and that thermal energy spins a turbine 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.
Solar water heaters
Solar energy can also be used to heat water with special solar thermal collectors. There are many types of solar hot water systems, but we’re going to stay focused on generating electricity.
How Does Sunlight Generate Electricity?
To generate electricity from sunlight, the Sun's photons must be collected and converted into a usable form. 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 silicon layer within a solar panel and knocks electrons free. Solar cells, the individual parts that make up a solar panel, have a positive side and a negative side, so once these negatively charged electrons are knocked free, they naturally seek out the positively charged protons to connect.
The attraction of negatively charged electrons and positively charged protons makes solar power possible. This flow of charged particles from one side of the solar cell to the other is known as current, and in this case, direct current (DC) electricity.
The more sunlight that strikes a solar panel, the more electrons that get knocked free, and thus, the more current the panel generates. Solar panels can convert solar energy into electricity most efficiently when sunlight hits them at direct angles. That angle is influenced by the slope of installation as well as the time of day and position of the sun.
How is Solar Electricity Used in a Home?
After solar energy is captured and generates direct current (DC) electricity it still needs to be converted into the alternating current (AC) electricity that powers most appliances, lights, and other electronics in your home. That’s the job of a solar inverter. In addition to converting direct current electricity into alternating, inverters also provide ground fault protection and report system performance metrics like voltage and energy production.
Today, two main types of inverters help convert solar power to electrical energy: string inverters and microinverters.
String inverters, also known as central inverters, are the simplest type of inverter, and many small-scale solar energy systems rely on them. With a string inverter, individual solar panels are wired together into a “string,” and multiple strings can be connected to the central inverter. They’re best suited for installations where panels all get the same amount of sunlight.
When panel-to-panel performance varies, string inverters can be installed with power optimizers to maximize system efficiency. Interconnected with each solar panel, power optimizers “condition” the DC electricity along solar panel strings before the energy reaches the central inverter, creating a constant voltage for efficient power conversion.
Microinverters are installed with each panel. Microinverters convert DC to AC electricity right at the source before it travels into your home. Microinverters help maximize system performance for installations on complicated roofs or those in partially shaded areas. Microinverters usually cost more upfront than string inverter systems but can provide better performance.
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How Does Solar Energy Output Compare to Fossil Fuels?
Solar energy is one part of the cleaner, cheaper energy that’s replacing fossil fuels. What are the differences between the two? What are the similarities? When comparing solar power with fossil fuels, it’s important to take a broad view of the two energy sources.
Credit: US Energy Information Administration
Because sunlight is free and solar costs have fallen dramatically over the last decade, solar electricity can be a cheap energy source for years to come. Fossil fuels fluctuate in price and, depending on where you live, can lead to surprisingly high bills.
Sunlight is a nearly unlimited resource (unless you’re around when the sun burns out). Fossil fuels, on the other hand, will eventually run out and can’t be easily renewed.
Solar panels are also a zero-emission electricity source, making them a key cog in addressing the threat of climate change. Mining, transporting, and burning fossil fuels are responsible for the vast majority of historic and ongoing carbon emissions responsible for global warming.
Besides the larger threats represented by climate change, burning fossil fuels can pose health risks to individuals, whether because they live near a power plant or refinery, or because they have a gas stove that leaks dangerous chemicals into their kitchen. Solar panels don’t burn anything to make electricity, so they’re free of those combustion-related emissions.
Credit: National Renewable Energy Laboratory
How Does Solar Power Cost Compare to Other Energy Production Forms?
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.
Of course, these rates only reflect the cost of the energy itself, without the physical equipment, labor, and processes required to generate and share usable electricity. In 2009, electricity from utility-scale solar was $359 per megawatt-hour (MWh), or $0.359 per kWh. In 2019, just 10 years later, the price declined by 89% and utility-scale solar was $40 per MWh. Today, utility-scale solar is the lowest-cost source of new electricity in the significant majority of countries worldwide.
The price of solar energy largely 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.
Cost of solar energy for homeowners
For individual homeowners, the cost of solar depends on many different factors, including system size, home location, financing options, equipment costs, available incentives, rebates, and more. Nationally, the cost of installing home solar panels averages around $3.25/watt. That is just an average, and the cost of solar panels in your area may be different.
Credit: Solar Energy Industries Association
On the surface, comparing the cost of solar power with other energy forms can be difficult. Solar has high upfront costs but little to no ongoing expenses, whereas fossil fuels have more ongoing costs.
According to the US Energy Information Administration (EIA), the average price of residential grid-supplied electricity was 16.88 cents/kWh in April 2024. The EIA also reports that the average American home consumes about 900 kilowatt hours (kWh) per month. This means that, on average, US homes spend over $1,800 per year (or about $150 every month) on electricity bills, which solar panels can help reduce. There’s no similar at-home solution for a high gas bill.
How Does Solar Power Work With My Utility Company?
You can’t understand how solar energy works for a homeowner today without talking about the relationship between residential solar panels and the larger grid operated by utility companies.
Even after going solar, most households will stay connected to the grid. This allows you to power your home with solar energy when the Sun is shining, share excess production, and pull electricity from your utility whenever needed. To accomplish this, solar panels interconnect with the grid using a bi-directional meter that measures the amount of energy moving to and from your home.
Your solar energy export values depend primarily on geography and are governed by state laws, your state’s utility commission, and your utility. Most importantly, solar energy shared with the grid will almost always arrive on your utility bill as a credit and not as a check or cash.
How Solar Energy Net Metering Works
If you live in an area with net metering or net billing, the energy your solar power system exports to the grid can be credited towards your electricity bill. Then, at the end of the billing cycle (usually monthly), your utility bill will be calculated based on the total energy you use relative to the total energy you produce, also called your net consumption.
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-demand or off-peak hours. In this case, a solar battery may be an easy way to save money on your monthly utility costs by tapping into stored energy when rates go up, and only relying on grid power 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
Adding solar power to your home can help offset monthly utility costs, allowing you to save thousands of dollars over the lifetime of your energy system. You may be eligible for government incentives for solar that can reduce the overall cost.
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 your needs and let our expert installers get to work. You’ll be putting the power of the Sun to work in no time.
Frequently Asked Questions
What is the easiest definition of solar energy?
Solar energy is energy that comes from the sun. With today’s technology, you can harness solar energy to passively warm your home, heat water, and generate electricity to power just about any device or appliance.
What are the pros and cons of solar energy?
Within the wide variety of solar energy applications, the primary pros include a sustainable source of power that does not emit harmful pollutants while generating electricity and can reduce your energy costs at home. Solar power does not generate electricity at night and might have reduced generation during the winter or long periods of cloudy weather. You can get around that drawback with a solar battery or by connecting to the grid.
Is solar energy light or heat?
It’s both! Solar energy can be harnessed as sunlight or heat to produce electricity. While the large majority of solar panels on homes and buildings use photovoltaic technology to harness sunlight, concentrating solar power systems can also capture the Sun’s thermal energy to produce electricity.
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Disclaimer: This content is for educational purposes only. Palmetto does not provide tax, legal, or accounting advice. Please consult your own tax, legal, and accounting advisors.
Cory O'BrienSenior Director - Growth MarketingCory 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!
