What is Solar Energy and How Do Solar Panels Work in Your Home?

Published on 24 Jul, 2018 by Andrew Sendy

5 minutes read

Categories: Solar 101, Solar efficiency, Solar panels, Solar power

Solar panels

As recently as a decade ago, the use of solar energy arrays in residential settings was a relatively rare event. Solar energy equipment and installation costs were expensive investments for most average American homeowners. Today, increasing technological developments, highly efficient equipment, and lower up-front costs have turned the industry around. Additionally, a growing awareness of the benefits solar energy provides to the environment has spurred a renewed interest in both the state and federal government and an expanding base of homeowners.

As solar power increasingly becomes a more affordable, realistic energy option, homeowners invariably want more information about how solar panels work, how they’ll cut utility costs, what exactly solar energy is, and how it’s harvested. Breaking down the ‘mysteries’ of solar energy and how it powers your home will answer those questions and more.

What is Solar Energy?

Simply put, solar energy is naturally created by the radiation emitted by the sun. When sunlight is absorbed by specialized solar panels, that energy can be transformed into electricity that can be used to power all or part of your home. Unlike fossil fuels, solar energy produces no emissions whatsoever. In fact, one megawatt hour of solar electricity replaces up to 1 tonne of the carbon dioxide emitted by other power sources.

How do solar panels work?

Solar panels containing photovoltaic (PV) cells absorb the photons that sunlight generates. The panels convert the photons into electrons, which creates direct current (DC). Inverter technology connected to the solar panels then converts the DC current into the familiar alternating current (AC) used to power household heat and electrical appliances.

How do solar panels work in a home?

While the technology involved in creating solar panels may seem somewhat confusing, the actual process of converting solar energy into useful electricity is simple. The AC electricity your inverter creates flows into an electrical panel in your garage or home just as it does from your local power provider. From there, it powers your lights and appliances.

Solar power diagram

Image source: SolarReviews

How do the solar panels in my home connect to the grid?

Your solar system connects to the electrical grid via a ‘net’ meter on the side of your home that monitors your system’s electrical production and sends the information to your electrical provider. The meter will also alert the electric company if it detects problems or irregularities in your system. If your solar array produces more electrical power than you need, that power can be transferred to your local utility grid and earns you solar credits with the utility company.

Signing a contract with your local electrical provider to tie your solar system to the grid can be beneficial in several ways, including possibly generating additional income via earning SRECs, or Solar Energy Renewable Credits, selling your extra electricity to the utility provider, and getting discounts on electrical usage rates when you must rely on the grid for power.

How can solar energy power my home?

Powering your entire home via solar power depends on several factors, including upfront and operating costs, where your home is located, the number of solar panels you can realistically install, and your daily electrical power needs. There are many points to consider before deciding to power your entire property via solar energy. On the other hand, using solar energy to offset a portion of your annual electrical costs via a utility provider can drastically reduce utility bills. Installing the right number of solar panels for your home should be based on your electrical needs and whether you intend to generate enough excess electricity to profit from it.

If you do plan to go off-grid, it’s important to note that these solar systems include different features. Because off-grid systems are not connected or wired to the local utility system, they rely on multiple batteries to store the electricity for use when the system doesn’t generate enough power for normal use. Having such a storage system is more expensive to install, but you’ll never be caught in the dark during a power outage or for grid-involved safety reasons.

What does a solar panel installation for my home involve?

There are several steps to take before jumping into solar energy installation for your home. Discussing the following points with a solar professional will help you make the most informed, beneficial decision.

  • Does the sunlight you get justify installing a solar system?
  • Which type of solar installation makes the most sense for your electrical needs?
  • Can and how will you connect to the local electrical grid?
  • How many solar panels will you need for your system?
  • Do you prefer to lease or buy your solar equipment?

How much will I save on energy costs by using solar energy?

Despite major drops in installation and equipment costs, investing in a solar power system is often a major financial decision designed to save you utility expenses for years. And what type of return might you realize on your investment if you sell your home? Calculating the amount of solar savings available to you can be somewhat difficult due to the number of factors involved in every installation. No two are the same, but contacting your local utility company can provide some useful insight.

What are the pros and cons of solar energy?

When great potential returns on your investment are combined with being able to take advantage of an abundant, environmentally friendly power source that requires little maintenance, most homeowners would ask “Where do I sign?” For a long time, solar energy has arguably been the cleanest, yet most expensive energy alternatives available, but costs and efficiency have both improved. Make sure to weigh the pros and cons of choosing solar energy before making any financial and legal commitments.

With solar power and panel technology becoming more advanced and affordable, the benefits to you as a homeowner and to the planet are undeniable. With more favorable financing options and a real increase in your home’s value, installing solar panels is becoming a beneficial reality for millions of American homeowners.


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Author: Andrew Sendy

As chairman of Solar Investments Inc and chairman of the largest solar panel installation company in South Australia, Andy is passionate about solar power. With his unique working background he writes on the residential solar industry in America from a unique perspective.