Have you ever wondered how solar panels actually work to provide energy for your home? Here is a breakdown of exactly what happens when you install solar panels or lease new solar panels and start lowering your energy costs.
Step 1: The Sun Provides Energy
First, let’s talk about how electricity is traditionally made in order to answer the question “how do solar panels work?” Generating electricity requires fuel. Many fuels used for power production can create serious environmental harm. The damage comes from both how we extract and use the fuels.
Conventional power plants use coal for fuel, which is dug up from mountains. They use natural gas, which is forced to the earth’s surface and transported via long pipelines, which can explode (Yes, it’s rare. But it has happened). For nuclear power, uranium is unearthed from mines.
Clearly, it’s a labor intensive and sometimes destructive process to obtain and deliver fuels used in electricity production.
The harm continues as the fuel is employed to produce electricity. The fossil fuels—coal and natural gas—undergo a combustion process that produces air pollutants. Nuclear power presents the risk of radioactive leaks.
Solar, on the other hand, uses a very different kind of fuel: sunlight. No mining is involved, no big pipelines, and no moving of the earth—just natural sunlight pouring from the sky. Sunlight is abundant, easy to capture, safe, and clean. The sun is an infinite resource, which is why solar power is often described as renewable energy. This is why some areas will offer local solar installation rebates.

You may have heard solar energy also referred to as photovoltaics or PV, which describes to the way solar panels convert sunlight into electricity. Photons are particles of light. Voltaics refer to voltage or electricity.
There are other kinds of solar energy, too, such as solar thermal and concentrating solar power. But PV is most common for American rooftops. Converting sunlight into electricity requires use of certain materials. It’s a relatively simple chemical process, which we’ll talk about next.
Step 2: The Solar Panel Absorbs Sunlight
The process of making electricity begins when sunlight travels at the speed of light about 93 million miles from the sun and falls on the solar panel.
The panel is likely located on a sunny rooftop or perhaps ground-mounted in a yard or nearby field. It’s probably wired together with other popular solar panel types. Multiple panels together are called a solar array.
What is a solar panel exactly? Also called a module, it’s typically a four-cornered, plate-like structure made up of silicon cells, a form of semiconductor.
The cells contain electrons. Certain substances are applied to the cells (such as phosphorous and boron) to create a magnetic field. Some of the cells have a positive charge and some a negative charge.

When the sunlight shines on the cells, it destabilizes the electrons, freeing the negatively-charged electrons to flow to one side of the silicon cell. The movement produces a flow, or current of electricity. Metal conductors on the cell gather the electricity and transfer it to wires.
Step 3: The Solar Inverter Coverts Sunlight into Electricity
At this stage, the solar energy is not quite ready for home use yet. At first, solar panels create a type of electricity that is not compatible with the U.S. electric system. Called direct current or DC electricity, it is power that flows in one direction.
American homes rely on another form of electricity, called alternating current, or AC electricity. It’s different from DC electricity in that it can flow in more than one direction.
The U.S. electric grid which your home is connected to runs on AC electricity. The U.S. chose this form because AC tends to be efficient for electricity that travels long distances, as is often the case in North America, where the power moves over a huge grid. It includes 450,000 miles of high voltage transmission wire connected to 3,200 electric utilities.
How do we make the DC electricity produced by your solar panels into AC electricity that works in the U.S.?

That’s where installing a solar inverter comes into play. Also sometimes known as a solar converter, this is a a metal box that might be placed in your house somewhere near your fuse box. Despite its bland appearance, the box plays a major role in allowing our use of solar energy. Think of it as the translator between your solar panels and your house.
Not only do its coils, wires, and magnets “invert” the energy from DC to AC so that it becomes usable to the household, but the inverter also helps with certain energy management functions.
Some inverters have the ability to “island” or separate the home from the central grid when a blackout occurs. The inverter also may include a small amount of battery power, so that the house still receives some electricity in case a power outage occurs.
New inverters are sometimes called the “smarts” behind solar energy installation because they undertake energy management and communications functions that make your solar energy more efficient.
It’s important to note that a variation exists on the conventional inverter. This is the micro-inverter. Rather than being housed in a box, micro-inverters are placed directly underneath the solar panels. Once your solar inverter is working properly, the sky is the limit on the different things you can go solar with from heating a pool with solar, solar home heating installation options, and ever hot water heaters running on solar energy.