How Solar Energy Works

It’s important to know how your system works and what you can expect when going solar.

  • Solar panels convert sunlight to DC current
  • Inverter converts electricity DC to AC
  • Electrical distribution panel feeds all household circuits
  • Meter: Solar power can generate more electricity than the household uses, causing the meter to spin backwards while feeding electricity back to the grid. Your electricity bill is then credited.

By Isaiah Shelton

1. Solar Panels

Typically installed on the roof of the home, these panels convert sunlight into electricity using what’s known as the photovoltaic effect. Solar panels will produce a given electrical power output—anywhere from 100 to 300 watts per panel under ideal conditions. The amount of power a panel produces will depend on its efficiency, which currently is about 21% to 25%. Panels should be securely mounted to ensure they get maximum sunshine throughout the year. Most will carry a warranty that guarantees 90% of rated power for at least 10 years, falling off to 80% for 25 years. Solar panels are usually 5 feet long and 2-1/2 feet wide. They’re often grouped in three sets of four modules (12 total) for smaller homes, so you’ll likely need at least 120 square feet of roof space. The PVWatts Solar Calculator by the National Renewable Energy Laboratory provides a fairly accurate estimate of how much energy your solar panels will produce.

2. Inverter

This device converts the direct current (DC) electricity from your solar panels into the AC power you’ll need to run your TV, computer, and other appliances. Most solar installations will use a Grid Tie inverter, which works with your electric grid and net-metering. This allows any excess electricity you don’t use during the day to be sold to your utility company. Most residential solar panel systems will mount the inverter in the garage. A newer type of solar inverter—known as a microinverter—works directly and independently under each solar panel. Microinverters allow you to add additional solar panels after they’ve been installed—something you can’t do with normal inverters. This is important if you buy an electric vehicle and you suddenly realize you need extra solar panels to recharge your car.

3. Electrical Distribution Panel

This is the main distribution point for the many electrical circuits in your home. When adding solar power, make sure you don’t overload your service panel. A panel's total amperage is printed near or on the main circuit breaker, which controls all the circuits in the panel. Follow the 120% rule for sizing the circuit breaker to ensure the electrical panel has the capacity to safely handle your proposed solar system. Generally, a 200-amp panel can handle a 40 amp solar circuit breaker, 150A panel can serve a 30A solar breaker, and 100A will accommodate a 20A solar breaker. A 100-amp service is typically used to accommodate the needs of a home under 3,000 square feet—without the high load demands of central air-conditioning or electric heat. Homes larger than 2,000 square feet with central air-conditioning or electric heat often need 200-amp service. Consult your solar panel installer to determine the size and additional circuit breakers you’ll need for your solar system.

4. Meter

This device keeps track of how much electricity you use. If your solar system is connected to your power company grid through a single electric meter, your meter can actually run in reverse as you return excess energy to the utility. This typically occurs on sunny days when no one is home, your AC is off and you use very little electricity. The excess electricity generated by your solar panels will be credited to you at the same retail rate as the electricity you draw from your utility. In some cases, your utility may require you to use two meters: one that meters your consumption of energy from the grid and another that meters the electricity you return to the grid. In this case, your solar-generated excess energy could be credited at the retail rate or possibly at a lower wholesale rate, depending on the utility.

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