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How Do Solar Panels Work: From the Cells to the Complete System

Solar Panels

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Updated May 5, 2024

Most of us know about the possibility of installing solar power in our homes and that it’s better for the Earth as a whole. Solar power, along with hydro and wind, are renewable energies. What this term refers to, explains Rex Liu, Vice President of Product Management and Clean Energy at Generac Power Systems (a company that produces battery storage that accompanies solar energy), is any means of generating energy fueled by a naturally replenished resource.

“That's in contrast to the more traditional ways that we fuel power generation with fossil fuels, where we burn things that are not replaced during the lifetime of a human,” he explains. In order to harness this energy from our sun, you need to install a solar system that consists of, among other components, solar panels.

“But the panels are only one component from one company,” says James (JD) Dillon, Chief Marketing Officer at Tigo Energy, a company that manufactures solar inverters, solar monitoring technology, and provides training and services software globally for solar installers. “For a typical solar system to reach the stage at which it is switched on, dozens of companies have supplied products and services throughout the process.”

The quality, performance, and functionality of a solar system depends on the commitment each of those companies have made to quality, he tells me. “This goes for every step of the installation process, from engineering, procurement and construction to equipment manufacturers, distributors, and installation teams.”

If you’re interested in outfitting your home with a solar system (and you probably should be), the first step is to do your research and learn what you can about how they work. This will help you make a more informed decision and know what questions to ask when selecting an installer. I talked to Liu and Dillon, as well as Steven Grant, Chief Operations Operator at Tampa based Guardian Solar to learn all about how solar panels work.

Basics of solar panels

Solar systems, says Dillon, “include a variety of equipment: inverter, battery, something called an optimizer, and most importantly, the software [or monitoring system] that wraps around it.”

Solar cell

The part of a solar panel that produces power is called a solar cell. “Made from semiconductor materials, these cells are very similar to the ones used in the chips found in phones and computers,” says Liu. Silicon based, these cells are made from quartz sand or gravel (SiO2) blended with carbon and heated in an intensely hot furnace.

“Glass serves as the front contact sheet [of the cell] while the back contact is made of different industrial materials,” explains Liu. A metal frame encloses all of this, including the copper wires and everything that actually transmits the power when generated. (More on that process in the photovoltaic section below.)


“Solar panels produce power in direct current or DC energy while your home typically uses alternating current or AC energy,” says Liu. That’s where inverters come in. “While in theory, you can use direct power from a solar cell without an inverter, most any home or business needs something that converts DC to AC,” explains Dillon.

Street lamps that consist of one light and one solar panel probably don’t contain an inverter. The light simply runs on the direct current power. “‘Converter’ would actually be a better term than ‘inverter’,” says Dillon.

Inverters come in two general flavors: a microinverter installed directly on each individual panel or string inverters positioned on the side of the house or building. In the string inverter set up, all of your solar panels send current to a central spot where it is changed to AC before it travels into your home.

Battery storage

In a system with just solar panels and an inverter (or microinverters), there's no way to store the solar energy that's generated. “You use it right away,” says Liu, “or you send it back to the grid and get credited for it.” The amount of credit you earn depends on where you live and the power company you use.

Recently, people started integrating battery storage into their systems. “This,” says Liu, “is a really effective way to store energy that's generated during the day when most people aren't home.”

With a battery storage system, you bank energy so you can use it at night. Many utility companies charge more for power used during what they call "peak energy times” which tend to be in the evening when the highest number of people are at home. With a battery storage system, you’ll be able to draw power from that instead of paying premium rates for grid power. Generac makes a power cell system that does this.

“Solar panels have really evolved a lot over the last 20 years,” says Liu. He’s been in the industry for 17 years and says that today, there are so many options and the business has become so commoditized (meaning that many panels contain similar designs and features, consequently competing almost entirely on price) that Generac focuses on the higher tech parts of things, specifically the inverter, the power optimization within, and the battery itself.

Overview of photovoltaic cells and their function

Manufacturers build a photovoltaic cell with two layers of silicon, a layer of metal conductor strips with an antireflective coating and metal backing. The top silicon layer is ‘doped’ with phosphorus which contains more electrons (particles with a negative charge) than the silicon does, while the bottom silicon layer is doped with trace amounts of boron which contains fewer.

The difference in the number of electrons that each of these layers possess creates a mini electrical field in between the silicon layers. The electrons naturally move from the phosphor layer to the boron, causing a negative charge in the bottom layer and a positive one in the top at the junction point.

When photons from sunlight hit the cell, they cause disruption (and a little bit of chaotic excitement) in the electrons housed in the silicon layers. They dart and zip around until they land at the electric field at the junction. Not all of the electrons will make their way to this electrical field though, and only the ones that do actually generate usable electricity as they are catapulted through the top silicon layer to the metal conductor strips at the top of the cell. From these conductor strips, the electrons (now electricity) travel through a wire to the inverter.

For a more detailed explanation, including formulas and illustrations, this lecture by Jifeng Liu, PhD, a materials science and engineering expert, offers tons of information for anyone who loves geeking out on the science of things.

While silicon is the most common material used in solar cells, they can also be created using thin film layers made from cadmium telluride and copper indium gallium diselenide or carbon rich organic compounds.

Related: Best Solar Panels For Home, According to Energy Experts

Conversion of sunlight into electricity

“At their core,” says Dillon, “solar panels convert photons from the sun into electrons, which an inverter then converts into usable electricity.”

As explained by the Office of Energy Efficiency and Renewable Energy, solar radiation, also known as electromagnetic radiation, is what the sun emits in the form of light. Solar cells or photovoltaic cells (both of these terms refer to the same thing) absorb this incoming sunlight to generate an electrical current, known as the ‘photovoltaic effect.’ As described in the above section, as the sun’s photons hit a solar cell, they cause the electrons within to spring into action (a directionless action, but action nonetheless) which results in some of them entering the electrical field within the solar cell and consequently being booted out and upward, generating electricity as they go.

The American Chemical Society outlines the semiconductor material in solar panels in the following way: each cell contains two silicon layers (also described in the above photovoltaic section) that act as semiconductors, of which there are two types. Other terms used for these layers are ‘p-type’ and ‘n-type.’ The p-type is the one infused with boron and the n-type contains the phosphorus. The n-type with its excess of electrons and the p-type with extra positively charged holes creates an internal electrical field.

Generation of electrical current

When particles of light, or photons, hit a solar panel, the silicon photovoltaic cells (or semiconductors) prompt the movement (and escape) of electrons. If this occurs within that little internal electric field, electrons move to the n-type layer while holes migrate to the p-type layer. By connecting the layers with metallic wire, the electrons will travel through that wire, then through the external wire on the back of the n-type layer which creates the flow of electricity.

Functioning of solar inverters

Liu tells me that inverters, in general, are getting more efficient and microinverters are becoming more and more common. Microinverters connect directly to the solar panel, so when it produces that DC electricity, it's almost immediately converted to AC. He goes on to say, “that's what is sent down the side of your house to your main service panel.”

This is opposed to traditional systems that have one big box on the side of your house that all the DC power from all the panels installed travel to where they are converted to AC. Direct current energy flows at a constant voltage in only one direction while alternating current energy travels in two directions as the voltage switches from positive to negative. To convert DC to AC, inverters essentially switch the direction of the DC current very quickly back and forth.

As mentioned before, solar systems contain one of two different kinds of inverter; either a central string inverter that connects a series of panels together and manages the current from all of them or a microinverter installed directly on each panel. String inverters tend to be less expensive, but they can be less power efficient because if any single panel on the string experiences issues, the whole string is affected.

Microinverters cost more overall, but if one gets damaged or receives more shade than others, it only impacts the power that flows from that specific panel.

Grid connection and net metering

Connecting solar panels to the electrical grid is no different than connecting your house without solar as the solar energy travels through your meter, says Dillon. “It’s the same principle as having a heat pump in your pool connected to the grid.”

Overview of net metering

Net metering is a billing mechanism that allows you to bank power generated from your solar system to use at a later time in the form of a credit on your account. This credit is measured in a net kilowatt-hour (kWh) format. Policies vary depending on where you live, with differences in how much credits are worth, as well as how long they can be retained—similar to how reward points on credit cards work. In a nutshell, “net metering is what you get credited for when you send it back to the grid,” says Liu, “though, again different areas offer different net metering rates.”

Most net metering policies include monthly rollovers of kWh credits, a monthly monitoring fee, a regular electric bill paid monthly, and an annual balancing and settling of leftover credit. The only equipment required is a single, bi-directional meter that can measure electrical flow in both directions. In most instances, an upgraded meter (if you need one) will be installed when you put in your solar system.

“Different rules now are making sending energy back to the grid less valuable for you during normal times of production,” says Liu. This means your battery and how it works becomes critical.

“You want to store energy and you do want to send it back to the grid, but only at specific times, when it’ll be worth more,” he explains. One such different rule is NEM 3.0 in California. “They recently started paying a lot less for electricity sent to the grid,” explains Dillon. For instance, when he installed solar his payback period was 7.2 years. “If I were to install it right now, my payback period would be double that,” he says. NEM 3.0 had made solar less economical in California, which happens to be the number one solar state in the country. Assemblymember Damon Connolly introduced a bill (AB2629) in February, 2024 to repeal NEM 3.0.

Storage of excess energy

When I talked to Liu, I asked him if it were possible to keep installing battery backups for your solar system so you’d potentially have the ability to store infinite energy, as long as you had the money to purchase said battery backups. He told me that infinite was a dangerous term, but theoretically, if your battery storage is a modular system like the one Generac makes, you could string as many together as you wanted.

The power cell system that Generac sells contains a solar optimization portion. A power optimizer helps you to get the most out of your solar panels whether the energy is used by the home or stored in the battery. “In our battery system,” he explains, “There are different levels of power, or capacity: 9, 12, 15, or 18 kilowatt hours in a single battery unit and you can keep adding additional batteries that extend your storage capacity.”

Power optimizers and software allow you to set up rules and directions about how much and when you use the power generated by your panels, whether you store it in a battery or send it to the grid, as well as when you utilize your stored power.

Benefits of storing excess solar energy for later use

Dillon offered this real-life example of his home. “Right now, the sun's out and my wife's at home with our dog and two cats. And chances are it's all off of our panels; a hundred percent sun, but I can configure it so that it's not. If she's not using everything that's coming off of the sun right now (which is probable), we can store some in the battery for later when the kids get home.”

Many utility companies charge more for electricity used in evening hours, so using your stored power then is more economical. Dillon also owns a Tesla that he times to charge in the middle of the night when power rates are cheapest.

I also asked about the possibility of going completely off grid with solar power. “You need to know that going in,” says Dillon. ”The installer has to do certain work to make you completely grid independent.” To go completely off the grid, most states require a permit; mainly because of emergency situations.

Monitoring and maintenance of solar panels

“Clean solar panels are an important part of maintaining the efficiency and performance of your system,” says Dillon, “We recommend cleaning the panels once or twice a year, ideally aligning it with other maintenance tasks like gutter cleaning or tree trimming.”

Monitoring systems

“A system using solar optimizers and monitoring software provides homeowners with valuable insights into their panels' performance,” says Dillon, “including identifying which modules may require cleaning and monitoring the results of each cleaning session.”

A software monitoring system also allows you to see, in real time or near real time, what's going on throughout the system in terms of consumption and production. For instance, you can see how much energy you produced from your solar and the amount you consumed each day, often displayed in graph form. For example, 30% of your electricity came from the sun, 20% came from the battery storage from the day before and 50% from the grid.

A monitoring system tracks your consumption and production patterns. “With our software and with a couple of the other guys out there,” says Dillon, “you can see all the way down to the panel. Many people have a panel right next to a chimney that by definition will get shade.” The software Dillon’s company uses can show you time-lapse photography which lets you track shade as the sun moves overhead.

Regular monitoring is important for optimal performance. “As an installer, you use the software to get everything running at the beginning and to diagnose problems,” Dillon says. “Our installers come in in the morning and, just like the Starship Enterprise, they've got multiple screens, one for each of the homes they service.” Each one goes all the way down to the module or panel. This allows them to see, for example, the module two over and three down on one house that has a problem, while on another house it's three up and four over. This optimizes repair and maintenance since you know exactly which panel has the issue.

Dillon tells me Tigo Energy has a system out on a reservoir on the Golan Heights in Israel where the panels are positioned on floating rafts with one centralized string inverter. “I believe there's 11,000 panels out on the water. Needless to say, you don't want to send a couple people out in a boat and just wander around. You want to be able to go exactly to the spot on a large system like that.”

Maintenance tips

Chris Christal, director of sales at Atma Energy, a solar energy company in Texas, says you shouldn’t have to do too much to keep your solar panels clean.

Often rain will keep them clean. However, he says, “it’s a good idea to clean them every year, removing dust, pollen, bird droppings, or debris from nearby trees.” If your panels are installed on a steep roof, you may want to enlist a professional.

Plain water is usually all you need for cleaning, but you can use a mild dish soap or a vinegar solution. Make sure to avoid any harsh or abrasive chemicals that can damage the panels.

And, warns Christal, “avoid spraying cold water on hot panels, as the sudden temperature change could cause cracks.” Consider cleaning in the cooler mornings or evenings.

When visually inspecting your panels look for signs of animal nesting or excessive debris build-up and check for cracks, chips, or corrosion. “Taking these steps can really help you prolong the life of your solar panels,” he says.

Dillon adds that before starting, turn off the electricity to the panels to prevent any accidents. Focus only on the top and front of the panels; avoid cleaning the underside.

Common maintenance issues and how to address them

One common maintenance issue includes installation problems such as loose terminals, pinched wires, and leaky conduits. Terminals are what hold wires in place and if they’re loose, the connection won’t work. Wires can also be pinched too tightly when installed or the conduits (the tubing that covers all the wires between equipment) could leak. All of these things can cause issues with your system and should be covered free of charge by your installer.

A solar inverter failure is another common maintenance problem. Your monitoring system should alert you to which inverter is experiencing issues. Sometimes, a software or firmware update will provide the solution. Typically, inverters are backed by a manufacturer warranty. In the same vein, most solar systems require an internet connection for monitoring, troubleshooting, and optimization of the system itself. If you have a communication issue, it may be as simple as a disconnected wire or a faulty router.

Systems can also experience ground and arc faults, both of which are electrical issues that most likely calls for a certified technician to repair. Ground faults, most likely caused by damaged wires, happen when electricity makes an unplanned route to the ground. An arc fault results when a wire is corroded or loose and can’t maintain a steady, firm connection.

Squirrels and other rodents present another common maintenance issue. They often decide your stylish solar array is the perfect place for a home and/or the wires offer a wonderful thing to sharpen their teeth on. To prevent this, install thin solar guard wire around your panels.

Cost considerations and incentives

Overview of the costs associated with installing solar panels

Dillon says there are four reasons people install solar: to save money, to save the planet, for energy independence, or (if you’re just one of those techy kinds of people who gravitate toward new things), you like owning the latest, cutting edge technology .

The cost of your initial installation depends on the size of your home and your electricity needs. It Includes the equipment, as well as the labor to install it, of which there is a substantial amount.

Average costs for an installation range from around $11,000 to $22,000 based on a 5KW system and varies by state. Data from the U.S. Energy Information Administration shows that construction costs of a solar system averaged $1,796 per kilowatt in 2019.

When Grant’s company does an installation, they begin with a roof crew who ideally are from the roofing industry. They go up and spike the roof and install the means to mount the panels, then run all the wires down to the end of the roof. Then electricians come in to hook everything up to your home. If you’ve ever hired anyone to do any kind of remodel on your home, you know that everything is a process and usually, there are specific people who perform specific tasks (for example, your carpenter rarely deals with anything electric and an electrician doesn’t do plumbing.)

Despite the high costs of installation and equipment, “solar energy offers substantial savings potential,” says Dillon, “although various factors impact its economic performance.” As well as the initial system cost, these factors include available incentives and the amount of energy produced and consumed.

“Tracking and monitoring these variables is crucial,” he explains, “considering that energy prices can fluctuate based on time of day, seasonal variations, and utility company policies.”

The generally accepted range is $60 to $340 per month savings, although there are significant variations on both savings from solar and the cost of the system. “Keep in mind that individual experiences can vary significantly,” Dillon says. “The savings can also vary drastically depending on your usage, utility rates, sunshine, and government incentives.”

“Some people, even with the same size house, have a very different usage profile than another,” says Liu. Many things could affect this. Maybe you have an electric furnace or an induction stove or perhaps an electric vehicle. In a home like this, you’d want to have a larger system to offset more energy, as well as a substantial battery system so that in the event of an outage you’re covered.

“I would recommend to any homeowner to do their homework; research the products out there and contact some local installers, because they're the ones that are going to tailor the options specific to your home,” suggests Liu.

Information on government incentives and rebates for solar energy

“States like Hawaii, California, and Massachusetts lead the way in government incentives,” says Dillon, “while states like Wyoming and Iowa are near the bottom.”

On a federal level, there’s an investment tax credit of 30% if you qualify. “There's also a lot of local utility or even state level incentives,” says Liu. Installers in your area should be well versed in these and most will even help you fill out and file the correct paperwork.

Future of solar energy

“As far as solar panels themselves,” says Liu, “there are a lot of technologies that were developed in the last 10 or 15 years that are really becoming commercialized now.”

Efficiency, for one, is going way up. Five or six years ago, a typical efficiency range would be in the 19 to 20% range, he tells me, while today, they reach 22 to 23%.

“What that really means is that the homeowners are getting more energy produced in the same roof,” he explains, “The same number of panels and the same roof equals more power.”

This drives down overall system cost.

Potential advancements and trends in the solar energy industry

On the battery storage side, there are new technologies that make it more affordable and efficient, as well as allowing it to interact with the grid more effectively. For instance, there's something called the virtual power plant program.

What that is, Liu explains, is that the grid works with something that can control a lot of different storage systems. So, during times where the grid needs excess power because there's a high demand, it will actually use power from all of these batteries that are installed in people's homes, deploying that to the grid. In this scenario, the homeowner receives credit for any power that they export at a specific rate.

I asked Liu if he thought that in the near future, as in our lifetimes, we’d reach the point where all of our power would be solar.

“I’m a bit of an idealist there,” he says, “I hope that we get there. I think from a renewable standpoint there are some ways that we can get there, but I don't think it'll just be solar.”

What he means is that it will have to be a mix of renewable energy, mainly because solar can only be produced during sunlight hours, which is not when people use energy. At a grid level, there will be a mix of different technologies.

“If you pair solar and wind, wind generates the most at night, solar generates the most during the day, so you have a little bit of an offset,” he explains. But he tells me the biggest thing that we have to add to the grid is actually energy storage. That's the future of how this all evolves. “It’s going to be a long time before we can fully end our reliance on fossil fuel for energy, but I'm optimistic that eventually we'll be more focused on renewable hydro, solar, and wind energy production.”

Liu says there are definitely grid scale storage deployments already out there, but the challenge of course, is energy production and storage. A typical home needs anywhere between 10 to 20 kilowatt hours of storage. At the grid scale, you're talking megawatts which translates into an incredibly large battery. While California has adopted quite a few, it's usually from a power provider, not the state or a city. There are solar power plants that generate megawatts of power, but you also have to be able to pair that with storage so you can provide power throughout the entire day, not just during the sunlight. All in all, a rather monumental undertaking.

For any homeowner, though, Lui says that solar provides a great option, especially because of the rising cost of electricity throughout the country. “I'm more sensitive to it because I'm in California and our electricity costs are going up pretty dramatically,” he says, “but the reason it's going up is because of the increased demand.” This makes solar a great way for a homeowner to offset that cost while doing something that is also clean for the environment, as well as modernizing their home. Any homeowner, he tells me, will see a good return on their investment of solar.

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