Solar panels work by harnessing solar energy through their photovoltaic (PV) cells. There are four main types of solar panels: polycrystalline, monocrystalline, PERC, and thin-film solar panels. Polycrystalline, monocrystalline, and PERC solar panels contain crystalline silicon (c-Si), a semiconductor material that directly converts sunlight into electricity through a process known as the photovoltaic effect. Conversely, thin-film solar panels use cadmium telluride (CdTe) and copper indium gallium diselenide (CIGS) instead of silicon.
A solar panel works in four steps. These are listed below.
- The panel’s PV cells capture photons from sunlight to produce an electrical current.
- The generated electricity flows into a conductive wire.
- The conductive wire delivers the electricity to a solar inverter.
- The solar inverter converts direct current (DC) into usable alternating current (AC).
When sunlight hits the solar panel, the semiconductor material absorbs the sun’s energy (photons), which allows electrons to move freely within the cell. These free electrons are captured as direct current (DC), which is an electrical charge that flows in one direction. However, most household appliances require alternating current (AC) as it flows in both directions. As a result, a solar inverter is needed to convert DC electricity into AC power.
How does the solar panel type affect how the solar panel works?
Solar panels work slightly differently according to each solar panel type. The four main solar panel types include monocrystalline, polycrystalline, PERC, and thin-film panels. However, regardless of the solar panel's design and technology for absorbing sunlight, the process of handling direct current (DC) is uniform across all types.
Monocrystalline, polycrystalline, and PERC solar panels use slightly different methods to capture sunlight compared to thin-film solar panels. The process by which the PV cells in the panel absorb energy differs across solar panel types. Monocrystalline cells are cut from a single crystal of silicon, while polycrystalline cells are made by melting multiple fragments of aluminum-silicon alloy together. The main semiconductor material in crystalline solar panels is silicon, which is responsible for these panels’ high-efficiency levels. PERC solar cells have an additional reflective layer of metal, allowing them to capture more sunlight, but still employ silicon as the primary semiconductor material.
Thin-film solar panels, in contrast to crystalline solar panels, operate using a different technology. These panels are created by depositing a thin layer of photovoltaic material onto a solid surface like glass or metal. The photovoltaic substance, which is a form of silicon (amorphous silicon), cadmium telluride (CdTe), or CIGS (copper indium gallium selenide), is responsible for absorbing sunlight and generating an electric current.
Regardless of the solar panel's design and technology for absorbing sunlight, the process of handling direct current (DC) is uniform across all types. After the solar panel's photovoltaic cells convert sunlight into DC electricity, this direct current is transmitted via a conductive wire to a solar inverter.
This inverter then works to transform the DC electricity into alternating current (AC), a form of electricity that is compatible with most domestic and commercial appliances and power grids. This standardization in the conversion process ensures that, regardless of the solar panel type, the electricity produced is universally operational and efficient.
How have solar panel working principles changed over time?
The fundamental working principle of solar panels has not significantly changed over time. Since the invention of the very first solar cell in 1883, solar panels have worked by using a semiconductor material to generate electricity from sunlight via the photovoltaic effect. When light particles (photons) strike the solar panel's photovoltaic cells, they knock electrons free from atoms, generating an electric current.
That being said, solar panels have improved considerably over the last 140 years. A solar panel’s measure of converting solar energy into usable electricity is its efficiency rating. With modern solar panels achieving over 23% sunlight conversion efficiency, solar panels have improved greatly over the last century.
At the turn of the century, solar panels had an efficiency rating of 1%. In the past few decades, selenium and gold have been replaced by silicon, and advances in P-N junction technology have made solar panels a vital and continuously developing source of clean energy worldwide.
The first solar cells invented in the 1800s had under 1% efficiency, making them insufficient as a practical energy source. It wasn’t until 1954 that Bell Laboratories developed the first usable silicon solar panel with roughly 6% efficiency. The optimization of crystalline silicon as a semiconductor has been the driver of dramatic solar panel efficiency gains since then. Manufacturers have created prototype solar panels with over 30 per cent efficiency, and most commercially available crystalline solar panels feature 15-23% efficiency levels.
The technology exists to push solar panel efficiency boundaries even further. Researchers have managed to create a 47.1 per cent efficiency using advanced cell structures. However, these high-efficiency panels normally use more expensive materials than are found in conventional solar panels. As a result, they aren’t currently cost-effective and remain unavailable on the market.
What has contributed to the biggest improvement in solar panel efficiency?
The significant improvement in solar panel efficiency has been driven by a convergence of factors. The largest improvement came via the development of the first silicon solar cell in 1954 by Bell Laboratories, which converted sunlight with 6% efficiency. This was a vast improvement from the previous iteration, which was 1-2% more efficient. Other contributing factors to the improvement of solar efficiency have included increasing awareness of alternative energy sources, which initiated a wave of renewable energy innovation from the 1970s onward. Diverse solar technologies, such as Concentrating Solar Power (CSP) and Solar Heating & Cooling (SHC), have increased options for harnessing solar energy.
Solar panel efficiency measures the amount of sunlight (irradiation) falling on the solar panel surface and converting it into electricity. The maximum solar panel conversion efficiency has risen to over 23% thanks to numerous breakthroughs in photovoltaic technology in the last ten years.
Research has continually enhanced solar cell efficiency, enabling significant improvements in sunlight-to-electricity conversion. Graphene-based solar cells and innovative applications, such as integrating solar technology into everyday objects, have also played a key role in solar panel development. Further, advances like ultra-thin and bacteria-enhanced solar technology, along with raindrop-fed solar power generation, contribute to solar panel efficiency's remarkable progress.
This significant efficiency jump resulted in a standard-size panel's power rating increasing from 250 to 400 Watts (W). Two main factors determine solar panel efficiency: photovoltaic (PV) cell efficiency, based on the cell design and silicon type, and overall panel efficiency, which is determined by the cell layout, configuration, and panel size. Increasing the panel size also increases solar panel efficiency by creating a larger surface area to capture sunlight. The most powerful solar panels now achieve up to 700 W power ratings.
What factors affect solar panel performance and efficiency?
The main factors affecting a solar panel’s performance are the panel tilt angle and orientation. The panel tilt and orientation describe the solar panel’s angle and position relative to the sun. A favorable tilt angle boosts solar performance to maximum levels when the sun is directly perpendicular to them. In the United States and the Northern Hemisphere, rooftops facing the true South perform best and generate the most solar energy.
The ideal solar panel tilt for solar panels in the United States is generally equal to the latitude angle of the location of the property. This means that for optimum solar performance (ANCHOR), the roof pitch of a property should be equivalent to the latitude angle, with the panels mounted at the same angle as the roof. For instance, a household in Los Angeles benefits most from a roof pitch of around 34°, aligning with the city's approximate latitude angle (34.05°).
How does Solar Give Energy to Solar Panels?
Sunlight gives energy to solar panels through a process known as the photovoltaic (PV) effect. The photovoltaic effect is a process where photons (sunlight particles) hit the thin silicon layer on the top side of a solar panel and release electrons from the silicon atoms. This PV charge produces a direct electrical current (DC) which is captured by the wiring in solar panels. This DC electricity is then sent to an inverter, which converts it into alternating current (AC) electricity, the type of energy used by households' appliances. AC electricity is either used directly and stored for later use in batteries or fed back into the grid.
How does Concentrating Solar-Thermal Power Work?
Concentrating solar-thermal power (CSP) works through mirrors that reflect and focus sunlight onto a receiver to generate electricity. Concentrated solar-thermal power is an approach to producing electricity as mirrors reflect, concentrate, and direct natural sunlight on a specific point, which converts into heat. The heat creates steam, driving a turbine to generate electrical power.
Concentrating solar-thermal power systems are typically used for utility-scale projects like solar farms. These utility-scale CSP plants are configured in different ways, such as power towers and linear systems. Power tower systems position mirrors (or Heliostats) around a central tower acting as the energy receiver.
Linear systems include rows of mirrors that consolidate the sunlight onto parallel tube receivers positioned above them. Smaller CSP systems are located directly where power is needed. An example is single dish/engine systems which produce 5 to 25 kilowatts of energy per dish and operate independently of power grids. They are commonly used in remote, sunny locations for pumping water and providing electricity to isolated communities.
How does a Power Tower System work with Solar Panels?
In a power tower system, solar panels are used in conjunction with heliostats, or flat mirrors, to reflect and direct sunlight onto a receiver on top of a tower. The mirrors in a solar power tower system absorb sunlight by tracking the sun at two axes. The receiver absorbs the sunlight and converts it into heat, which is then used to drive a turbine generator. In power tower solar systems, a heat-transfer fluid is employed to heat a working fluid within the receiver.
This heated working fluid is then used in a traditional turbine generator to generate electricity. Various fluids, such as water, high-temperature molten salts, or sand-like particles, are employed as heat-transfer mediums to optimize the power cycle temperature and improve energy efficiency. A power tower system is an example of a concentrated solar power (CSP) system.
A power tower system generally harnesses more solar energy than solar panels alone, because of the increased concentration of sunlight achieved by using mirrors. Since the mirrors are able to redirect direct sunlight onto the receiver from any angle, these systems also tend to have greater efficiency levels than other types of solar arrays. Power Towers are capable of focusing on sunlight up to 1,500 times.
The main advantage of a solar power tower over traditional solar panels is that they produce energy 24 hours a day, even in cloudy weather. Additionally, they produce more energy than traditional solar panels thanks to the high concentration of light on the tower, which yields higher temperatures. Some solar power towers use water/steam as the heat-transfer fluid, while more advanced designs experiment with high-temperature molten salts or sand-like particles due to their superior heat transfer and energy storage capabilities.
This thermal energy-storage capacity allows the system to generate electricity during overcast weather or at night. The main disadvantage of power tower systems is that they require significant initial investment and space. The large field of mirrors and power tower ranging from 50 to 100 meters tall also negatively impact the local landscape.
How Does a Linear Concentrator System Concentrate Solar-Thermal Power?
Linear concentrator systems concentrate solar-thermal power by gathering sunlight through long rectangular, curved (U-shaped) mirrors. A linear concentrator system comprises these mirrors facing the sun and focusing sunlight on tubes (or receivers) running the mirrors' length. The receivers contain a sunlight-heated fluid that heats a traditional power cycle, spinning a turbine and driving a generator to produce electricity.
Some linear concentrator systems generate steam directly in the solar field, eliminating the need for costly heat exchangers. Linear concentrating collector fields include numerous collectors in parallel rows generally aligned in a north-south orientation to maximize annual and summer solar energy collection. A single-axis sun-tracking system configuration allows the mirrors to track the sun from east to west during the day, ensuring that the sun reflects continuously onto the receiver tubes.
Other linear systems include thermal storage, where the collector field is oversized to heat a storage system during the day for additional steam. This steam produces electricity in the evening or during overcast weather. Some linear concentrator systems are designed as hybrids employing fossil fuel to supplement the solar output during periods of low solar radiation.
These include a natural gas-fired heater or gas-steam boiler/reheater. Future linear systems sometimes integrate existing or new combined-cycle natural gas- and coal-fired plants.
How Does a Thermal Storage System Work?
A thermal storage system uses compressors in chillers, boilers, or remote terminal units (RTUs) to cool a block of ice at night when a building consumes the least energy. These “off-peak hours” are when energy uses are minimal, allowing for the most efficient and cheapest cooling periods in the day. During hot periods, the ice melts, and the vapors cool the building instead of traditional HVAC system compressors.
Solar thermal energy works in a similar manner, where the sun's rays are reflected onto a receiver, creating heat used to generate electricity for immediate or later use. Solar collector panels replace household water heaters by heating water in the tubing lacing through the panels. This hot water travels through pipes, giving energy to radiators or radiant flooring tubing throughout the household.
These solar heating systems are either passive or active. Passive systems use natural circulation, while active systems utilize pumps to circulate water and generate heat. Several solar thermal energy storage technologies have been implemented since 1985, including the two-tank direct system, two-tank indirect system, and single-tank thermocline system.
How does Solar-Grid Integration Affect How Solar Systems Work?
Integrating solar energy systems with the grid significantly impacts their operation and requirements. Solar-grid integration requires the use of solar inverters, which are crucial in converting the direct current (DC) produced by solar panels into alternating current (AC) compatible with the grid and home appliances.
Solar inverters not only facilitate the interconnection between the solar system and the grid but also ensure the safety and efficiency of the system. The solar inverter regulates the voltage and current levels and detects any faults in the system.
However, these inverters contribute to the cost and complexity of the solar system. Installation involves professional assistance, adding to labor costs. Furthermore, the maintenance and potential replacement of solar inverters, which is necessary every 10-15 years, constitute additional costs. Despite these expenses, the long-term benefits and savings on energy bills make solar-grid integration a cost-effective choice for many households and businesses.
While solar inverters enhance the utility and performance of solar systems, they also represent a significant component of the system's cost and require careful consideration during the planning and installation phase.
How does Solar Panel Installation Placement affect Solar Systems' Efficiency?
Solar panel installation affects a solar system’s working efficiency by determining how much direct sunlight solar panels receive. To help maximize solar panel efficiency, installers will often adjust the angle and orientation of solar panels during installation. This adjustment helps to ensure that the panels are receiving as much direct sunlight throughout the day as possible. In most cases, household solar panels are mounted on the roof of a house and facing either north or south, depending on where they are located. Countries like the United States are in the northern hemisphere, and solar panels generate more electricity when they receive sunlight coming from the true north.
An alternative option for solar panel installation on roofs facing east or west, which would otherwise be unable to face north, is to mount them on a rack facing north, although this option involves additional costs. Alternatively, solar panels are sometimes mounted on the north-facing walls of a home. In cases where zoning permits, this method is an effective way to maximize solar panel output.
What should a homeowner know about how solar panels work?
Homeowners should know, above all, that solar panels must be properly maintained to achieve their highest energy output. Solar panels generally require minimal maintenance to function; however, they need periodic cleaning to ensure dirt, leaves, and other debris don't obstruct the sun's rays. A home solar monitoring system allows homeowners to keep track of any external factors affecting solar panel functionality.
It is also important that homeowners understand how the time of day, shading, cloud cover, and adverse weather conditions significantly impact the efficiency of solar panels. Solar panels are most effective during peak sunlight hours, usually between 10 am and 3 pm. They produce the most power when the sun is at its highest point in the sky. Shading is also a crucial factor to consider. Shadows cast by trees, neighboring buildings, or other obstructions affect the amount of sunlight reaching the solar panels, thereby decreasing their power output. Even partial shading sometimes leads to a significant drop in energy production.
Cloud cover also impacts solar panel efficiency. Although solar panels are still able to generate electricity on cloudy days, their output is considerably reduced. Similar to how some people get sunburned on a cloudy day, solar panels still produce power when it's overcast. However, the denser the cloud cover, the less efficient the panels will be.
Lastly, severe weather conditions such as heavy snowfall or hail also affect solar panel performance. Snow blocks sunlight from reaching the panels, while hail causes physical damage. It's crucial for homeowners to take necessary precautions to protect their solar installations if severe weather is forecasted.
Lastly, integrating a solar panel monitoring system into a solar home setup lets a homeowner track how much energy their panels produce on any given day and how much they generate over time. This allows the owner to see how external factors such as snow and debris affect solar panel performance and how well they maintain efficiency across their life. The monitoring system also alerts the owner if a panel breaks or malfunctions so it is either replaced or repaired.
Which Part of the Solar Panel Does What When a Solar Panel Generates Electricity?
Each part of a solar panel plays an important role in generating clean electricity. There are twelve components of a solar panel that work to make this happen, as follows. Solar cells, also referred to as photovoltaic (PV) cells, act as the foundational components. These PV cells harness sunlight, utilizing the photovoltaic effect to transform it into direct current (DC) electricity. To render this electricity practical, a solar inverter is employed for its conversion into alternating current (AC).
Solar racking ensures stability during installation by providing the necessary support for solar panels, while net metering enables the surplus energy to be credited. Performance monitoring allows for the tracking of panel output, and the storage of excess energy in batteries facilitates the utilization of solar energy during power outages or nighttime. Charge controllers are responsible for voltage regulation, while materials like EVA and back sheets safeguard the panels. Aluminum frames provide structural support, interconnectors transmit electricity, and silicone glue bolsters stability and safeguard the panels from internal moisture damage.
How Does a Solar Panel Regulator Work?
A solar panel regulator works by controlling the amount of electricity from the solar panel flowing into the deep cycle battery bank to avoid the batteries overcharging. The regulator accepts the voltage from the solar panel and provides a safe and usable output voltage to charge a battery. Solar regulators require a battery to regulate the voltage flow from the solar panel system to the deep-cycle battery.
Deep cycle batteries are energy storage units in which a chemical reaction develops voltage and generates electricity. The solar regulator controls the voltage as these batteries repeatedly cycle (discharge and recharge). The solar panel regulator is a small box comprising solid-state circuitry placed between a solar panel and a battery and works with a stand-alone (off-grid) system or a grid-connected solar system using a backup battery bank.
How does weather affect solar panels?
Weather affects solar panels by influencing the amount of solar energy produced throughout the day. A solar panel system is most efficient when it receives ample direct sunlight without excessive heat or humidity. Adverse weather, such as cloud coverage and snow, reduces the amount of power a solar system provides.
Even on overcast or rainy days, solar panels are still able to generate energy, although not at their maximum capacity. Various factors, including clouds, fog, and shading from trees, obstruct sunlight and reduce a solar panel's power output. The extent of power production during cloudy weather is influenced by the thickness of cloud cover. While solar panels do capture solar energy on cloudy days, their efficiency is often reduced by up to 50% compared to sunny conditions.
Additionally, solar panels function fine in the rain, but the associated cloud coverage affects their sunshine intake. Heavy rain clouds negatively affect solar energy production, but rainfall provides a natural means of cleaning the solar panels. Rain rinses solar panel surfaces, removing layers of dirt and debris that block sunlight. Solar power systems sometimes store less energy when they rain, but an advantage is that the rain cleans the panel surfaces. Snow reduces solar power generation more than rain and cloud coverage because it accumulates on panel surfaces and blocks light. However, snow eventually melts and slides off panels, which also cleans the panels and keeps them free of debris.
Is the rainy season not good for solar panels?
No, the rainy season is not good for solar panels. Solar panels require sunlight to generate electricity, and they collect less sunlight if rain droplets and clouds block the sun. The panels produce electricity via indirect sunlight exposure during heavy rain periods but at 10% to 20% of the solar system’s optimal production.
An individual solar panel comprises 60-72 solar cells, whose main material used is silicon. Durability and longevity are vital factors to consider when evaluating solar panels. Solar panels also undergo various rigorous tests to ensure their reliability and durability over their typical lifespan. These tests simulate extreme weather conditions, including hail impact tests, thermal cycling, humidity-freeze tests, and damp-heat tests. These robust tests enhance solar panels’ protection from damage by various weather conditions, including monsoons.
Therefore, it is a common misconception that rain damages solar panels. In reality, they are well-equipped to withstand these conditions, and rain even contributes to their efficiency by cleaning their surface. While low performance and damage risk during rainy seasons are some of the disadvantages of solar panels, protective covering protects them from heavy rain at the cost of reduced sunlight conversion rates.
The Ingress Protection (IP) rating is a standard metric that determines how well solar panels protect themselves from dust and moisture ingress. For example, a solar panel with an IP rating of IP67 is considered dust-tight and protected against water projected from adverse weather conditions, endorsing its resilience in rainy conditions. If the second digit on a solar panel's IP rating is 7, this assures the solar panel's resilience to commonplace weather elements, such as rainfall and snowfall.
What are the components of a solar panel?
The components of a solar panel comprise twelve vital parts. These are photovoltaic (PV) cells, a solar inverter, solar racking, net metering, performance monitoring, batteries, charge controllers, EVA (ethylene vinyl acetate), back sheets, aluminum frames, interconnectors, and silicone glue.
At its core, solar panels work due to the photovoltaic (PV) cells they contain, which capture sunlight and convert it into electricity through the photovoltaic effect. To make this electricity usable, a solar inverter plays a key role by converting it from direct current (DC) to alternating current (AC). Solar racking provides essential support for the panels during installation, while net metering allows excess energy to be credited.
Performance monitoring helps track panel output, and surplus energy is stored in batteries for use during power outages or at night. Charge controllers regulate voltage, and protective materials like EVA and back sheets shield the panels. Additionally, aluminum frames provide structural support, interconnectors transmit electricity, and silicone glue enhances stability while safeguarding against internal moisture damage. Understanding these components is crucial for harnessing the full potential of a solar panel system.
How does a Photovoltaic Cell function in Solar Panels?
Photovoltaic (PV) cells, also known as solar cells, are electronic components that produce electricity when exposed to light particles, known as photons. In a solar cell, photons hit a semiconductor material, such as silicon, and release electrons from the silicon atoms. This reaction is known as the photovoltaic effect and was first discovered by French physicist Edmond Becquerel in 1839.
PV cells are essential in the generation of solar electricity. However, a single PV cell cannot produce enough renewable energy for an entire household. So, while the main function of photovoltaic cells is to produce solar energy, several solar cells must be wired together to create a functional solar panel. To provide enough energy for a residential home, a solar array consisting of a collection of solar panels must be installed.
How does a solar inverter work with solar panels?
Solar inverters convert the direct current (DC) power produced by solar panels into alternating current (AC) power that is used in homes and businesses. Solar inverters are vital for transforming energy collected from the solar panels into a usable source of renewable electricity.
Inverters create alternating currents and send them to fuse boxes and buildings. The AC is delivered to the home's switchboard, where it powers all appliances as required. Excess energy from the fusebox is either sent to a battery storage system or back into the grid, depending on the homeowner's usage and system setup.
Most home appliances, such as TVs, fridges, and lights, use alternating current (AC). The solar power inverter’s role is to convert the DC into the necessary AC for everyday use in the home. Some systems use micro-inverters, not a single central inverter, which attach to the underside of each panel. These gather and transform DC power to an alternating current. However, these options are more expensive.
A solar inverter is not essential for a solar PV system if solar power is solely used for appliances requiring DC power. Solar cells only produce DC electricity, with DC voltage values of 12, 24, and 48 volts being the most common. Without an inverter to regulate the voltage, a solar system delivers different currents, potentially overloading and damaging household appliances.
How to determine how many solar panels your household requires?
To understand the required number of solar panels for your household, use a solar panel calculator to divide your annual electricity usage by your region’s production ratio and divide that number by your solar panels’ power output. A solar panel calculator estimates the actual daily energy (or solar power as a function of time) in kilowatts per hour (kWh) or watts per hour (Wh) that your solar panel produces, including its rated power and solar energy available in your region.
Calculating the optimum number of solar panels to meet your energy needs depends on your annual electricity usage, the solar panel wattage, and the production ratio of the solar system you’re considering. Annual electricity usage is the energy and electricity used in the home for an entire year. Solar panel wattage is the electricity output of a particular solar panel under optimum conditions, and the production ratio is the estimated energy output of a system over time (in kWh) relative to the actual system size (in Watts). The average electricity consumption for a household in the United States is around 10,650 kWh per year, as reported by the U.S. Energy Information Administration. That number is a solid placeholder for a solar panel system or array size to be calculated using a solar panel calculator (ANCHOR).
Does having a solar panel lower your electric bill?
Yes, having a solar panel system lowers your electricity bill because a solar system produces finite and free electricity from the sun. This energy is used to reduce or completely replace your electricity bill. Some utility companies also offer incentives for homeowners to install solar panels on their homes, which helps lower the cost of installing a solar system. The total savings generated by the solar incentives in the US vary by state and depend on the system size and household energy consumption level.
In the United States, the cost of transitioning to solar power is on the decline, partly attributed to the stability provided by an expanded federal tax credit. Presently, approximately 3.4 million homes in the United States have embraced solar panel installations. That amounts to over 1.6 million homes enjoying the advantages of solar panels by producing their own solar energy, reducing their electricity bills, and minimizing their carbon footprint.
Is it safe to use a solar panel?
Yes, it is safe to use a solar panel once a professional licensed solar installation company has performed the installation correctly. A licensed electrician correctly installing the solar panels minimizes the risk of incorrect wiring causing electrical fires, which occur when homeowners carry out DIY installations.
As with any electrical power, such as a household's main power feed, improper wiring or poor-quality installation materials are often hazardous. Incorrect electrical wiring generates solar panel sparks, causing electrical fires. Home solar installers must be certified electricians, and all solar systems must be permitted and inspected by the local governing body for electrical installation, as with any other home electrical projects. A proper solar procedure requires the solar installer to fully inspect a home’s roof to ensure adequate structural support for the solar panels before and after installation. Regular system inspections should be performed by a qualified solar installer to guarantee the safe continued use of the solar panels.
How does a Solar Panel Work at night?
Solar panels require sunlight to create energy and therefore solar panels do not work at night. Technically, they are able to generate nighttime power from street lights and the moon, but the output is minimal. Due to this, solar panels go into sleep mode at night by becoming inactive and ceasing electrical production.
While solar PV panels cannot produce energy after the sun sets, a home utilizes solar energy produced during the day if stored in a battery. These batteries store excess solar power for later use when a home's energy needs exceed its solar production.
How does a solar panel decrease the cost of electricity?
A solar panel decreases the cost of electricity by using energy stored in a solar battery to power household appliances and export surplus energy back to the main grid for feed-in tariffs. A feed-in tariff is a payment from the electricity retailer for each unit of electricity a photovoltaic (PV) solar system exports to the grid. It is typically lower than the electricity tariff paid for mains electricity use.
In the United States, approximately 25 to 40% of electricity produced by photovoltaic systems is typically consumed within households, while the remaining surplus is exported to the grid. This practice helps decrease the reliance on grid electricity, subsequently lowering homeowners' expenses with their utility providers. Additionally, solar system owners in the U.S. accumulate credits for the excess electricity they contribute to the grid, thanks to various state-specific net metering programs and federal incentives supporting renewable energy.
What should a homeowner know about how solar panels work?
Homeowners should know that solar panels work to reduce their electric bills and save money by absorbing sunlight and generating renewable direct current (DC) electricity. This solar electricity then travels to a solar power inverter, which converts the DC solar electricity into usable alternating current (AC) solar electricity for home appliance use.
Furthermore, through government solar incentives, any excess solar electricity generated by the solar panel installation returns to the grid. It is recorded as a credit on the homeowner's monthly utility bill or is purchased by the utility provider at their set rate. At night, homeowners either draw the electricity from the utility's grid or their solar system's storage battery. Equipping a solar panel system with solar battery storage ensures homeowners continually benefit from energy bill savings for 30+ years, which is the average solar panel lifespan.
What is the federal solar tax credit and how does it work?
The Federal Solar Tax Credit, or the Investment Tax Credit (ITC), works by allowing homeowners and businesses to deduct a portion of their solar photovoltaic (PV) system installation costs from their federal taxes. The solar tax credit amounts to 30% of the cost of installing a solar energy system and applies to systems installed between 2022 and 2032, following the extension and increase by Congress in August 2022.
The federal solar tax credit reduces the federal income taxes that homeowners or businesses owe for the year they install the system. The ITC applies directly to the amount of tax owed, reducing it by 30% of the cost of the solar installation. Should the tax credit exceed the taxes owed in the installation year, the surplus credit carries over to the next year, ensuring the benefit is fully utilized. However, it's important to note this policy provides a deduction against taxes owed, not a refund. To determine if you are eligible for the federal solar tax credit or state-based incentives, our Solar Incentive Finder can provide an estimation of your payback.
The introduction of the ITC has significantly contributed to the solar industry's growth in the U.S., with an increase of over 10,000% and an average annual growth rate of 50% over the past decade. This federal incentive has made solar energy more accessible and affordable, encouraging the adoption of clean energy technologies and supporting the industry's expansion.