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How Do Solar Panels Work?

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Author Icon By Tamara Jude + 1 other Reviewer Icon Reviewed By Sarah Wilder Updated 12/20/2023

You may know that solar panels absorb the sun’s energy and convert it to power your home, but do you know how? Our guide explains the process in-depth so you can better understand how solar panels work and decide whether installing them is the right decision for you. 

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What Is Solar Energy?

Simply put, solar energy is energy from the sun that can be converted into thermal or electrical energy. It’s created through a process called nuclear fusion, which happens when protons collide and fuse to create helium. This process takes place constantly and generates a massive amount of solar energy.

The energy is sent toward Earth as electromagnetic radiation (EMR) in the form of photons. Solar panels then harvest this energy to produce usable electricity.

How Do Solar Panels Work?

Multiple silicon solar cells make up a solar panel. Solar panels are combined to make solar modules, which are wired together to form a solar array. These are the large sheets of panels you may have seen on roofs. 

The solar cells, or photovoltaic (PV) cells, have conductors attached to their positive and negative sides that form an electric field called the PN junction. When photons hit the PV cells, they knock electrons from their atoms. The electrons generate an electric current as they flow through the circuit. This electricity is called a direct current (DC). 

Your solar panels send DC electricity to an attached solar inverter or microinverter. The inverter converts the DC electricity into alternating current (AC). AC electricity flows through your home’s electrical system to power your major appliances and systems. Any excess electricity is stored in your solar battery, if you have one, or sent back to the grid if your utility allows it.

Types of Solar Panels

There are three main types of solar panels available for residential use: monocrystalline, polycrystalline, and thin-film. The type you use determines your solar panel system’s performance and longevity. Below is a breakdown of each solar panel type.

Monocrystalline Solar Panels

Monocrystalline solar panels—often referred to as “mono” panels—are made from a single piece of pure silicon. These are the most common solar panels because they’re the most efficient solar panels and last the longest. You can easily recognize monocrystalline panels due to their dark black color, which many homeowners find to be more aesthetically pleasing.

Pros and Cons of Monocrystalline Panels

Have the highest efficiency rates with an average of 15%–25%
Have the longest average life span of 35+ years
Require the least amount of roof space
Are more expensive than other solar panel types
Efficiency sometimes decreases in colder climates

Polycrystalline Solar Panels

Polycrystalline panels use older solar panel technology, so they’re slightly more affordable than monocrystalline panels. However, you typically require more of them to power your home because they’re less efficient, so they may cost as much as a smaller number of monocrystalline panels.

Polycrystalline panels are also more noticeable because they have a deep blue color. These panels are best for budget-conscious homeowners who have a lot of roof space.

Pros and Cons of Polycrystalline Panels

Are more affordable than monocrystalline solar panels
Have an average efficiency rate of 11%–17%
Are less heat-tolerant than monocrystalline panels
Have a noticeable blue color
Requires more roof space

Thin-Film Solar Panels

Thin-film panels are the least efficient and cheapest solar panel type. They’re most commonly used in large, industrial solar installations where space isn’t a constraint. These panels have the sleekest appearance among the three panel types: They’re entirely black, flat, and flexible in shape and size

Thin-film panels don’t require the scaffolding construction that monocrystalline and polycrystalline panels do. They’re best for small solar projects, such as converting a boat or RV, or small commercial buildings with thin metal roofs, such as warehouses. 

Pros and Cons of Thin-film Panels

Easy to transport
High heat tolerance compared to monocrystalline and polycrystalline solar panels
Least expensive
Efficiency ratings vary greatly depending on material type
Less durable than other panel types
Requires the most amount of roof space

The Cost of Solar Panels

According to the National Renewable Energy Laboratory (NREL), solar panels cost an average of $3.16 per watt in 2022. This amounts to $18,960 for a typical 6-kilowatt (kW) system. Solar panel costs vary widely from state to state and depend on the following factors.
Amount of sunlight: The more sun your home receives daily, the greater your potential savings.
Household electrical demand: This is the electricity your household uses each month. Homes with predominantly gas appliances use less electricity than those with primarily electric appliances. Homes with higher electrical demands require larger solar systems. You can get a sense of your electrical demand by reviewing your electricity bills from the last year.
Labor: Labor costs vary by location and are more expensive in areas with higher living costs. Different solar providers also charge different prices. Your initial quote will include labor.
Location: Solar panels cost more in some states than others, primarily due to regional electricity costs. Peak sunlight hours are also a factor. The more sunlight exposure your home receives, the more renewable energy you’ll be able to generate.
Payment options: You can choose to pay for your solar system up-front in full, by taking out a loan, or entering into a lease or Power Purchase Agreement (PPA). Each option affects how much you’ll pay in the long run. Full payments and loans are the most cost-effective because they qualify you for tax incentives. However, you’ll pay more over time with a loan due to interest rates. Leases and PPAs are cheaper up-front but disqualify you from incentives.
Panel quality: The equipment you choose dramatically impacts your electricity production. You’ll want to find the most efficient solar panels that fit your budget. More expensive equipment doesn’t always mean higher savings, while the cheapest option can sacrifice performance. Find the right balance between quality and price.
Panel size: A larger solar system costs more because it requires more labor and more equipment. However, it can yield greater savings over time.
Tax incentives: Federal and state solar incentives can reduce installation costs. Though state incentives vary by municipality and utility company, every homeowner can take advantage of the federal solar tax credit, which provides a federal tax deduction equal to 30% of your solar costs. Note that you must pay for your system in full or take out a loan to qualify.
Solar panel type: Monocrystalline panels are more efficient but more expensive than polycrystalline panels. Homes with limited roof space require more efficient panels.

How Solar Panel Installation Works

Solar panel installation is relatively straightforward. Your solar company handles most, if not all, of the steps for you. A representative begins the process by setting up a consultation to assess your energy needs and home design. Then, the solar installer creates a system tailored to your home’s specifications. It also handles required permits from your local municipality. Finally, a team will install the system and conduct final inspections. This process can take 60 days or longer.

Our Conclusion

Going solar may seem complicated, but choosing the best solar panels and a reputable installer will ensure your solar energy system operates at peak performance. A top solar installer will also make the experience approachable and stress-free.

We recommend getting at least three quotes from different solar companies to compare panel options, warranties, and pricing. Use our tool below to connect with vetted, local installers and get free quotes.

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FAQ About How Solar Panels Work

How do solar panels work when the power goes out?

Solar panels continue working during power outages as long as the sun is still shining. However, you’ll need a solar battery to use electricity during this time. A solar battery stores excess energy generated by your solar panels to use during outages or low sunlight hours. 

How many solar panels would it take to power a house?

The average home needs 15–25 solar panels to power the average 1,500-square-foot home. 

How long do solar panels take to pay for themselves?

Various cost factors determine how long it will take for your solar power system to pay for itself, but the average is 6–10 years.

Do solar panels work in the rainy season?

Yes, solar panels work in the rain. Solar panels work in most weather conditions, including during thunderstorms, in snow, and on cloudy days.