Solar Power:
Solar Energy Explained

Learn everything about solar power and how solar energy works, in this full breakdown article.

Solar Power - Solar Energy

Many of us know what it’s like to enjoy a relaxing day under the summer sun or appreciate the warmth of sunlight in winter. But have you ever wondered just how much of the sun’s energy gets absorbed by Earth’s atmosphere each year?

If so, you’ll be excited to know it’s roughly 3,850,000 exajoules.

And if you find yourself wondering, “what’s an exajoule?”, that’s one of the many things this article will cover. For now, suffice it to say that 3,850,000 exajoules is more than 8,000 times more energy than humans use in a year. In short, the sun is the oldest and most productive power plant in our solar system.

But the real question is, what can we do with all of that energy and what are the best ways to access it in our everyday lives?

Whether you’re a solar greenhorn looking for a 101 or a solar savvy consumer doing a bit more research before investing, this article sets outs to provide answers to your burning questions (that’s a solar pun) and leave you a bit better suited to discuss or pursue solar energy options in your day-to-day.

Solar science basics

The term solar energy can refer to a lot of things. So, what better place to start than with a little bit of science to get our solar jargon straight.

Solar energy, broadly speaking, refers to the radiant energy emitted by the sun. Humans perceive this energy as the natural light and warmth that hits our eyes and skin on a sunny day.

Solar energy helps plants grow and produce food. It warms large bodies of water that in turn support a diversity of life. It helps human bodies generate necessary nutrients to keep us healthy. And, in more recent history, it powers and heats our homes.

But how is all that energy created and how does it make its way here?

Solar energy

Think of the sun as a reactor–more specifically, a thermonuclear fusion reactor. At its core, atoms are fused together under incredible heat and pressure, creating large amounts of energy in the process. That solar energy radiates into space and some of it, after traveling 93 million miles, reaches Earth.

Exactly how much reaches earth? Well, to recap, roughly 3,850,000 exajoules every year. Of this, roughly 70 percent of that energy actually make it to Earth’s surface, while the other 30 percent is bounced back into space by our atmosphere.


Energy is expressed in different ways, which makes talking about it complicated. But you have to start somewhere, so let’s start with joules.

A joule (J), named after the scientist James Prescott Joule, is a standard unit of energy that describes the work needed to move an object with a one Newton force, one meter. Since the technical definition raises more questions than it answers, it’s simpler to say that one joule is equivalent to the amount of energy it takes to raise an apple one meter above your head.

But the sun produces A LOT of energy (and that’s a lot of apples to keep track of), so it’s easier to talk about it using larger units of energy—hence, the exajoule (EJ). One exajoule is equal to one quintillion joules, and makes an inconceivably large number seem a bit more approachable.

And while joules and exajoules are important when talking about energy, the power that uses energy is what we talk about more in our day-to-day lives. And the way we talk about power is in watts.


A watt (W), named after the inventor James Watt, measures the rate at which energy is used in a given moment. Since we know to talk about energy in joules, we can say that one watt is equivalent to one joule per second.

Watts are commonly used for small electrical items, like light bulbs; kilowatts (1,000 watts) for larger appliances, like refrigerators; megawatts (1,000,000 watts) for large systems, like cities; and gigawatts (1,000,000,000 watts) for very large power plants.

And lastly, there are watt-hours. Watt-hours and kilowatt hours (kWh) express how much energy something uses over a specific period of time. If you’ve looked at a utility bill recently, your monthly electricity use is expressed in kWh and this value, multiplied by your electricity rate, determines how much your monthly bill will be.

Confused yet?

That’s okay. The takeaway is that joules, watts and watt-hours allow us to do two important things. They allow us to talk about energy aspects of our everyday lives, including solar energy, and they outline the relationship (and difference) between energy and power.

Because while Earth has enjoyed the benefits of solar energy for millions of years, only in recent human history have we figured out how to convert that energy into usable power.

A brief history of solar

Humans have been using solar energy for a long time. From magnifying sunlight to create fire or concentrating sunlight to create heat rays, to the first solar ovens used to bake food—solar energy has been an essential part of human history.

It was not until the past few hundred years, however, that curious minds around the world began to discover the full potential of solar energy and create innovative ways to capture it.

  • First solar collector (1773): Swiss scientist Horace-Benedict de Saussure creates the first solar collector, using an insulated box covered with multiple layers of glass that absorbed sunlight as heat.
  • Photovoltaic effect (1839): French physicist Edmond Becquerel stumbles upon the photovoltaic (PV) effect when, experimenting with metal electrodes submerged in an electrolyte solution, he noted that an electric current was produced when exposed to light.
  • First solar module (1883): American inventor Charles Fritts creates the first solar cell using selenium, the first demonstration of light energy being converted to electrical energy. While selenium is a photoconductor—a material that conducts more electric current when exposed to light—it’s not a very efficient one. Fritts’ solar cell functioned at roughly 1% efficiency, and was never mass produced.
  • Photoelectric effect (1905): Einstein publishes a paper postulating that light is made up of tiny packets of energy, called photons, and establishes the scientific groundwork that previous discoveries had lacked around photovoltaics.
  • Silicon semiconductor (1940): A century after Becquerel’s discovery, a researcher at Bell Labs named Russell Ohl discovers the semiconducting properties of silicon. Working on a damaged silicon sample, Ohl noticed that a current was created when exposed to light.
  • First modern solar cell (1954): Bell labs produces the first modern solar cell, functioning at 6% efficiency, and ushers in a new era of solar energy and power.
  • Oil Embargo (1973): The Organization of Arab Petroleum Exporting Countries (OAPEC) places an embargo on oil trade with the United States, resulting in scarce fuel supplies and sky-high prices. The event was pivotal in spurring innovation in alternative energy industries, including solar.

Fast forward a few decades and we find ourselves in a period of rapid solar growth. In 2018 alone, solar installations reached 100 gigawatts, bringing total global installed capacity to 500 gigawatts. To put that in perspective, that is (roughly) enough energy to cover the total energy use of more than 15 million U.S. homes.

Looking forward, total installed solar capacity is projected to double existing capacity, for an additional 100 GW by 2021. And with this growth, a whole host of efficient, innovative technologies are changing the way that regular consumers think about energy use in their homes, workplaces and daily commutes.

Solar technologies today

A lot has changed since the first solar collectors and cells were developed, allowing efficiencies in solar technologies to rapidly improve. ⁠While the first solar cells produced power at roughly 1% efficiency, the best solar cells today achieve 20% efficiency and continue to improve.

Innovation has also increased, leaving the days of traditional solar panels as the only option in the past.

Active vs. Passive Technologies

Solar technologies fall into two broad categories: active and passive.

The technologies discussed in the next section are primarily active systems. Active systems are a good option when you want to replace an existing energy source (like grid electricity or fuel oil) with a cleaner, more efficient alternative.

On the other hand, passive systems do not produce any energy but instead focus on maximizing the benefits of sunlight (both in terms of light and heat). Often this is done by orienting a house to receive longer periods of sunlight throughout the day or incorporating building materials that store heat efficiently. Passive systems are a good option when you want to make a new or existing space more efficient, thereby reducing the amount of energy that is consumed.

Active and passive systems are also frequently combined to maximize efficiency, reduce costs, and enhance occupant health. And while new technologies emerge onto the market every year, the majority fall within three major categories.

Solar photovoltaics

You know those shiny black panels arranged neatly on the neighbor’s roof? More likely than not, these are solar photovoltaics (solar PV) and are what probably first come to mind when you think of solar technologies.

But the solar panels you see on a roof or on the side of the highway are only one part of a larger, connected solar PV system.

Anatomy of a solar array

Most solar panels, which are the heart of any solar PV system, are either monocrystalline, polycrystalline and thin-film.

The former two are standard silicon panels that vary slightly in appearance and efficiency, with monocrystalline being the more efficient and costly of the two.

In contrast, thin-film often uses a non-silicon-based, malleable structure that has a minimal profile, is cost effective, and can be applied to areas where traditional solar panels would not work. The drawback of thin-film is the comparable low efficiency of around 11%.

For solar PV arrays using standard silicon panels, the installations include three primary segments. PV systems may also include meters, monitoring systems and battery storage, but these components vary depending on system design preferences.

  • Solar panels: Monocrystalline or polycrystalline modules which house the collection of solar cells (usually 60-92 cells in total) that capture and convert solar energy. The number and arrangement of panels varies depending on the electricity demand and the positioning of the building or structure.
  • Mounting system: Custom, durable mounting systems are designed for the specific solar array and must be integrated with the structure they are being attached to. Mounting is required to ensure that the panels are secure and protected from the elements.
  • Power inverter: An inverter is required to convert the electricity generated by the solar cells from direct current (DC) to alternating current (AC). Inverters may be installed at the system level or at the panel level (as with microinverters).

Wait, did you say AC/DC?

Alternating current (AC) and direct current (DC) refer to the two types of current used in electric power systems. Alternating current (AC) is used for the transmission and distribution of electric power, as it can travel across long distances with minimal losses. AC is also used to power most home appliances. But solar cells produce DC power, which is used for things like batteries.

Regardless of whether a solar array is grid-connected or off-grid, an inverter is necessary for converting the power produced by the array into power used by almost everything else.

Solar PV system types

Solar PV arrays (systems of two or more solar panels) range from small, residential roof-mounted arrays to solar car ports that span corporate parking lots. Which design you chose will depend on the amount and type of space available.

Roof mounted systems are the most common for residential and commercial installation, varying in size relative to the building space available. Ground mounted systems are ideal for larger arrays that need more space than most roofs can provide and are often built on unused land.

Solar canopy systems, also called solar car ports, are a newer installation type that has gained traction in recent years. These free-standing solar structures can range in size considerably and are ideal candidates for parking areas. The benefits of solar canopies go beyond electricity production, as they can offer protection to vehicles, help maintain parking surfaces, and also provide power to electric vehicle charging stations.

In addition, the market is bustling with new, innovative technologies to meet the needs of today’s industries, residents and commuters. Innovative PV systems—including solar charging stations for electric cars, mobile PV units, solar windows, and even solar paint—can provide creative alternatives if more traditional systems are not feasible.

Additional things to consider

There are some important solar PV decisions that go beyond the basics, including integrating with the grid, staying “behind the meter”, net-metering opportunities, and energy storage. And while these options are a part of any solar PV project, it’ s worth speaking to each of them in detail.

  • “Behind the meter” systems: For most residential systems, the solar PV system will likely be “behind the meter” (BTM). BTM systems are connected on your property, behind the utility meter, and paired specifically with the energy needs of the building. This allows the energy supplied by the PV system to be used before drawing energy from the grid, which in turn reduces energy costs. Many BTM systems participate in net-metering for any energy that is not used on-site, which can offer additional energy costs savings. Net-metering programs are highly variable, and some utilities may not offer them at all, so knowing what is available in your utility area is an important piece to consider.
  • Standalone systems: In contrast, these systems connect on the utility side of the meter and have no associated electric load, thus all power feeds directly into the grid rather than being used on-site. This option is attractive if you want to use your solar PV system to generate revenue.
  • Energy storage: Adding battery storage to solar PV allows for more flexibility and interaction with your system. It enables you to store energy for later use or reduce electricity consumption during particular times of use when rates are high. Battery storage offers added benefits to solar PV systems through increased energy resiliency, and opportunities to participate in demand response programs that result in additional demand charge savings.
  • Community solar options: In cases where a home is rented or shared with other tenants, or there is no available space on-site to house a PV system, community solar is an innovative option. Systems can be located on publicly owned or jointly owned land and are shared by subscribers in the community, who then receive a monthly credit on their utility bill for the portion of power produced.

And if, after these considerations, you realize solar PV is not the best fit, that doesn’t mean that you’ve missed the solar energy boat.

Solar thermal

If the panels on your neighbor’s roof are not solar PV, then they are likely solar thermal. At the end of 2018, 686 million square feet of solar collectors were installed, globally, with an annual thermal energy yield of 386 terawatt hours (that’s one trillion watts).

Like solar PV, there are various types of solar thermal technologies that convert solar radiation into useful heat. Regardless of type, however, all solar thermal technologies rely on some kind of absorption material used to capture the radiation. Once captured, the thermal energy can be used for domestic hot water, or dispersed for space heating in our offices and homes.

The most common solar thermal technologies are small-scale, residential systems used for domestic hot water supply, but can also provide space heating. Evacuated tube and flat plate collectors are the most common types of technologies used for these residential systems, but other types include solar air, glazed and unglazed solar collectors.

Which technology is best suited for you will depend on what energy elements you are trying to focus on (water or space heating) and the size of the system you will need to meet all or a portion of your thermal demand.

Concentrating solar power

For large scale systems that provide heat and/or electricity for industrial processes or district heating and cooling, concentrating solar power (CSP) is the umbrella technology that describes a handful of innovative designs to maximize thermal gain. CSP systems do this by concentrating solar energy using mirrors, troughs and towers and channeling it to a centralized collector. The captured energy is then used to drive steam turbines, which in turn produce electricity.

CSP systems are big, with the minimum capacity threshold of about 100 MW. For comparison, Ivanpah, the largest CSP facility in the world, has 392 MW of capacity—equivalent to powering more than 94,000 homes.

Due to the size of these systems and the high solar energy demand, they tend to be in areas like desserts, where there is abundant, consistent sunlight and large areas for development.

Solar incentives

The price of solar has decreased drastically in recent years, falling more than 70 percent in the past decade . Unfortunately, installations often still require significant upfront costs depending on technology and size. Luckily, however, a wide array of incentive programs and financing options are now standard fare for making solar a viable option, but the robustness and flexibility of these options will depend largely on where you live and what’s available for your particular situation.

Solar Investment Tax Credit

The most widely accessible is the Solar Incentive Tax Credit (ITC). The federally issued ITC has played an important role in the rapid growth of the solar industry since it was first issued in 2006, contributing to a 50% average annual growth over the past decade.

From its inception through 2019, the incentive is realized as a 30% tax credit directly associated with qualifying residential and commercial solar investments. Staring next year, the incentive begins a rapid step-down to 26% in 2020, 22% in 2021 and, in 2022, will fall to 0% for residential and 10% for commercial projects.

Solar renewable energy certificates

Around 30 states in the U.S. have renewable portfolio standards, which are state regulations requiring that a percentage of the electricity produced by utilities to be from renewable energy resources.

Utilities can meet these requirements by either directly producing electricity from a renewable energy system, like solar PV, or purchase the environmental attributes from the owner of a system that produced the renewable energy. This is done through the purchase and sale of renewable energy certificates (RECs) and solar renewable energy certificates (SRECs).

An SREC is created for every megawatt hour of electricity produced. That SREC can either be retained by the system owner or sold. If sold, the value of the SREC(s) will be based on the market value at the time the power is generated. SREC prices vary by region but tend to be more valuable than other RECs.

If you own a system that produces a significant amount of energy, selling your SRECs can yield considerable revenue. However, it should be noted that once the associated SRECs are sold, that the environmental attributes of the power produced can no longer be claimed by the system owner.

Solar tariffs

Like SRECs, solar tariffs provide revenue based on the amount of energy produced by a participating solar PV system. Often, a capacity block tariff is set to a pre-determined installation capacity and a fixed, base compensation rate is provided to qualified solar PV systems.

Many factors can determine what the base compensation rate for your qualified system will be, but that rate per kWh generated is fixed over the term of the agreement (usually 10 or 20 years depending on the size of the project). Solar tariff models are less common and SREC programs and each will vary depending on the program requirements.

Like SRECs, participating in a solar tariff program means the utility retains ownership of any renewable attributes generated by the system.


In cases where solar PV projects are behind-the-meter, net-metering may be a viable alternative or addition to other solar incentives.

Solar generation systems often produce more energy than can be used on-site at a given time and, unless paired with a battery storage system that can retain excess energy for later use, that energy needs somewhere to go.

In short, net-metering is a billing mechanism that allows solar generators to sell any unused electricity back to the grid, through their utility provider. The exported electricity is redistributed to other customers on the grid and the solar generator then receives a credit on their bill for the electricity sold.

Specific net-metering policy structures vary by region, state and even utility, so investigating available options is a good place to start.

Financing Options

Solar loan

Like other home improvement loans, solar loans are available to help transition to a solar PV system without having to front the full capital costs. Solar loans tend to have low interest rates that will vary depending on the loan term and other factors common to loan agreements.

However, solar loans are unique in that the solar PV system is an owned asset that can also leverage other incentive programs, like tax credits, net-metering and SRECs. The important part of pursuing a solar loan is to know which other incentives can be leveraged and what the best loan structure is for your financial situation.

Solar leasing

If you aren’t interested in incurring more debt or don’t have the upfront capital to purchase a system, solar leasing is an additional option. Solar leases and power purchase agreements (PPAs) allow you to benefit from the energy produced by a solar installation, without incurring all of the financial responsibility.

With a solar lease, a third-party owner installs a solar system on your property and you as the customer sign a contract agreeing to fixed monthly lease payments, over the term of the contract (usually 10 to 20 years). In return, you get access to the energy produced by the solar system. A lease allows you to reduce energy costs on your utility bills, while the third-party owner takes on any upfront and maintenance costs .

A PPA is structured similarly to a lease, with a third-party owner paying for and maintaining the system over the contract period. Rather than monthly lease payments, a PPA establishes a fixed energy rate based on solar production. The fixed rate is usually set below the utility retail rate, which results in reduced energy costs for the customer .

Once the contract period is over, both options allow for the customer to buy the solar system at fair market value. Alternatively, the contract can either be renewed or the third-party owner will remove the system.

While leases and PPAs do offer a viable alternative to other financing options, there can be drawbacks to fixed-rate contracts. Since electricity rates can fluctuate considerably, it is important to consider that your fixed rate in year one might look better or worse than the utility retail rate in five or ten years.

As a final note, leases and PPAs can employ different financing options depending on how much money is put down upfront (if any), so it is important to investigate which might be best for you in the short and long-term.

Energy Cost Savings

Regardless of which financing option is right for you or what the impact of solar incentives on overall system cost and revenue will be, energy cost savings are important to consider on their own.

If you live in a utility territory where electricity costs are high and solar PV is a viable option to help offset a portion of your electricity consumption, then the energy cost savings alone might be incentive enough.

Moreover, as electrification increases in response to expanding distributed generation and decarbonization strategies, electricity costs will also increase. Thus, while a rooftop solar PV system you’ve been considering is currently on the back burner, the future cost of energy is well worth considering now and factoring into your solar decision-making.

Solar Energy & the Environment

Now that we have the technology and cost pieces laid out, it’s worth talking about some of their impacts.

A primary driver behind solar energy is its association with positive environmental impacts, particularly when compared to conventional fuels.

Solar vs. Fossil Fuels

When comparing solar energy to conventional fossil fuel energy, there are two key distinctions that define their environmental impacts.

Firstly, solar energy is a renewable resource, in that it is naturally self-replenishing. This means that, unless something happens to our sun, we can use as much solar energy as we want and still not run out. In contrast, fossil fuels (coal, natural gas, oil, and their derivatives) are finite resources. Since fossil fuels are derived from millions of years-old organic materials buried in the earth’s crust, there is naturally a limited amount available for extraction.

Secondly, solar energy is considered a clean power source because it does not emit harmful pollutants or greenhouse gases when used to produce heat or electricity. Fossil fuel energy is considered a dirty power source, in that the fuel source itself is carbon-intensive (since it’s made of fossilized organic material) and the processes for producing heat and electricity emit harmful emissions and chemicals.

To be clear, just because solar energy itself is both renewable and clean doesn’t mean there are no negative environmental impacts associated with the solar technologies that use solar energy.

One common concern related to both the solar and fossil fuel industries relates to resource extraction. Just as fossil fuels require invasive extraction processes, solar PV panels require rare earth metals (like tellurium) to be mined in much the same way as some fossil fuels. As these resources become more scare or difficult to access, extraction processes often become more invasive and negligent.

Life cycle impacts

If weighing the environmental aspects of solar against other options seems daunting, one helpful way to look at your options is through the life cycle of a particular energy source or technology.

A life cycle analysis reviews a technology or product holistically, from the point of resource extraction all the way to its end-of-life phase. So, while the electricity produced from solar might not emit any pollutants, the process of extracting material to make the panels or the end-of-life process of discarding or recycling them might.

Going Solar

Feeling overwhelmed? That’s not a bad thing. Solar energy is an exciting prospect, but there are a lot of considerations. To make it easier, let’s recap:

Go solar!

  • Renewable: Like solar energy, the benefits of solar power are abundant and self-replenishing
  • Clean: Solar power does not produce pollutants or emissions; thus, the downstream environmental benefits out-compete conventional fuels
  • Energy cost savings: Between incentives, financing models and reduced energy consumption, the cost savings can be considerable (especially as electricity prices rise)
  • Increase property value: Considering all of the above, solar can increase the value of your home and make it more attractive to potential buyers
  • Established technology: Solar technology has matured and worked through many of the kinks associated with earlier, less efficient models. Thus, the useful life of technologies has increased and with it, decreased risk for consumers
  • Falling solar costs: While not yet at parity with grid electricity, solar costs will continue to become cheaper as more capacity is installed
  • Positive grid impacts: Distributed generation helps to reduce the overall burden on grid supply and thereby help reduce transmission and distribution losses. Moreover, solar PV systems help make the overall grid cleaner and offer opportunities for active demand reduction
  • Resilience: If paired with battery storage, can increase energy resilience to protect from power outages and extreme weather events

Go solar?

  • Dependability: While solar energy might be renewable, that doesn’t mean it’s consistent. The intermittent nature of solar, particularly if in a region that cannot rely on clear, sunny skies for most of the year, makes dependability an issue
  • Technology obsolescence: Rapid advances in solar energy technologies may be prerequisite for a burgeoning, new energy source, but this can also raise justified investment insecurities. The concern that a new technology will be replaced by a newer, more efficient (and potentially cheaper) version in five years makes for a hard sell, particularly when the life of PV systems pushes upwards of 20 years
  • Life Cycle Impacts: While solar technologies are superstars from a direct emissions perspective, a lifecycle look at their environmental impacts is less certain. From an upstream perspective, active solar technologies often require emissions-intensive extraction and manufacturing processes. Alternatively, the downstream end-of-life phase of these technologies also poses concerns around material recycling and proper disposal
  • Feasibility & functionality: The fact is, no matter how innovative or efficient solar energy systems become, they are simply not right for all use cases. Knowing when solar is right and when to seek an alternative path or technology is key
  • High capital costs: Regardless of how you cut it or what incentives are leveraged, solar is expensive if you want to own your system. Luckily, other financing options are prevalent to help alleviate this
  • Resilience: Though declining, the cost of battery storage is still inaccessibly high for most consumers
  • Low electricity costs = low savings: If you live in a region where energy costs are high, then transitioning to solar to offset all or a portion of your energy consumption can generate long-term cost savings. Conversely, regions with low energy costs might make the economic justification for solar less convincing

Getting started

All of this brings us to the ultimate question—is solar right for you?

There are a lot of factors that play into this and your answer should be well informed. Hands down, the best place to start is by educating yourself and leveraging advice from energy professionals.

Start by investigating if your city or state offers energy auditing programs that can help identify cost-effective solutions to increase the energy efficiency of your home, before you even bring up solar as an option.

If you want to get your feet wet with potential PV or thermal opportunities before asking the professionals, there are user-friendly platforms available online that can help break down the major factors influencing solar energy choices in your region.

A host of solar mapping resources is maintained on the Department of Energy’s Solar Mapping Resources Page. You can find information about solar radiance in your region, local solar installers, and projected production and energy costs for a potential system.

Another valuable resource is a database that lists the financial incentives and options for a broad range of energy technologies, including solar. The DSIRE database is updated regularly and can be easily navigated depending on region, state, technology, or incentive type.

And no matter what technologies you are interested in, be sure to ask questions and shop around.

Lastly, remember that even if you can’t integrate solar into your day-to-day, there are many other efficiency and technology options that can help to reduce costs, save energy and contribute to a clean environment. For now, we hope this has helped you get a little bit closer to making some of those decisions.

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