How does a Solar PV (Photovoltaic) System work?
Updated September 2026.
First, Solar panels installed on the roof or elsewhere convert sunlight into electricity. How?
Ideally, you’ll want a south-facing roof (east and west also work, with somewhat less output) that is not shaded by trees or other obstructions. We have a device (called a Solar Pathfinder) that can tell if shade is present on your roof at any time of the year.
Homeowners considering solar installations may also want to explore available state solar tax credits and incentives. Note that the federal 30% credit ended for home systems installed after 2025.
This power from the solar panels, generated as Direct Current, is sent to an inverter.
An inverter has several jobs.
1 – It converts the Direct Current from the solar panels into Alternating Current, which your household appliances use.
(Some systems, such as ‘off-grid’ systems in houses that are too remote for the utility to reach, do not need an inverter because all their devices run on direct current). RVs and boats often have direct current devices, too.
2 – It matches the alternating current to the alternating current (AC) from the utility grid. Inverters must meet exacting standards to be approved for use. The California Energy Commission keeps a widely used list of approved inverters.
3 – The inverter sends the electricity to the main circuit breaker panel in the house. From there, the electricity can be used in the house to run appliances; if more electricity is generated than is used, the excess returns to the utility grid. Under net metering this spins your meter backward, effectively selling power back to the utility. Many utilities now pay less for exported power than they charge you, so check your local rules: see Net Metering Laws in the US.
4 – The inverter ‘watches’ the utility grid so that it can shut down immediately if the utility grid shuts down. This way, if a storm or accident breaks an overhead electrical wire, your solar system will not send power into the electrical system and endanger people. A solar system will only keep your lights on during a power failure if you have batteries and the right switching equipment.
What’s changed since this was written
- Bigger panels: a typical home panel is now 400 watts or more, roughly double what was common in 2010.
- Microinverters and optimizers: many systems now put a small inverter or optimizer on each panel instead of one central inverter, so shade on one panel doesn’t drag down the rest.
- Rapid shutdown: the electrical code now requires rooftop systems to de-energize quickly for firefighters’ safety.
- Batteries: home batteries are now common, especially where utilities pay little for exported power.
More: How Solar Works and Solar Powered Homes in 2026. Background: US Department of Energy, Homeowner’s Guide to Going Solar.
