How A Solar Power System Works

When looking for better ways to power your home it’s normal to consider solar power and wonder how does a solar power system work. I know that I had a lot of questions about these systems and wanted to make sure that if I chose one for my home and family that I was making a good choice. By doing plenty of research and learning as much as I could, I was able to figure out that these systems are a great option for a lot of people, including myself.

What is Solar Energy?

Solar energy is energy that is released from the sun and then, through the use of solar power systems, converted into useable energy that you can use to power your home or your business. Radiant energy that is released by the sun can be captured by solar panels that you install and then can be converted into electricity, allowing you to decrease or completely remove your dependence on the electrical company to provide you with the energy you need to run appliances in your home.

Who Can Use Solar Energy?

Anyone who wants to decrease the amount of money that they are spending on their electrical bill each month and become more independent should consider installing a solar energy system at their home. While anyone can have one of these systems, there are a few people who are going to benefit from them most.

If you are paying a lot for electricity, then it’s a good idea for you to consider solar power, as this can be a great way to help you lower your bills. Of course you have to consider how much you will be paying for your new system, but it is possible to quickly make up for the cost of installing a new solar power system.

If you live in an area where you have access to very low-cost electricity, then you may not benefit as much from installing a new solar power system. This is especially true for homeowners who live near hydro-electric dams and don’t have to pay a lot for their electricity.

However, if you live in a remote area, have a location where your panels will get a lot of sun during the day, and are tired of overpaying for electricity, then I think that it’s a good idea to consider installing a solar energy system at your home.

Due to widespread power outages from natural disasters, blackouts, and total grid down possibilities, many seek the comfort of having a solar power system ready to handle their electrical needs.

Solar Energy Benefits

Everyone has their own personal reasons for choosing solar power for their homes. In fact, there are a ton of great benefits that you can enjoy when you opt for solar energy.

  1. Reduce your electricity bill
  2. Protection against rising utility costs
  3. Return on investment
  4. Environmental advantages
  5. Increased home value
  6. Reliable energy

Reduce Your Electricity Bills

This is probably the main reason why most people become interested in solar power systems. Even if you are not able to produce all of the energy that you need to run your home, you can easily offset your monthly bills by a significant amount with even a modest solar power system.

Protection Against Rising Costs

Utility prices are constantly increasing, but installing a solar power system at your home is a great way to hedge the rising prices. You can easily fix how much you’re paying for energy and not have to worry about huge price fluctuations in the future.

Return on Investment

It’s time to consider your new solar power system as an investment, which it is. Once you have paid off your system you will enjoy a great ROI each month.

Environmental Advatages

Solar power is much better for the environment than traditional energy sources. Using solar power at your home is a wonderful way to reduce your family’s carbon footprint.

Increased Home Value

Every homeowner is always looking for ways to increase the value of their home, and a solar power system is a wonderful way to do this. No matter if you want to sell your home in the near future or not, installing a solar power system will raise your home’s value.

Reliable Energy

Everyone knows that the sun is going to rise in the morning and set in the evening, and you can take advantage of its reliability when you opt for solar power. Other methods for creating energy aren’t sustainable in the long term, but you can always depend on the sun. This is particularly important in the event of extended power grid outages.

How Does A Solar Power System Work and Produce Energy?

I find that most solar power systems have the panels placed on the roof of a home where they can get the most possible sun during the day. You do not want them to be in the shade, as this will greatly decrease how much power you are able to produce.

Light from the sun is made up of photons, and when these photons hit the solar panels, they hit the photovoltaic cells that the panels are made up of. These silicon cells are able to transform sunlight into electricity instead of allowing it to stay as heat. When photons hit the silicon, electrons are removed from the silicon. These electrons create an electric voltage.

Once this voltage is created, it can be channeled and collected into a current that passes through wiring. There are often many different photovoltaic arrays that are formed by these wires, but they will all end in a fused array combiner, which is an electrical box.

This box has fuses that keep the cables from being damaged and help to pass power through to the inverter, whose job it is to turn the direct current power from the panels into alternating current that can be used in your home.

There have been recent advancements with solar power. Scientists have been able to produce very thin and flexible cells that are incredibly light and thin. They are able to produce just as much energy as thicker and heavier cells, but won’t take up as much space or create as much weight when they are installed.

What Type and Sizes of Solar Power Systems and What Can be Powered by Them?

There are two main types of solar power systems that you can choose from.

  • Grid tied systems
  • Off grid systems

Grid-tied solar power systems will have you remain connected to your electrical utility and to the power main. You can easily power anything in your home with these systems, but if there is a power outage in your area, then you will experience a blackout.

You can choose to install only a few panels if you want to simply offset your electrical bill, or install enough to run all of your appliances.

Off-grid systems, on the other hand, won’t have any connection to the grid and you won’t ever have to worry about dealing with your electrical company. These systems require you to have batteries on hand to ensure that you will have power, even when you do not have sunlight.

While these batteries can be very large and are able to store a lot of power, they may not be able to hold all of the power that you need. This means that before you invest in this type of system, you need to figure out how much power you will have to have to ensure that they can power all of your appliances, even during cloudy weather.

Solar Power System Components

When you install a solar power system at your home, on your RV, or simply buy a portable system, you will be able to convert energy from the sun into useable electricity. This electricity can be used in your home, you can store it in a battery, or you can even opt to return it to the grid. Understanding the components of a solar power system will help you better understand how they work and how the components all function.

RV systems generally come with a different setup than a permanent system that you would install at your home. Not only do they need panels, charge controllers, and inverters, as well as a special mounting system, but they also require storage. Many solar panels for RVs are flexible and incredibly thin so that they can be mounted to the roof of the RV without breaking and won’t add much weight.

It’s important that you have a durable and powerful battery that you can use to store the energy that you are able to create when you’re on the road. There are a few different configurations that you can choose from, including lithium ion batteries, lead-acid batteries, or golf-cart-style batteries. The type of batteries and how you set them up will depend on how much energy you want to store, as well as how much room you have.

Portable systems are going to be much smaller than home or RV systems, which will allow you to easily move them from one location to another. You still need to have panels, charge controllers, inverters, a portable mount, and batteries, but they are going to be lighter and easier to move. When buying a kit for a portable system or putting one together yourself, you need to take into consideration how easily you will be able to transport everything.

For a portable system you will want to opt for very light solar panels that can be easily moved. They also need to be smaller than traditional panels and thinner.

Solar Panels

Panels are the large, flat parts of your solar power system that face the sun and collect the energy from the sun to convert it into electricity. They are a major part of any solar power system and will play a huge role in how successful you are at collecting energy from the sun.

There are two main types of solar panels. Poly-crystalline panels are generally less efficient and less expensive than mono-crystalline panels. This is why it’s so important to understand what you are buying when you install a new system at your home.


You also need an inverter for your solar power system to be able to work. Once the panels collect energy from the sun and convert it into direct current, you will rely on your inverter to change that DC current into alternating, or AC current. That’s because most homes and businesses use AC electricity, not DC.

You can choose from three different types of inverters for your solar power system:

  1. String or centralized
  2. Micro
  3. Power optimizers

String inverters connect all of your solar panels to your home’s electrical pane. They are not expensive, which makes them a great option if you are on a budget, but if one panel stops working for any reason, then your whole system can stop.

Micro-inverters will be installed at each solar panel, which allows you to maximize production. They are more expensive than string inverters, but the whole system won’t stop working if you have a problem with shade or a panel failing.

Finally, power optimizers are a blend of both string and micro inverters. They are a great middle of the road option and work well to condition DC power before moving it to another inverter.

Racking and Mounting Systems

Nobody thinks that the mounting systems for solar panels are very glamorous, but they are incredibly important. These systems are used to hold your solar panels in place and to put them at the best angle so that they can catch as much light as possible from the sun.

You can opt for fixed mounts, where the panels will stay stationary throughout the day, and track mounts, which make it easy for your panels to move with the sun so they can collect as much energy as possible. These mounts are only available for use on the ground, but I like that they can increase your electricity production.

Portable mounts are great if you are going to be taking your solar panel system with you. I recommend that you look for one with wheels to make moving your panels and battery as simple as possible.

Performance Monitoring Systems

These systems give you all of the information that you need about how your solar panel system is functioning. Monitoring systems allow you to easily see how much electricity you are making per hour. You can choose from onsite or remote monitoring systems.

Onsite monitoring systems are located on your property, while remote systems rely on transmitted information from your panels to a monitoring system. You can then access information about your system and its performance via your smartphone or internet.


There are many different types of batteries that you can use to store energy from your solar power system. You need to consider a few features when shopping for the best battery for your needs.

The capacity tells you how much power a battery can store, and the power will tell you how much electricity you can expect from your battery at any given point. Also, make sure that you consider the depth of discharge, as using all of your battery’s charge will greatly shorten its life. The depth of discharge refers to how much energy you can use before you need to recharge the battery.

Consider the life and warranty of your battery, as well as the round-trip efficiency to tell not only how much energy it will take to store the energy you need, but also how long the battery should generally last before needing to be replaced.

Average Cost of Each Type of Solar System

Before you can determine how much a solar system will cost, you need to decide what type you will have. Off-grid, grid-tied, and grid-tied with a backup battery will all have a different price. Make sure that you know not only what kind of system you want, but also how much power you need so that you choose the right size system.

Costs have dropped in recent years, with a 4kW average solar system costing around $15,000. Larger systems that have 8kW generally cost closer to $29,000.

While the installed cost of solar panels can vary, it generally runs around seven to nine dollars for each watt. Remember that there are many electrical companies that will offer incentives for their customers to install solar systems, and some will even subsidize part of the installation costs.

Using an online calculator to determine your electricity use is a great way to tell what system is right for you and to help you determine how long it will be before your new solar panel system starts paying for itself.


Solar power systems are a great option for any homeowner who is looking to reduce their need for traditional electrical sources. They are also integral for those preparing for a grid down situation. When you take the time to familiarize yourself with the various components, as well as the system options, finding the best system for your needs is much easier than many realize. With your solar power system you will enjoy lower monthly utility costs, reduced reliance on traditional energy sources, and the peace of mind that you and your family will have the energy you need in a grid down scenario.

Does Solar Increase Home Value? The Latest Data for Solar Clients

Selling a solar PV system is not always easy. Prospective solar customers have concerns about everything from ROI and how to finance it to how it will affect the aesthetics of their house. And they’ll likely want to know what having a PV system will do to the value of their home–now and in the future if they want to sell.

The more specific you and your sales team can be about the benefits of installing solar, the better. A number of studies provide compelling data about how solar increases home value. This information can go a long way towards helping a prospect feel confident making the leap.

In today’s article, we highlight some facts about how solar affects home value–and the studies behind them–that your clients will want to know.

Their House Will Sell for More

Lawrence Berkeley National Laboratory (LBNL) conducted a report that definitively showed that homes with solar sold for more than houses without it. The 2015 study, Selling Into the Sun: Price Premium Analysis of a Multi-state Dataset Of Solar Homes, analyzed 22,000 home sales in 8 states, 4,000 of which included PV systems, from 2002 to 2013.

The study found that each watt of solar added an average of $4 to the home’s value in California and an average of $3 per watt elsewhere. This amounted to an average increase to the home’s selling price of $20,000 in California ($4 x 5,000W for the average system size) and $15,000 outside California ($3 x 5,000W).

Another study, An Analysis of Solar Home Paired Sales Across Six States, published in the Appraisal Journal–the nation’s largest professional association of real estate appraisers–found similar results. Their examination of sales of homes with solar systems in six states from 2010 to 2014 found that properties with PV systems sold at a premium in all of the markets.

The average premium was $14,329 per home, which was 3.74% of the average sale price. They did find that the premium as a percentage of the property’s selling price was very dependent on the size of solar system and the home’s price range. Another point was that the multiple listing system (MLS) that posted the house had to include information on the PV system to factor into the value of the home during an appraisal.

Their House Will Sell Faster

An earlier study by the National Renewable Energy Laboratory (NREL) looking at high-performance homes in California found that homes with PV systems sold 20% faster (and for 17% more) across several subdivisions built by different California builders. Their study of several hundred home sales also revealed that if a solar system was already installed and factored into the price, buyers were more likely to choose that house over others without solar. Some other interesting findings include: the aesthetics of a PV system were not identified as an obstacle to purchasing and the resale value was not damaged by the presence of a solar system.

They’ll Likely Recoup the Cost of the System When They Sell

The $15,000-20,000 addition to the selling price found in the LBNL study Selling Into the Sun (cited above) is similar to the typical cost of the average rooftop solar system. Given that the average cost of a new 6kW PV system is between $16,260 and $21,420 (before the 30% federal Investment Tax Credit), it is a pretty good bet that the homeowner will make back the money from their initial investment in the resale.

Other Considerations

There are many factors that could influence the extent to which a PV system adds value to a home. Here are few considerations your customer may want to be aware of when considering the increased home value solar may provide.

Regional Markets and Electricity Costs Matter

One factor to keep in mind is that the largest increases to the value of a property may tend to come in regions with high electricity rates and strong solar incentive programs. High energy costs can make a home with a PV system more sellable. For instance, Long Island’s high energy rates have been a boon for the solar market there; the area is home to about 40% of all solar systems in New York. Gerard O’Connor, a local appraiser, stated that buyers are “certainly willing to pay more” for a home where high electricity prices increase the savings from PV systems.

And higher energy costs can mean higher home value for homes with solar during the appraisal process. When appraisers consider the role of a PV system in the calculation of a home’s value, electricity produced by the system can be considered income, whether due to savings or from utility production credits, as noted in appraisal guidelines for green and high-performance properties from the Appraisal Foundation (see p. 36-38).

Ensuring PV Is Factored Into Home Value

Lenders, real estate agents, and appraisers should account for the value added by a solar system–and some may not know to do this (so your customer should point it out). The Federal Housing Authority (FHA) and Fannie Mae both have guidelinesfor valuing the system during appraisal. Sandia National Laboratories has a free tool designed to help real estate appraisers and others calculate the value of a new or existing PV system.

(Note: If you want to help your customer understand some of the metrics used to quantify the value of a home solar system (property value aside), our blog post on the topic is a good place to start. Plus, Aurora’s financial analysis tools are able to calculate all of these metrics easily, including payback period and projected cash flows over the life of the system, so you can easily communicate that value in your sales proposals.)

Most Data Focuses on Owned PV Systems

Much of the research to date, including the LBNL and Appraisal Journal studies discussed here, focus on homes where the PV system is owned by the homeowners–not third-party owned systems financed with PPAs and leases. The authors of the LBNL study recommend more research into the impact of leased systems on home value. Also, leased systems or ones paid through a PPA will not be included in an FHA or Fannie Mae appraisal.

Beyond the need for more data on how third-party owned PV systems affect home resale value, these types of systems present their own unique complexities in the home sale, such as the need to transfer a PPA or lease to the buyer.

System Size and Age

One factor found to affect resale value was PV system size. The Appraisal Journal study found that the premium as a percentage of the property’s selling price was very dependent on the size of solar system, and the LBNL study also found value corresponded to the capacity (W) of the PV system.

Another influencing factor in the extent to which solar increases home value might be the age of the system when the home is sold. The LBNL study notes that the depreciation of aging solar systems may decrease the value added to the home during appraisal. However, as the study authors note, exactly how system age impacts the numbers is unclear because there has been little research about it given the immaturity of the American solar market.

Adding a PV system is a significant decision for any homeowner; it requires careful consideration about the pros and cons and a good amount of trust in the contractor they work with. Being prepared to provide research-backed information about the benefits of solar, including the value it can add to the home, will help build trust with prospects and keep customers, both past and present, glad that they chose to work with you.

Note: For those looking to further explore the research on this topic, this Field Guide to Solar PV Energy Features, compiled by a co-author of both the LBNL and Appraisal Journal studies, is an excellent starting point for further reading.

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