How Do Solar Panels Work? Complete Guide (2026)

Solar cells are made of semiconductor materials, typically silicon, arranged in layers with positive and negative charges. When photons from sunlight strike these cells, they knock electrons loose from their atoms, creating an electrical current. This direct current (DC) flows through wiring to an inverter.

Your home runs on alternating current (AC), but solar panels produce direct current (DC). Inverters convert DC to AC power, making it compatible with your appliances and the electrical grid. String inverters handle an entire array, while microinverters optimize each panel individually.

Most residential solar installations are grid-tied, meaning they remain connected to the utility grid. Excess power flows to the grid for credits, and you draw from the grid at night. Off-grid systems use battery storage to operate independently but cost significantly more.

A typical residential panel produces 300-400 watts under ideal conditions. A 6kW system with 15-20 panels generates approximately 7,000-9,000 kWh annually, enough to offset most household electricity consumption. Production varies based on location, roof orientation, and shading.

Modern panels convert 18-22% of sunlight into electricity. Premium models from SunPower and REC achieve up to 22.8% efficiency. Panels degrade approximately 0.5% per year, meaning after 25 years they still produce about 87% of their original output.