Understanding the Basics of Solar Power

Solar power is a rapidly growing industry, with more than 2 million homeowners in the United States already harnessing the sun’s energy. This comprehensive guide will walk you through the basics of solar power, from understanding what solar panels are, how they work and the financial benefits they can bring for California homeowners.

What is Solar Power?

Solar power is the conversion of sunlight into electricity to power your home, typically using photovoltaic (PV) cells in solar panels. These cells are made of semiconductor materials, like silicon, that absorb sunlight. The energy absorbed from the sun causes electrons in the cells to move, which creates a flow of electricity. This electricity is then converted into a usable form by a device called an inverter to power everything in your home – from your lights and refrigerator to charging your electric vehicle.

The Components of a Solar Power System

A typical solar power system consists of solar panels, an inverter, and sometimes a solar battery. The panels absorb sunlight and convert it into direct current (DC) electricity. The inverter then converts this DC electricity into alternating current (AC) electricity, which is the type used in your home.

If your system includes a solar battery, it will store any excess electricity produced by your panels for later use. This can be particularly useful during power outages or during peak usage times when the demand for electricity is high.

How Do Solar Panels Work?

A solar panel, also referred to as a solar module, is composed of a layer of silicon cells, a metal frame, a glass casing, and wiring that facilitates the transfer of electric current from the silicon. Silicon is a nonmetal with conductive properties that enable it to absorb and transform sunlight into electricity that can be used. When sunlight strikes a silicon cell, it sets the electrons in the silicon in motion, triggering a flow of electric current. This phenomenon is known as the “photovoltaic effect,” and outlines the basic operation of solar panel technology.

The science behind solar panel electricity generation is fundamentally rooted in this photovoltaic (PV) effect. First identified in 1839 by Edmond Becquerel, it can be considered a characteristic of certain materials (termed semiconductors) that enables them to produce an electric current after exposure to sunlight.

Here’s how the photovoltaic (PV) process works in stages:

  1. Solar radiation is absorbed by the silicon photovoltaic solar cell
  2. When the rays of the sun interact with the silicon cell, electrons move and generate a flow of electric current
  3. This direct current (DC) electricity is captured by wires and channeled to a solar inverter where it’s converted to alternating current (AC) electricity

Types of Solar Systems

There are three main types of solar systems you can install in your home:

  1. Grid-Tied Systems: These are the most common and cheapest type of solar system. They’re connected to the local utility grid and can feed excess power back to the grid. However, they don’t provide power during a grid outage for safety reasons.
  2. Hybrid Systems: These systems are also connected to the grid but include a solar home battery for energy storage. This means they can provide power during a grid outage.
  3. Off-Grid Systems: These systems are not connected to the grid and rely entirely on solar power and battery storage. They’re more common in remote areas where grid connection isn’t feasible.

The Cost of Solar Energy

In line with the rise in solar efficiency, the price of solar panels has seen a significant reduction. Over the past 10 years, the cost of installing a solar panel system has dropped by more than 70% and many industry professionals anticipate that prices will continue to decrease in the future.

Moreover, depending on your location, various rebates or incentives for solar power can reduce the cost of solar energy even more. On a national level, the federal Solar Investment Tax Credit (ITC) is one of the main incentives available and allows you to deduct 30% of the cost of installing a solar energy system from your federal taxes.

In 2023, the average residential solar panel installation cost is between $17,430 to $23,870 after claiming the 30% federal solar tax credit. This works out to less than $3.00 per watt installed on average (about $2.95/W in 2023), making solar power an increasingly affordable option for homeowners.

However, this incentive isn’t permanent: in 2033, the federal ITC will decrease to 26% and it will be completely phased out for residential solar installations by 2035. Many states and utilities offer additional incentives (such as net metering) on top of the federal ITC, which further reduces the cost of solar power.

What Impacts the Cost of Solar Panels?

There are many factors that go into the quote solar companies give you. Solar installations are unique because the cost is heavily influenced by your situation and factors related to your energy consumption and property.

Here are some important factors to consider that will affect the final cost of your solar panel system:

System Size: The larger your solar panel system, the more expensive it will be. Notably, the average per-unit price for solar decreases as the system size increases.

Location Factors: The cost of solar panels can also fluctuate depending on your state due to local pricing trends and the average size of solar systems installed. Naturally, states where larger systems are the norm will typically have a lower average solar cost.

Brand and Quality of Panels: Just as with any goods or appliances, the quality of solar panels can differ significantly, often hinging on the brand. Higher quality brands and products means higher prices.

Panel Type: There are different types of panels (including polycrystalline, monocrystalline, or thin-film) that have a direct impact on the quality of your solar installation.

Roof Characteristics: Solar panel installation costs don’t just come from the equipment. The complexity of the solar installation and having a complex roof might also increase your system cost.

Labor Costs: The labor rates charged by solar providers can vary. You might opt to invest more for a provider with a stellar reputation, positive reviews, and a quicker installation process.

Permitting and Interconnection: Even though it’s not a major factor, paying for permits and your interconnection fee to the grid will add to the overall price of your solar installation.

The Financial Benefits of Solar Power

One of the main reasons homeowners switch to solar power is the potential for financial savings. In many cases, the cost of solar energy is less than what you would pay your utility company for electricity.

For example, if you use 1,000 kWh per month billed at 12 cents per kilowatt hour (kWh), your power bill would be $120 every month, or $1,440 annually. If you installed a solar power system that covers 100% of this energy usage, that’s $1,440 you could save every year. Over the 25-year warranty period of most solar panels, this could add up to significant savings.

Moreover, solar panels can increase the value of your home. According to a study by Zillow, homes with solar panels sell for nearly 4% more than comparable homes without solar.

Solar Panels, Home Batteries and Power Outages

A common misconception is that solar panels will keep your lights on during a power outage. Unfortunately, unless you have a solar battery as part of your system, this isn’t the case.

For the safety of utility workers who may be fixing power lines during a grid outage, solar power systems are designed to automatically disconnect and cease operation. If you live in California, you may also have experienced PG&E’s Public Safety Power Shutoffs (PSPS) where power is intentionally cut off to certain areas to reduce the risk of wildfires. However, if you have a solar battery, it can store excess energy produced by your panels for use during these outages.

Solar batteries serve as your personal reservoir of green energy, capturing the excess power your solar panels generate so it’s available when you need it the most. Rather than feeding your extra energy back into the grid via net metering, it’s channeled into your backup battery to use during times when the sun isn’t shining, like at night or on overcast days.

The installation of home solar batteries typically adds a substantial amount to the overall cost of a solar installation, usually falling in the range of $10,000 to $20,000. However, certain rebates exist that can significantly reduce the cost of incorporating batteries into your home solar system.

Is Solar Power Right for You?

Solar power isn’t a one-size-fits-all solution. The benefits of solar power can vary greatly depending on your location, your energy usage, and your local utility rates. However, with the falling cost of solar panels, the increasing availability of financial incentives, and the rising cost of electricity, solar power has become an increasingly viable option for many homeowners.

Start Your Solar Journey with Solar Technologies

Embracing solar power is like welcoming a ray of sunshine into your life. It’s a choice that illuminates your home, lightens your electricity bills, and brightens the future of our planet.

If you’re ready to explore the benefits of solar for your home, our Bay Area team has more than 25 years of experience in designing and installing the right size of home solar system to reduce your monthly energy bills. Schedule an online appointment today to learn more.


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