Solar energy: What you need to know

Find out what solar panels cost in your area in 2023
Please enter a five-digit zip code.
Your information is safe with us. Privacy Policy
Solar panels on a house

Generated from the sun, solar energy is the most abundant energy resource on Earth. Every day, we harness solar power in the form of either electric or thermal energy to power or heat homes, businesses, utilities, and more. As a renewable and emission-free energy source, solar power will play a pivotal role in the global energy future—but how does it work exactly? And what are its applications?

Find out what solar panels cost in your area in 2023
Please enter a five-digit zip code.
Your information is safe with us. Privacy Policy
Find out what solar panels cost in your area in 2023
Please enter a five-digit zip code.
  • 100% free to use, 100% online
  • Access the lowest prices from installers near you
  • Unbiased Energy Advisors ready to help

Key takeaways

  • Solar energy is energy from the sun that we capture with various technologies, including solar panels.

  • There are two main types of solar energy: photovoltaic and thermal

  • The “photovoltaic effect” is the mechanism by which solar panels harness the sun’s energy to generate electricity.

  • Want to take advantage of solar energy yourself? Join the EnergySage Marketplace to compare solar quotes for your property.

Solar energy is a clean, inexpensive, renewable power source that we can harness nearly everywhere in the world. Any point where sunlight hits the surface of the earth is a potential location to generate solar power. Renewable energy technologies generate electricity from infinite resources and since solar energy comes from the sun, it represents a limitless source of power.

Compare producing electricity with renewable resources to fossil fuels: It took hundreds of thousands of years for oil, gas, and coal to form. Every time we burn one of those resources to create electricity (and emissions!), that finite resource moves marginally closer to depletion. Using a renewable resource—such as wind, solar, and hydropower—to generate electricity does not deplete that resource. There will always be consistent sunlight shining on Earth's surface, and after turning sunlight into electricity, there is still an infinite amount of sunlight to turn into electricity in the future. That is what makes solar power, by nature, renewable energy.

While the current electricity mix in the United States is still largely comprised of fossil fuels like oil and gas, renewable energy sources like solar are steadily becoming a larger part of the country's energy profile as the cost becomes more competitive.

The sun does more for our planet than just provide light during the daytime: Each particle of sunlight (called a photon) that reaches Earth’s surface contains energy that fuels our planet. Solar energy is ultimately responsible for all of our weather systems and energy sources on Earth, and enough solar radiation hits the surface of the planet each hour to theoretically fill our global energy needs for nearly an entire year.

So where does all of this energy come from? Our sun, like any star in the galaxy, is basically a massive nuclear reactor. Deep in the Sun’s core, nuclear fusion reactions produce huge amounts of energy that radiate outward from the sun’s surface and into space in the form of light and heat.

On Earth, we harness and convert solar power from the sun into usable energy using photovoltaics or solar thermal collectors. Although solar energy only accounts for a small amount of overall global energy use, the falling cost of installing solar panels means that more people in more locations can take advantage of solar energy.

In 1954, Bell Labs developed the first silicon photovoltaic cell, beginning the use of solar power. While scientists had previously captured and converted solar energy into usable energy through various methods, only after 1954 did solar power begin to become a viable source of electricity to power devices over extended periods. The first solar cells converted solar radiation to electricity at an efficiency of 4%. For reference, many widely available solar panels today can convert sunlight to solar power at above 20% efficiency, a number constantly on the rise. 

Although solar energy adoption was slow at first, several state and federal incentives and policies lowered the cost of solar enough to drive wide adoption of solar power. Solar is now one of the fastest-growing and cheapest sources of power in the world and will continue to spread rapidly in the coming years as solar technology continues to improve. We can expect more solar power to enter the mix of large-scale power stations, helping reduce our country’s greenhouse gas emissions and combat climate change.

Learn more about the history of solar panels.

Today, many solar energy technologies harness the sun’s energy. The two main ways to use energy from the sun are photovoltaics and solar thermal capture. Solar photovoltaic systems are common for smaller-scale electricity projects (like home solar panel installations), while solar thermal capture is typically only used for electricity production on massive scales in utility solar installations. In addition to producing electricity, lower temperature variations of solar thermal projects can heat indoor spaces or fluids.

A common way to take advantage of solar energy is with a photovoltaic (PV) solar system. With a solar PV system, your solar panels (also called solar modules) convert sunlight into electricity that you can use immediately, store in a solar battery, or send to the electric grid for credits on your electric bill through net metering (depending on where you live).

How do solar panels work?

Solar panels convert solar energy into usable electricity through a process known as the photovoltaic effect. The photovoltaic effect is a property of specific materials called semiconductors (nonmetals with conductive properties) that enables them to create an electric current when exposed to sunlight. 

Solar panels consist of a layer of silicon cells, a metal frame, a glass casing unit, and wiring to transfer electric current from the silicon. Silicon is a semiconductor: When incoming sunlight strikes the silicon solar cells, it knocks electrons loose, setting them in motion and creating a flow of electric current. Wires then capture this direct current (DC) electricity and feed it to a solar inverter, which converts it to alternating current (AC) electricity, the type of electricity used by most of the U.S. electric grid and household appliances.

Types of photovoltaic energy systems

Solar panels are installed at three main scales: residential, commercial, and utility. As a homeowner, you can take advantage of residential-scale solar, typically in the form of rooftop solar or ground-mounted solar installed on open land. Generally, residential solar panel systems are between 5 and 20 kilowatts (kW), depending on the size of your home.

Commercial solar energy projects are typically installed at a greater scale than residential solar. While individual installations can vary greatly in size and cost, commercial-scale solar arrays serve a consistent purpose: They provide on-site solar power to businesses and nonprofits.

Finally, utility-scale solar projects are typically large-scale solar power plants that are several megawatts (MW) in size. Utility-scale solar installations provide solar energy to a large number of utility customers and may lower electricity costs in the future, but don’t currently provide any direct bill savings.

If you can’t install solar on your home or business, you can still save with community solar. Developers typically build community solar farms in central locations so they can provide power to multiple properties. As a subscriber, you’ll support the development of clean energy in your community and save between 5-20% on annual electricity costs.

A second way to use solar energy is to capture the heat from solar radiation directly and use that heat as solar thermal energy. Solar thermal energy has a broader range of uses than a photovoltaic system, but using it for electricity generation at small scales isn’t as practical as using photovoltaics.

There are three general types of solar thermal energy: low-temperature used for heating and cooling, mid-temperature used for heating water, and high-temperature used for electrical power generation.


Low-temperature solar thermal energy systems involve heating and cooling air as a means of climate control, such as in passive solar building design. In properties built for passive solar energy use, the sun’s rays are allowed into a living space to heat an area and blocked when the area needs to be cooled.


Mid-temperature solar thermal energy systems include solar hot water heating systems. In a solar hot water setup, collectors on your roof capture heat from the sun. They then transfer this heat to the water running through your home’s pipes so you don’t have to rely on traditional water heating methods, such as water heaters powered with oil or gas.


High-temperature solar thermal energy systems use concentrated solar power (CSP) to generate electricity on a larger scale. In a solar thermal electricity plant, mirrors focus the sun’s rays on tubes containing a liquid that can hold heat energy well. This heated fluid evaporates water into steam, which then turns a turbine and generates electricity: all using concentrated sunlight!

According to the Solar Energy Industries Association (SEIA), solar capacity grew about 24% annually over the past decade. The Department of Energy (DOE) reports that the United States has about 110.1 gigawatts (GW) of installed solar power capacity to date—enough to provide clean energy to about 20 million homes.

As solar capacity continues to grow, so too does the need for new solar jobs. From installing to manufacturing to performing operations and maintenance to educating consumers, there are many things you could be doing as a solar industry employee! As of December 2021, the solar industry supported 255,037 jobs based on data from the Interstate Renewable Energy Council (IREC)’s National Solar Jobs Census: a 9.2% increase from 2020.

The rapid development of solar power nationwide and globally has also led to parallel growth in several adjacent areas. Solar battery systems, electric vehicles, and heat pumps are all sectors likely to explode, amplifying the benefits of solar.

There’s a lot to learn about solar energy, so here are a few quick answers to common questions:

How does solar energy work?

Solar production starts when solar panels absorb particles of light with photovoltaic cells, generating this DC electricity. This DC electricity flows through inverters, which convert it to usable AC electricity, which flows through your home’s electrical panel.

What is solar power used for?

Solar power is used in two main ways: generating electricity (like with rooftop solar panels) or generating thermal energy (like with concentrated solar power plants). For most homeowners, solar panels that convert solar energy to electricity are the best use of solar energy because it allows them to save on electric bills.

How long do solar panels last?

Solar panels usually last for 25 to 30 years before they start to see steeper drops in performance than is useful for many homes. For those almost three decades, you’ll generate free solar electricity from the sun.

The percentage of renewable energy (including solar) in your utility’s energy mix continues to increase, but significant advancements won’t happen overnight. In the meantime, you can support the development of solar farms in your community and lower your carbon footprint by switching your electricity generation source to solar power! Whether you install solar panels on your home or business or subscribe to a community solar farm, you’ll add to the total capacity of installed solar energy, while helping grow the clean energy economy. 

To find the right solar energy system for the right price, check out the EnergySage Marketplace. After signing up, you can compare multiple free solar quotes from qualified, pre-vetted solar companies near you so you can go solar with confidence.

Find out what solar panels cost in your area in 2023
Please enter a five-digit zip code.
Your information is safe with us. Privacy Policy
Find out what solar panels cost in your area in 2023
Please enter a five-digit zip code.
  • 100% free to use, 100% online
  • Access the lowest prices from installers near you
  • Unbiased Energy Advisors ready to help
Back to the top
Did you find this page helpful?
Discover whole-home electrification
Home solar
House with rooftop solar panels

Create your own clean energy with solar panels.

Community solar
Solar farm

Enjoy the benefits of solar without rooftop panels.

Heating & cooling
Heat pump

Explore heat pumps, the latest in clean heating & cooling technology.

Don't overpay for solar

Compare local quotes and save 20% or more.

Please enter a five-digit zip code.
Your information is safe with us. Privacy Policy

See solar prices near you.

Enter your zip code to find out what typical solar installations cost in your neighborhood.

Please enter a five-digit zip code.