How Solar Panels Work? A Step-by-Step Guide

Published: February 20, 2025
Solar panel installation in housing society

The global solar energy market surges towards a projected value of $436.36 billion by 2032, with a 6% CAGR, as per the sources. There has been a tremendous technological advancement in solar panels. Ten years ago the average solar panel was roughly 13% efficiency; now we are seeing efficiencies of up to 22-23%. With such progress, understanding how solar panels work step by step has become essential for societies considering solar adoption.  

Continue reading to learn more about the science behind solar panels, their components and how you can get a Solar Panel for Housing Society With Zero Installation Cost from NoBrokerHood.

What is Solar Energy? 

Solar energy is the energy found in the sunlight that arrives at Earth in the form of a particle called a ‘photon’. Solar panels convert light (photons) into electricity. The sunlight hits the solar panel, and photons are absorbed into the solar cells in a photovoltaic (PV) panel and spat out the electrons from the atoms in the solar cells. The movement of electrons creates direct current (DC). Solar energy is a key essential component of solar panels. 

What is a Solar Panel?

A solar panel is a device that collects sunlight and turns it into electricity. It can be used to power small devices to larger machines, or buildings depending on the size and capacity of the panel. The basic concept of how do home solar panels work is within photovoltaic cells to capture light and generate electricity, thereby providing clean energy for the home!

What are the Key Parts of Solar Panels?

To understand how are solar panels made step by step, here are the core parts:

Component Description
Solar CellsSolar photovoltaic cells are the heart of the solar panel, formed from silicon.
Front Sheet GlassSolar glass has an anti-reflective (AR) coating and is a particular type of solar-grade glass.
EncapsulantProtects the actual solar panel from environmental conditions.
Back SheetA type of insulation that protects the internal components.
Aluminium FrameProvides the structural strength to the solar panel.
Junction BoxProvides safe connection from the solar panel to the rest of the electrical system.
Silicon GlueHeat resistant synthetic material that is an adhesive or sealant.
Bus BarIt carries the DC electricity generated by the solar cells to the solar inverter.

The Work of a Solar Panel: Step by Step

Here’s how solar panels work step by step to generate electricity:

Step 1: Solar Panels Capture Sunlight and Convert it into DC

The process of how solar panels work begins when the solar panels incorporate photovoltaic (PV) cells which absorb sunlight. These cells typically have Silicon, a semiconductor material that activates when hit by photons (particles of light). 

As the photons strike the solar cells, they dislodge electrons, creating an electric current. This current is in the form of direct current (DC) electricity. The more sunlight the panel receives, the more electricity it can generate. However, the optimum temperature at which solar panels generate maximum electricity is 25 degrees Celsius. You must strategically place the solar panels to maximise sun exposure, which boosts the overall energy output.

Step Two:  Solar Inverts (Convert DC electricity to AC electricity)

Electricity produced by solar panels is in direct current (DC), while appliances in your home run on alternating current (AC) electricity.  That’s where the solar inverter comes into play! An inverter takes the DC electricity and converts it into usable AC electricity for your electrical system in your home or commercial building. 

Modern inverters also monitor how the solar system is performing, so you can ensure you are producing energy optimally.  It’s also how you report faults in the solar panels. 

Step Three:  Electrical Panel (distributes the AC electricity so it can be used) 

When the DC electricity is converted to AC electricity, it is sent to your electrical panel or breaker box. The electrical panel allows the AC electricity to be distributed to different parts of your home or business. Your lights, appliances, and devices need electricity in order to have power of their own. 

If you make more electricity with your solar system than your home uses, you can send that power either back to the utility grid, or store it in an off-grid solar system with batteries.

Step 4:  Net Meter Tracks the Amount of Electricity Consumed and Produced

A net meter in an on-grid solar system allows you to track the flow of electricity between your home and the grid. It measures how much electricity your solar panels produce and how much your home consumes. 

In return, you earn energy credits through a process called net metering. This means when your panels do not produce enough energy (like at night or on cloudy days), you can draw electricity from the grid while using your credits to reduce or eliminate charges on your bill.

Step 5: Batteries Store Excess Energy Generated

Solar systems with a battery storage facility or off-grid solar systems store any excess electricity that you do not immediately use. These batteries allow you to use the stored energy when your solar panels are not producing electricity, such as during the night or power outages. 

Battery storage increases energy independence, making it possible not to rely on the traditional power grid. In off-grid solar systems, batteries are crucial for ensuring a constant energy supply, even when sunlight is unavailable.

How is solar energy stored?

How do solar panels work for your home changes depending upon the system:

Energy Storing Process in On-Grid Solar Systems

In an on-grid solar system or grid-tied solar system, the solar panels are connected to the utility grid of the DISCOM. This means that you will be able to export any surplus electricity your solar panels generate to the grid owned by the DISCOM. You will also get reimbursed using something called net metering. 

Energy Storing Process in Off-Grid Solar Systems 

The off-grid system provides the opportunity to use the electricity your panels generate right away, or store it in batteries to use later. This stored electricity is crucial for powering your home at night, during cloudy days

You have learnt how solar panels work when the system is on-grid and off-grid. There is also a type of solar system that is basically a mix of both on-grid and off-grid.

Energy Storage Process in a Hybrid System

In a hybrid solar system, the system has connection to the DISCOM grid and incorporates battery storage. During the day, the solar panels produce electricity that powers your home, and excess energy can be stored in the batteries.  If the batteries are full, the extra electricity is sent to the grid.  

What Does An Inverter Do In A Solar Panel System?

The solar panels capture sunlight and turn it into Direct Current (DC) electricity as it is generated.  However, DC electricity is not compatible with the running of electrical systems in your home; this is where the inverter comes in because it transforms solar energy into usable electricity.  This DC electricity is either stored in a battery for an energy storage system or sent directly to the inverter.

To Summarise

With a greater understanding of how solar panels work for your house, you now see why this is one of the best eco-friendly investments you can make. Solar panels take in sunlight, convert it to electricity, and can help societies save as much as 80%.

Whether you are asking yourself how do home solar panels work, or you are ready to learn how are solar panels made step by step, one thing is clear—solar is the future.

So What Are You Waiting For? Cut Your Energy Costs by 80% and Go Solar Today with NoBrokerHood!

Complete guide to Solar Power:

Advantages and Disadvantages of Solar Energy
A Guide to Solar Panel Subsidy
Here’s Why Your Society Must Consider Switching to Solar Energy
Essential Tips for Solar Panel Maintenance
How Does Solar Power Work?

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Frequently Asked Questions

1. Will cloudy days impact the operation of solar systems?

Yes, solar panels can operate on cloudy days. Solar panels use daylight to generate energy, not direct sunlight – and even when it is overcast, the panels can still operate. Solar panels will always be more efficient on clear days when there is more sunlight and longer days during summer. 

2. Do I have to have a battery to store solar electricity?

No, you do not need to install a battery to store solar electricity. Many solar systems allow excess energy to return to the grid through net metering, meaning that you can store electricity with your local utility (DISCOM). While batteries may provide us with greater independence by storing energy we can use during black outs or at night, it is not a necessary component of a solar system.  

3. Are solar panels eco-friendly to use?

Yes, solar panels are eco-friendly renewable energy sources. They generate electricity without harmful pollutants or greenhouse gases. When in operation, solar systems have a relatively limited impact on the surrounding environment and can produce clean energy for decades efficiently. For those of us looking to lessen our impact while also being eco-friendly, solar panels are a sustainable way to reduce our carbon footprint.

4. What is the subsidy for solar systems in India?

The government in India provides subsidies to promote the uptake of solar under its Rooftop Solar Scheme or PM Surya Ghar Muft Bijli Yojana. For installations up to a 1kW system you will get ₹30,000, for 2 kW you will get ₹60,000 for systems more than 3 kW you will get a maximum of ₹78,000 subsidy. 

5. How do solar panels work when they are bifacial?

The back sheet in a bifacial solar panel is transparent as it is capable of absorbing solar energy reflected from the concrete below. This is made of plastic composite or glass.

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