Solar panel technology has been around for many decades, but it is only in recent times that solar energy has become widely available for consumers. A solar power system is one of the cleanest and most cost-effective ways to power your home or workplace, especially in a country with abundant sunlight such as Australia. Through an apparently magical and mysterious process, the solar panels on your roof captures sunlight to generate electricity for all your appliances and lighting. How does this process actually work and how do solar panels transform sunlight into usable electricity in your home?

Generating solar power from panels

Harnessing solar power for everyday applications is possible because certain types of materials react to exposure to sunlight by turning photons – the particles of sunlight – into electrical currents. Typically, solar cells are constructed from thin wafers of silicon that function as semiconductors by generating an electrical current when the sunlight hits the cell. Solar panels use large crystals derived from silicon – a plentiful chemical element found in sand – as well as cheaper and smaller crystals such as copper-indium-gallium-selenide, or thin film solar cells. These crystals all carry millions of tiny atoms with charged electrons.

Inside the cell, the electrons within the silicon are struck loose by the exposure to sunlight and are then able to move around the silicon crystal to wherever there are available electron gaps within the crystal cells. These electrons move continuously, throughout the day, as long as there is sunlight. The movement of these electron is what creates an electrical current. This current is a direct current (DC), which is not compatible with the wiring in most homes. Hence, the DC needs to pass through an inverter that converts it to alternating current (AC) and allows it to be used around the home or office.

Power efficiency

The power efficiency of a solar panel indicates how much power is generated in relation to surface area, so the higher the efficiency, the more energy your solar system will generate for your roof area.

Solar systems have become very efficient at capturing sunlight and converting it into usable energy. Residential systems typically have a power efficiency of around 15 to 18 percent, which means they can convert up to 18 percent of the light that hits them into electricity. Solar panels for other applications, such as those used for powering satellites, can have power densities of up to 50 percent.

Effective working life

Solar panels have a very long effective working life. Around the world there are systems installed as far back as the 1970s that are still generating more than 80 percent of their original power. Solar panels can last well beyond 25 years, though there is a degree of degradation which happens each year. Most systems decline by 0.5 percent a year in power efficiency, however many of the cheaper or poorly manufactured panels will lose far more each year, and efficiency usually drops more in the first 1-2 years.

Key components of solar power systems

There are different types of solar power systems, including large scale commercial setups and residential systems. Residential systems integrate three key components: the solar panels, an inverter, and the metering system.

Solar panels

Solar panels are made from disks of crystalline silicon, also known as wafers or cells. These cells are set out in a grid on the top of the panel, connected with a conductive strip, and covered with a thin layer of cover glass. Mono-crystalline solar panels have cells that are cut from a chunk of silicon that has been grown from a single crystal. Growing these single crystals is costly, so mono-crystalline panels can be more expensive than other types of solar panels. Multi-crystalline or poly-crystalline solar panels have cells that are developed from a crystal that has grown in multiple directions, and this results in slightly lower cell efficiency than mono-crystalline panels.

Each solar panel is connected with leads to form a set of panels that are connected to an inverter. If the panels are not specifically wired for the inverter type, the full power output of the inverter might not be achieved.

The average home requires around 12 to 15 square metres of shade-free roof space for a solar panel system. Most solar panels incorporate drainage systems to reduce the likelihood of water corrosion.


The inverter is connected to the solar panels system and your property’s electrical wiring. The role of the inverter is to convert the DC power generated by your solar system into AC power that is usable for your property. Most inverters can be placed inside or outside your home or workplace, away from direct sunlight to prevent overheating. Older style inverters will have a display panel that tells you how much power is being generated, whereas modern inverters have online monitoring portals.

There are different types of inverters, including:

    • string inverters – This is a large box which is often situated some distance away from the solar panels, where all the panels in the array are connected as a group, or string. When a string inverter is used, the solar system will only produce as much power as the poorest performing panel on the string. There may sometimes need to be more than one string inverter, depending on the size of the installation. This is the most commonly used inverter for home power systems.
    • micro inverter – This is a miniature inverter situated on the back of or very close to a solar panel. Its role is to convert the DC electricity produced by a single solar panel. Micro inverters allow each panel to be monitored and perform as an individual, meaning the system’s performance is not as greatly affected by minor shading or the soiling of one panel. Micro inverters are also a safer option, as the DC current is converted right at the source, rather than being carried through cabling to a single large inverter.
    • optimised inverters – Similar to a string inverter, an optimised inverter uses a power optimiser, a small box attached to the back of a panel, which can isolate any panel that might affect the overall performance of the system to enable maximum energy harvesting.

Metering system

The metering system is another important component of any solar power system. In Australia, most urban properties are connected to the electricity grid so residents can still power their properties at night, when their solar systems are unable to generate power from sunlight. Rural properties sometimes have systems that are not connected to the electricity grid, so they cannot sell their excess power to the grid.

Systems that are connected to the grid can sell their excess power back to the grid whenever their system makes more power than is required. In most states, metering systems can be programmed to divert all electricity generated back to the grid (GROSS system) or to feed only excess electricity back to the grid (NET system). Since the reduction of government mandated solar feed in tariffs, the greatest benefit is made with a Net Metered system.

Feed In Tariffs and Solar Savings

Excess electricity sold back to the grid is purchased by electricity companies by way of a rebate provided by your electricity retailer. Years ago, state governments mandated that solar fed back to the grid should be rewarded with a generous rebate. These days, the rebate is determined by the contract between you and your energy retailer. Because the rebates offered for new connections are now lower than the price of purchasing energy from the grid, the greatest savings are made when you can optimise your power usage to daylight hours, when your system provides power for free.

Coupling solar panels with home battery storage also allows you to store excess energy for times of low or no reproduction. For grid-connected solar installations, battery storage allows you to store power, rather than selling it back to the grid at a low cost.

Want to know more about solar power? Get in contact with the experts at Keen 2B Green.