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Solar energy is the most abundant energy source we have. If we count up all of the solar energy that hits the earth’s surface, we could power the world 10,000 times over.

This energy abundance is why solar is fast becoming one of the most popular energy sources for homes and businesses alike.

Not only is solar power abundant, but it is also key in combatting climate change. It provides a clean, affordable, and environmentally friendly energy alternative to legacy power sources such as coal-burning and gas.

So how does solar work?

How Does Solar Work

What is Solar Energy?

When people refer to “solar energy”, they are referring to power from the sun that is converted into electricity using solar panels and other technology. Solar can produce both heat and electricity, depending on the technology being used.

Australia in particular, has the highest solar radiation of any continent, making it one of the most fruitful places to employ solar energy. Despite this, Australia has a long way to go to fully embrace this underutilised resource of ours.

Solar energy can power our homes and our businesses with ease. Many solar panel systems can even store excess energy production on sunny days that can be used at nighttime, or on overcast days.

How does solar energy work?

The sun is essentially a giant nuclear reactor that produces energy called photons. These photons travel through space and many eventually reach earth. Enough photons reach the earth’s surface every day that we could meet our energy needs for a year if we captured them all.

You may have heard of PV when it comes to solar panels before, but most people don’t know what it stands for. When photons reach the earth, some are collected by photovoltaic (PV) cells in our solar panels. The energy that this produces creates the electricity that we can then use in the electricity grid.

When photons meet with PV solar cells, they knock electrons away from their atoms. Conductors are attached to both the positive and negative sides of a cell which creates an electric field that is similar to a battery.

There has been, in recent years, a significant rise in the uptake of solar energy, but even with that, PV power accounts for only a fraction of a per cent of the energy consumed in Australia. As solar becomes more affordable and accessible, usage is predicted to increase. Solar energy is the fastest-growing source of power globally and continues to break growth records.

Solar Energy Use Increasing

How does a solar panel produce energy?

PV solar panels produce energy that flows in one direction around the circuit, known as direct current or DC energy. In the same way a battery works, electrons move from the negative side to the positive side, and then back around to the positive side. This movement generates electricity.

There is also a second type of energy production that a solar panel system may be performing, depending on the type. This is called alternating current (AC) electricity. With AC, electrons are sent in reversing directions, always being pushed and pulled to the positive and negative sides of the circuit.

Systems create AC power by spinning a coil of wire beside a magnet. The spinning coil is being turned by solar electricity, which is how it produces power. Several larger-scale solar systems use AC because it is easier to transmit over long distances. Most home solar panel systems, however, produce DC electricity.

What does a solar inverter do?

AC and DC power are not compatible with the same systems, and yet they somehow have to coexist on the same power grids. This is where solar inverters became essential. A solar inverter takes DC electricity produced by most home solar panel systems and converts it into AC power for use on the grid.

These are essential if your energy production is being fed back into the grid, which it often will be. Especially if you are using that feed-in to reduce your energy bills, a solar inverter is one of the most critical parts of your solar panel system.

Solar inverters also provide safety defence, such as ground fault protection. Additionally, they give essential system stats around voltage, current, energy production, and maximum power point tracking.

There are two main types of inverters:

Central inverters

Central inverters have long been the more present type of inverter because home solar panel systems have become more popular.


Micro-inverters can optimise each panel, rather than covering an entire solar panel system.

Having each solar panel optimised with an inverter allows each panel to perform at its maximum potential, allowing it to produce more energy. Central inverters, by contrast, can be impacted by a problem in one panel. This impacts the efficiency of the entire system.

Central and Micro Inverters

Can solar panels store energy?

Many modern solar panel systems can store energy using solar batteries. These allow solar panel users to store the excess power on-site. Solar panels will generally produce more than enough power on sunny days, which a battery will then store for use at night or in overcast ways.

This is a great option for people who want to get more ‘off-the-grid’, however, depending on your energy usage and the size of your solar panel system, you may not be able to produce enough power for your whole home all the time.

Most homes with solar panels are still connected to the grid to draw power from when they need it. There is another reason that you might want to remain hooked up to the grid, and that is to sell the energy that your solar panels produce back to the grid.

Net metering allows you to send energy that your solar panel system creates, but that you don’t immediately need back to the grid to be used by other homes and buildings. This is an alternative to having a battery connected to your system and can mean that you save a significant amount of money on your power bills. In some cases, depending on your energy usage and the amount of sun, you may even get a small payment from your energy provider.

Does the weather impact solar panels?

Solar panels rely entirely on photons produced by the sun to create energy, so how does solar work when the sun is hidden by clouds?

Lack of sun does impede a solar panel system’s ability to produce power, but it may not completely stop it. If there is still some light cutting through, solar panels will still capture that and create power. It will just be at a significantly lower output level.

The weather can also affect solar panels in a surprising way. If you think that the perfect weather for solar energy is a warm, sunny summer’s day, you’d be wrong. Solar panels do work best in unobstructed sunshine, but they also operate most effectively in colder weather. As temperatures rise, solar panel efficiency dips, and panels will produce less electricity from the photons hitting the panel’s surface.

On average, solar panels will still produce more power in summer than in winter, despite the heat. Summer tends to have more sunny days, and despite the drop in efficiency, solar panels will still produce more power over the season than in winter.

Will solar panels save you money?

Many factors will impact the amount you can save with solar panels. The first is the weather in your area. How much sun you get throughout a season and a year will impact how many photons your solar panel system can capture and turn into energy. Similarly, how warm it gets will impact how efficiently your system can perform that process.

Whether you choose to use net metering or store your excess energy in a battery is also likely to have an impact on how much money you can save. With either system, you are still likely to need to draw power from the grid on occasion, so your energy bill will be significantly lower, but probably not zero every season.

Will Solar Save You Money

Solar panel systems also require regular maintenance, which will keep them running at a higher capacity for longer. Your solar panel provider should be able to discuss with you your options for a maintenance plan to help ensure periodic checks are being carried out.

The type of inverter you choose to use will also have a significant effect on how efficient your solar panels will be. A central inverter may mean that your whole system loses efficiency when there’s a problem with one panel, whereas micro-inverters can ensure top efficiency for all panels without issues.

In summary

Solar panels are a fantastic investment, and over the long term they will not only save a lot of emissions from energy production, but they can also save you a lot of money. With enough sun, a good maintenance plan, and great solar equipment, you can ensure your solar panel system is always running at high efficiency, producing power, and bringing your energy bill down.