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1) Solar Panels - Solar panels, or solar modules as they are sometimes called, are typically installed on the roof. These panels are made up of silicon-based photovoltaic (PV) cells, which convert sunlight into direct current (DC) power. The panels are constructed with robust tempered glass and aluminum frames. PV modules are weatherproof, resist corrosion, carry at least 25 year warranties, and are engineered to produce electricity for around 40 years.
2) Inverter - The DC power from the solar panels is sent to an inverter, where it is converted into alternating current (AC) power, the exact same type of energy which flows to your home from the grid utility. The inverter should be regarded as an energy computer. It is constantly monitoring the grid energy which comes in to your house, as well as converting and conditioning your solar energy to match the electricity which flows from the grid. If your solar system is producing more electricity than your home requires at that very moment, the inverter is responsible for forcing that excess energy back on to the grid, which gives you energy credits to use when it’s dark out. The inverter also ‘wakes up’ your solar system every morning and puts it to sleep when it gets dark … the inverter does it all automatically.
3) Electrical Panel - The AC output electricity from the inverter is sent to the home’s electrical panel, often called a breaker box. The solar energy is back-fed to the home’s AC electrical system using the same sort of circuit breaker which are in your panel to extract energy. Your home first uses the back-fed solar energy, and whatever else is needed is drawn from the grid.
4) Utility Meter - The utility meter continually measures your electrical supply; when your solar system produces more power than you need, the meter literally spins backwards, accumulating energy credits, which are used once your home requires more electricity than the solar system is currently producing. This seamless exchange of energy to and from the grid occurs automatically and is represented in the numbers on your utility meter going up and down.
5) Utility Grid - Your home remains connected to the utility grid as it always has. There are no batteries in your home to store energy in a typical grid-tie PV installation. Think of the grid utility as your battery or energy storage; they use your extra solar power, and credit you back that energy when you need it, like at night. When your solar system is shut down, your home will draw grid energy just as it always has.
This Sunpower animation desribes how your home turns sunshine into household electricity.