Understanding Your Solar Energy System

A solar energy system is made up of a collector component such as a solar panel, a converter component to collect the solar energy and convert it to electricity, and a storage component such as a battery.

As the graphic demonstrates, after the energy passes through the inverter, it enters the main fuse box and from there passes through your utility meter where it is counted. Then, the extra solar energy you have generated is fed into the electric grid.

A solar energy system is made up of a collector component such as a solar panel, a converter component to collect the solar energy and convert it to electricity, and a storage component such as a battery.Solar energy systems may be as small as a flashlight or phone charger or as large as the world’s largest solar farm in Kamuthi, Tamil Nadu, which has a capacity of 648 MW and covers 10 square kilometers.

A solar energy system does not have to connect to the grid, nor be very complicated. It does have to create usable heat or electricity from sunlight. Some systems, such as a sun tea making system which consists only of a jar with water and sunlight, don’t even have panels or a converter and still work just fine. So, the idea of a solar energy system is that it collects sunlight and makes it useful to us. Our modern solar energy systems are more efficient versions of the same thing.

Solar Energy System for Home

Home solar energy systems, like the one pictured above, are so good that the question of installing one is now a “when” not an “if” for most homeowners. Even Energy.gov writes that “A solar electric system provides an opportunity for anyone who is looking to reduce monthly utility bills and make a long-term, low-risk investment.”

Home solar energy systems provide several benefits such as energy cost savings, increased home value, and environmental improvement. One recent study indicates that “on average, solar increased the value of a home by about $15,000” (“Benefits”). Our environment improves with every solar installation: “Each kilowatt-hour (kWh) of solar that is generated will substantially reduce greenhouse gas emissions like CO2, as well as other dangerous pollutants such as sulfur oxides, nitrogen oxides and particulate matter.”

What are you waiting for?

To get your home solar energy system started, Energy.gov suggests you follow these steps.

Investigate Your Energy Efficiency

What is your home’s current level of energy efficiency? Have a home energy audit to discover where you can save energy.

Check the efficiency and age of your appliances. If you have inefficient appliances, consider upgrading. If you are using those appliances during peak usage periods when many providers increase the cost per kilowatt, could you change to a thriftier usage schedule? Check with your own provider, but peak periods are usually afternoon and evening and are easily avoidable.

Switch to LED light bulbs. Wait until dark, turn off the lights, and look around for those little red and green lights that signal something is plugged in and using energy. You may think you have found all these little lights, but you will be surprised how many you will notice when the lights are all out. Small things, such as the speakers on your computer, can add up to big bills over the long haul. Unplug it or turn it off if you aren’t using it.

No matter much heating and cooling is required where you live, weatherizing your home will make it more efficient to heat or cool. Walls and ceilings should be insulated. Windows and doors are often sources of energy waste. These can be replaced or just insulated with foam. Here is a digital thermometer you can point and measure the temperature anywhere in your home. Lastly, the area under your home should be vented but closed to drafts.

Your solar investment will go farther in a weatherized, energy efficiency maximized home.

Evaluate Your Solar Potential

Evaluate your home’s solar potential and limitations. What condition is your roof in? What work may need to be done on it to make it ready for solar panels? Does any part of your roof face south? How large is your roof? How much sunlight hits it in a day? Are there shade trees obstructing the sunlight?

Do you have a neighborhood or home owners agreement that has rules against solar installations? It is unlikely you do, but it is better to be sure.

After you get a rough answer to these questions, it is helpful to consult a mapping service. You can click here for a list. These services are usually free and easy to use. They provide a more precise estimate of the solar energy your home solar energy system can produce. You need the information from a mapping service, so you can make a good decision about the size of system you want to purchase.

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Choose How You Want to Use Solar

Homeowners (and renters, too) have an array of choices about how to use solar energy. You may purchase a solar energy system, and have it installed in your home. You may use a community solar plan from a provider. You may enter into a solar lease agreement, PPA, or solarize program. In today’s market, any option you choose will reward you with cleaner, cheaper electricity for your home. Read on to determine which option is right for your home.

Purchasing Your Own

Purchasing your own home solar energy system is the most obvious and easy choice for homeowners. If you own your home and receive enough sunlight, all you need is the money to buy and install a solar energy system.

Home equity loans are available for homeowners with equity. Using a home equity loan to purchase your system will probably pay the most dividends overall. Equity loans are sometimes available to homeowners at lower interest rates. Homeowners with a lot of equity in a higher-end home might qualify for both equity and solar loans. It is always worthwhile to compare rates of interest when choosing a loan.

The solar loan is the other financing option for the purchase of a home solar energy system, unless your aunt Gladys left you about $15,000.00, about the cost of the average system. If you must use a solar loan, try not to borrow the full amount. Keep in mind that to maximize your return on your solar energy system, you must find the plan that offers you the least cost and lowest interest over the shortest time possible.

Some installation companies will assist you in finding funding to purchase your solar energy home system. Below is a list of solar loan providers.

Community and Shared Solar Plans

Community solar plans are probably the easiest option for going solar. Community solar plans are offered when your utility owns, operates, or partners with a solar farm. A solar farm is a usually large space featuring a solar panel array. A community solar user purchases solar electricity generated by the solar farm. The solar electricity comes to your house just as your old electricity did.

Shared solar works about the same way. Shared solar plans are established by a group of people who want to use solar energy but are unable to generate it themselves. They pool their money to collectively purchase solar at the level that fits the collective’s needs and resources. The solar energy they use may be generated on- or off-site and could be owned by utilities, solar developers, non-profits, or even collective members.

For the estimated 50% of US households that either don’t have enough rooftop or can’t install because they rent, community and shared solar it is a good option (“Planning”). Also, if you just don’t want to be responsible for the repair and upkeep of the system, community solar may be for you. You don’t have to purchase any equipment nor own a roof.

The drawback to community and shared solar is that the participants do not receive the tax and other benefits afforded solar energy system owners. As with the rest of this process, learn all the facts before you decide.

Solar Lease Agreement

If ownership of your solar energy system isn’t possible or desirable for you, then a solar lease agreement may work for you. In a solar agreement, you do not own your home solar energy system but only lease it. The solar company installs the system in your home. You then pay the lease fee and your regular electricity bill. According to energy.gov and us.sunpower.com, “For many customers, their lease and remaining utility bill [combined] are lower than their previous electric bill” (“Home Solar”).

If you sell your home, the buyers, upon credit approval, can enter into another such agreement with the same system owners. The homeowner never owns the leased solar energy system.

A lease agreement may be right for you if you want a solar energy system in your home, but you do not want to purchase one nor be responsible for its upkeep. Or, perhaps you don’t qualify for any of the state and federal tax investment credits, but you would still like to save money on your own electric bill while having the opportunity to sell your unused solar energy back to the utility through a net-metering agreement.

Whatever your situation, keep looking until you find what is right for you. There are plenty of options out there for everyone.

Power Purchase Agreements

PPA’s have been essential to the development of the solar energy market. Simply, the PPA is a financial agreement between you and the solar power developer. You agree to purchase power from the developer for a set amount per kWh for a set duration from the system located at your home and owned by the developer. The solar developer designs, finances, permits, and installs a solar energy system on your property.

The benefit to you is the lower per kWh rate you will be paying for your electricity.

The PPA offers all the benefits and drawbacks of the solar lease, such as cheaper, cleaner electricity, no upkeep of equipment, no tax credits, and no ownership. The PPA is a good choice if you want to minimize upfront costs.

Solarize Programs

Solarize programs are a good fit for people who have access to them through their communities. The Sunshot Initiative is a government program that supports community programs that make solar better, cheaper, and easier to install. Since 2009, the Sunshot Initiative has sponsored Solarize programs. Speaking to the popularity of the program, there are now more than 230 Solarize campaigns in 25 states.

Solarize programs “are locally organized community outreach efforts aimed at getting a critical mass of area homes and businesses together to “go solar” in an established period of time (usually a few months)” (“Planning”). These campaigns leverage the power of group-purchasing, buying solar energy system components and even installation in bulk for a discounted price. Because of the healthy, steady market created by the group purchases, installers can charge less. Everyone wins.

Estimate You Electricity Needs

Estimate your solar electricity needs. The best way to do this is to use an online tool provided by most electric companies. It allows you to login and view your electric usage graphically. Login to your online account and check for this tool.

You may also gather your bills and estimate your usage based on the past two or three years of electricity usage. You are looking for the number of kilowatt hours (kWh) you are using each month. The national average is around 1,000 kWh per month, but don’t rely on an estimate. Your home may be different.

Don’t forget to consider changes you may be making in the future. Are you planning for a pool in the backyard next summer? Will you be buying an electric car? Plan for the extra electricity you may need for expected and unexpected changes in your energy needs.

Obtain Bids and Site Assessments

Get at least three bids and site assessments from contractors, making sure the estimates are all based on the same metrics and characteristics. It is essential to make sure your estimates are all for approximately the same solar energy system.

When reviewing your bids, be sure to compare these areas carefully.

  • Do the systems generate the same kWh’s?
  • Are the systems comparable in number and type of components?
  • Are the warranties for similar lengths of time, usually 20 years for panels and 10 years for inverters?

To find a contractor you can work with, you need to do a little easy research. You may want to talk with people who have installed a solar energy system. You may search for a solar installation company online. Choose only contractors certified by the North American Board of Certified Energy Practitioners (NABCEP) as this board sets the industry standard. Be sure you know about any extra licensing requirements your state or city may have. Asking the following questions may be helpful.

  • Does the contractor have references you can talk with?
  • Does the contractor know about local permitting and interconnection processes?
  • About how many similar installations has the contractor completed?
  • Can you agree on an installation schedule?
  • Is the contractor aware of the requirements for installers in your area?

Be assured that you are entering the solar energy market at a good time. There are many qualified installers right now. Solar technology has never been more advanced than it is now, and more innovations in solar technology are introduced nearly daily.

Moreover, since you already pay an electric bill, and that bill is guaranteed to go down upon installation of your solar energy system, there really is minimal financial risk in the prospect. Luckily, there is no such thing as a solar panel that doesn’t work!

Understand Your Financing and Incentives

Several available financing and incentives options at both the state and federal level are currently available to homeowners. Through 2019, all small solar energy system installations qualify for a 30% tax credit. The credit decreases to 26% in 2020, then to 22% in 2021, and expires December 31, 2021 and is for homeowners who purchase solar energy systems, so those who lease or have PPA’s are not included (“Planning”).

The options for solar financing are solar leasing, power purchase agreements (PPA’s) and solar loans.

Solar Leasing

Leasing may be for you if you just don’t want to, or can’t, own your own system. Leases don’t get tax credits or lead to owning your system.

Solar Power Purchase Agreements (PPA’s)

Clever and useful, the PPA may be your best fit if you own your home but don’t want to own your own solar energy system.

Solar Energy Loans

What we love about solar loans is that even after the loan payment is made and the electric bill is paid, you generally still have more money left over than you did before you installed your solar energy system.  As a bonus, when you finish your payments, your electricity will be free, or better, free and you receive a payment from your utility or the extra energy you sold back to the grid through a net-metering agreement.


Be sure to click here to access the Database of State Incentives for Renewables and Efficiency (DSIRE). DSIRE will direct you to a list of any incentives your state may offer. You will make the best plan by knowing all of your options before making decisions.

Here are some private solar loan offerings from cesa.org:

Admirals Bank: www.admiralsbank.com/renewable-energy-lending/loan-programs/solar-step-down

GEOSmart: www.egia.org/Marketing/emails/geosmart/CL/geosmartProgramUpdate-201310.html

SolarCity: www.solarcity.com/residential/mypower-solar-loan

Sungage Financial: www.sungagefinancial.com/why-own-and-finance-solar

SunPower: us.sunpower.com/home-solar/save-with-solar-panels/

Work with Your Installer

You will be working with the installer you chose along with your local utility to install your system, connect it to the grid and set up agreements.

At this stage, the crucial issue is your connection to the grid. In some areas the connection fee is still steep, but that is changing quickly. Your utility company can tell you when and how you can expect to be paid for the energy you feed back into the grid.

For many lucky readers, when install your system tomorrow, your utility company will already know the solar connection routine as well as it now knows the old connection routine. Don’t worry because in a very short while, all utilities will be hip and innovative regarding customers who produce energy at home.

There are two reasons why this will happen. First, when individuals install solar or wind energy technologies which they then feed back into the electric grid, called distributed generation, our grids become stronger and more resilient, which is good for everyone.

Second, anyone who looks can see that collecting solar energy, which is free and delivered to your door, is smarter and easier than burning fossil fuel, which is costly in dollars and environmental damage, but also must first be mined from inside the earth before it can be hauled to the location of the utility using it. Even at the utility, more dirty and costly processing is necessary to convert the fossil fuel to electricity. Solar is so superior to other sources of electricity that it simply cannot long be ignored.

Don’t Be Hidebound

People are hidebound. We all know it, but we don’t like to admit it. Most of the people who ever lived here could remain hidebound and survive nicely because there was virtually no technological development at all in an average life span. In the past, people may have been faced with adjusting to a new shape of flint tool, but never would have faced today’s dazzling array of daily invention and innovation. Hidebound worked for most people for a long time, but this is 2018 in the midst of the computer age, the most  technologically advanced state ever achieved by human beings. All this behooves us to keep up a bit.

Spend even 5 minutes today educating yourself about solar energy, and you, too, will see.


For help with your home solar energy system, click here to access “Planning a Home Solar Electricity System” by Energy.gov. This helpful overview suggests questions to ask as you navigate the purchase, installation, and use of your new solar energy system.

Many solar energy systems are available now, and a smart variety of solar products have become available with many more coming soon. Fueled by solar energy’s presence almost everywhere almost any day, new handy gadgets to collect and convert solar energy to electricity appear almost daily.

Solar Panel

Wikipedia explains that a solar panel or solar cell is “an electrical device that converts the energy of light directly into electricity by the photovoltaic effect.”

Solar Battery

Calling the batteries that come with your home solar energy system is not strictly correct. Ditto this battery featured below. Since this battery will accept a charge from a solar panel, we call it a solar battery, but in most other ways it is just a battery.



A converter, also known as an inverter or PV inverter, is the component in your solar energy system that converts the “variable direct current (DC) output of a photovoltaic (PV) solar panel into a utility frequency alternating current (AC) that can be fed into a commercial electrical grid or used by a local, off-grid electrical network” according to Wikipedia.


Solar Lights

Solar lights are the first solar appliance to become commonplace.


Solar Water Heater


Suggested Resources

Visit the NREL, EIA, SEIA, and Solar Energy Technologies Office websites for more solar energy resources. All the sources cited below are useful and will lead you to other sources of information about home solar energy systems. A wealth of good information is available online.

Works Cited

“https://us.sunpower.com/home-solar/save-with-solar-panels/.” 2018. https://us.sunpower.com. Webpage. 18 May 2018.

https://www.aljazeera.com/news/2016/11/india-unveils-world-largest-solar-power-plant-161129101022044.html. 20 November 2016. Webpage. 14 May 2018.

“https://www.cesa.org/assets/2015-Files/Homeowners-Guide-to-Solar-Financing.pdf.” May 2015. https://www.cesa.org. Webpage. 17 May 2018.

https://www.eia.gov/energyexplained/index.cfm?page=solar_home. n.d. Webpage. 4 March 2018.

https://www.energy.gov/energysaver/benefits-residential-solar-electricity. 2018. Webpage. 14 May 2018.

https://www.energy.gov/energysaver/buying-and-making-electricity/using-solar-electricity-home. 2018. Webpage. 14 May 2018.

https://www.energy.gov/energysaver/home-heating-systems/active-solar-heating. 2018. Webpage. 14 May 2018.

https://www.energy.gov/energysaver/planning-home-solar-electric-system. 2018. Webpage. 14 May 2018.

https://www.energy.gov/savings/residential-renewable-energy-tax-credit. 2018. Webpage. 14 May 2018.

As always, it is a pleasure writing for you!