By Jennifer Lubell

If you’re looking to invest in a solar energy system, here’s some basics on how this technology works.

Solar panel systems are quite resourceful in how they draw energy from the sun to bring electricity into people’s homes. The systems differ from conventional fossil fuels such as coal, natural gas and petroleum in that they produce no emissions or waste and are self sustaining.

A solar panel’s semiconductor material is made up of several layers of crystallized silicon to which manufacturers introduce impurities such as phosphorus and boron – a procedure called “doping” – to help create an electrical current. This material captures photons from the sun (a process known as photovoltaics), converting them into direct current (DC) electricity. The panel’s inverter then transforms DC into alternating current (AC) electricity, sending power to a home’s appliances and lights.

Even on overcast days, solar panels can absorb sunlight reflected off surfaces such as clouds. The panels are built to work in all climates. However, areas with more sunshine will get more energy from the same panels, says Dr. Becca Jones-Albertus deputy director of the U.S. Department of Energy’s Solar Energy Technologies Office. “To put this into perspective, Germany is a global leader in solar energy installations but has roughly the same solar resources as Alaska, showing that solar still works and can make sense in cool and rainy climates.”

All panels have an efficiency threshold: an estimate of how much sunlight actually hits the panel and gets converted in ideal temperature settings. Higher efficiency systems – those that can produce more power – are pricier, but call for fewer panels and are a good investment in homes with smaller roofs or less yard space. As an example, a premium panel’s efficiency may rate at 20 percent and above, compared with the rate of a typical panel, which ranges from 15 percent to 17 percent efficiency.

A grid-connected solar system usually works in tandem with conventional energy sources to ensure that a home produces enough electricity. A utility meter, which measures how much energy a home takes in, connects the residence to a local power grid supplied by the utility company. The meter will supply a home with electricity on days when the solar system doesn’t produce enough energy, and deliver any excess energy into the grid.

Another option is to install a battery for backup power when the sun isn’t shining and panels aren’t producing electricity, says Jones-Albertus.

“Depending on the size of the system and the amount of electricity that can be stored, it’s possible for these homeowners to power their homes solely on the solar power they produce and without any backup power assistance from a utility or electric cooperative,” she explained.

Homeowners can get credits to their monthly electricity bill for any excess energy their solar system produces, although compensation varies from state to state. Your utility company will bill you for the amount of kiloWattHours (kWh) or energy that you use each month; a Watt represents a unit of power, and a kiloWatt (kW) equals 1,000 Watts of power. It takes about 200 Watts daily to power a plasma television, for example.

On average, home solar systems can produce between 4 kW to 10 kW, and electric bills range from 500 kWh to 1,500 kWh. According to some estimates, a 5kW system that produces 7,100 kWh per year could reduce carbon dioxide emissions by 4.9 metric tons annually.

And the savings are significant: installing a solar energy system can save anywhere from $7,000 to $30,000 over a 20-year period.