What is Solar Electric Energy?

Solar energy is, simply, energy from the sun. The amount of energy from sunlight that falls on the earth each day is enormous. On an average day, a square meter on Earth collects an average of about 4.2 kilowatt-hours of energy. This figure varies by location and weather patterns. Deserts receive the most sun, more than 6 kilowatt-hours per day per square meter.

Photovoltaic systems convert this sunlight directly into electricity. According to the U.S. Department of Energy’s Photovoltaics Program, “PV modules covering 0.3 percent of the land in the United States could supply all the electricity consumed here.”

The word ‘photo’ means light, and ‘voltaic’ refers to the electrochemical process of producing electricity. When sunlight strikes a PV cell, it is changed directly into electricity without creating any air or water pollution. PV cells are made of at least two layers of semiconductor material. One layer has a positive charge, and the other has a negative charge. When light enters the cell, some of the photons from the light are absorbed by the semiconductor’s atoms, freeing electrons from the cells’ negative layer to flow through an external circuit and back into the positive layer. This flow of electrons produces an electric current.

Benefits of Photovoltaic Systems

Photovoltaics has proven itself over the past 20 years as an effective, quiet, reliable, and increasingly economical approach to generating pollution-free energy and reducing greenhouse gas emissions.

In addition, PV systems have low operating costs, since their fuel (sunlight) is free and there are few moving parts. These are also versatile—allowing power output to be increased by adding more modules—and operate well in nearly any climate. They are also safe when installed properly.

Solar energy, because of its decentralized and easily distributed nature, is ideal for certain residential and commercial applications. Solar energy, for example, is well-suited to provide a portion of most homes’ energy needs. Solar systems equipped by battery backup have been found to be extremely valuable in responding to the power needs of communities that have experienced hurricanes and other natural disasters. In the construction of new homes and commercial structures, “building integrated” PV systems are successfully being designed right into the façade and/or roof of these new buildings.

Today, more than 2 billion people in the world do not have electricity. Extending the utility grid to these areas is very expensive. Thus, in an increasing number of cases, solar energy is being tapped to provide less-expensive and much cleaner electricity to people in rural communities who would otherwise use noxious diesel and kerosene fuels. Several studies in the U.S. and elsewhere have cited the economic and health benefits the public can derive from the installation of PV systems, rather than building new coal- or oil-fired plants.

Photovoltaics are used to generate power for a wide variety of applications, including pocket calculators, water pumping, emergency power, sophisticated telecommunications equipment, street lighting, space satellites, lighthouses, and residential and commercial electricity.

And, a number of utility companies across the nation are are building PV systems into their power supply networks. Called "green power" programs, these utilities offer their customers "clean" energy from renewable energy sources — such as solar and wind — as an alternative to fossil fuels.

PV System Design

The basic building block of PV technology is the solar “cell.” Multiple PV cells are connected to form a PV “module,” the smallest PV component sold commercially. Modules range in power output from about 10 watts to 300 watts. A PV system connected or “tied” to the utility grid has these components:

  • One or more PV modules, which are connected to an inverter
    Inverter, which converts the system's direct-current (DC) electricity to alternating current (AC)
  • Batteries (optional) to provide energy storage or backup power in case of a power interruption or outage on the grid.
  • AC electricity is compatible with the utility grid. It powers our lights, appliances, computers, and televisions.

Utility-Intertied Photovoltaic Systems

A utility-intertied—sometimes called grid-connected—PV system generates electricity that is supplemented by the energy provided by the existing utility grid. A utility-intertied PV system requires neither battery storage nor an emergency back-up system since it is connected directly to the utility grid, which is used as the storage medium. While a PV system can be designed to provide all of a building’s electrical needs, most systems provide only a portion of the total electricity requirements. A utility-intertied system uses a specially programmed meter that is able to turn backward in case the PV system produces more energy than the building is using.

 Grid-connected PV systems require a special meter capable of "turning backward" when the PV system generates more electricity than is needed by the building.
Since PV modules are only capable of producing direct current (DC) electricity, an inverter is required to convert the DC output produced by the PV array into alternating current (AC) power. AC electricity is needed to run computers, refrigerators and other appliances, and lighting. Utility interactive inverters have built-in safety features that prevent them from operating if there is an interruption in grid-supplied power. The inverter uses the prevailing line-voltage frequency of the utility line as a control meter to ensure that the PV system’s output is fully synchronized with the utility power.

PV Systems for Off-grid or Remote Applications

PV systems also can be off-grid or remote systems, which are not tied into a utility grid but, instead, stand alone. Off-grid systems require batteries to store energy for times when the sun isn't shining.

Most of the off-grid market is located in remote locations and those without accessibility to the utility grid. For example, isolated communities can store medical supplies in refrigerators powered by PV. Any appliance that can run off a 12-volt battery with direct current is a good application for remote PV because it does not require an inverter to create alternating current. Telecommunications and transportation warning signage are also common examples of off-grid applications.

However, in many instances, the grid may be near a well-developed area, but it is still more cost-effective to install a modular PV system, rather than to cross roadways or sidewalks. Some utilities offer PV systems as alternatives to expensive construction.
The same values that drive the PV system market also set the wide range of PV costs. According to the U.S. Department of Energy, "the high range of capital costs of $5-$12 per watt is offset by low operating costs. The 20-year life-cycle cost is $0.20-$0.50per kWh.

A remote home installation that requires batteries, a generator, or both may need 2-5 kilowatts of power as high as $12 per watt, or a high cost of $60,000. However, the cost of a rural distribution line now averages $60,000 per mile. With the additional advantage of lower land costs in remote areas, PV shapes up as the best value."

Durability of PV Systems

Solar panels are made of rugged tempered glass and will withstand nearly any natural occurrence of rain, snow, hail, or wind. When the panels are covered with snow, bright sunlight penetrates the snow and melts it from underneath. Systems can be ground-, roof, or pole-mounted.

Staff from the Stellar Sun Shop in Little Rock, Arkansas, wanted to demonstrate their commitment to the product they sell in their store. Installing photovoltaic roofing shingles was the perfect way to do this. The flexible shingles, rated at 17 watts each, are manufactured by United Solar Systems Corp. This stand-alone, 1-kilowatt PV system with battery backup powers the shop's lighting, computer system, and energy-efficient appliances that are displayed in the showroom. The system has been in place for more than two years and has performed flawlessly. (Photo: NREL)

Economics of PV Systems

PV system cost-effectiveness will depend on system installation cost, system performance, and local electric rates. A PV system can be a substantial investment. As with any investment, careful planning will help you make the right decisions for your home or business. Before you decide to buy a PV system, there are some things to consider:

First, PV produces power intermittently because it works only when the sun is shining. This is not a problem for grid-connected PV systems because any additional electricity required is provided by your utility. In the case of remote or stand-alone systems, batteries can be purchased to store energy for later use.

Second, if you live near existing power lines, PV-generated electricity is usually more expensive than conventional utility-supplied electricity. Although PV now costs less than 1 percent of what it did in the 1970s, the amortized price over the life of the system is still about 25 cents per kilowatt-hour. This is double to quadruple what most people pay for electricity from their utilities. A solar rebate program and net metering can help make PV more affordable, but they can't match today's price for utility electricity in most cases.

Finally, unlike the electricity you purchase monthly from a utility, PV power requires a high initial investment. This means that buying a PV system is like paying years of electric bills up front. Your monthly electric bills will go down, but the initial expense of PV may be significant. By financing your PV system, you can spread the cost over many years, and rebates can also lighten your financial load.

The value of your PV system's electricity depends on how much you pay for electricity now and how much your utility will pay you for any excess power that you generate. With net metering, the PV system’s electricity is metered back to the utility, which offsets the electricity coming from the utility. You can use the tools found at or similar sites to estimate how much electricity your PV system will produce and how much that electricity will be worth. Actual energy production from your PV system may vary by up to 20 percent from these figures, depending on your specific geographic location, the angle and orientation of your system, the quality of the components, and the quality of the installation. Also, you may not get full retail value for excess electricity produced by your system on an annual basis, even if your utility does offer net metering. Be sure to discuss these issues with your PV provider. Request a written estimate of the average annual energy production from the PV system. However, even if an estimate is accurate for an average year, actual electricity production will fluctuate from year to year because of natural variations in weather and climate.

Keep in mind that PV works best in an energy-efficient building. So, measures such as adding insulation and sealing air leaks, as well as purchasing energy-efficient lighting, and appliances, are essential to reduce your home’s overall electricity use before installing a PV system. For more information, see the Arkansas Energy Office publication Consumer’s Guide to Lower Energy Bills.

How much does a PV system cost?

No single answer applies in every case. But solar rebates and other incentives will always reduce the cost. Your price depends on a number of factors, including whether your home is under construction and whether PV is integrated into the roof or mounted on top of an existing roof. The price also depends on the PV system rating, manufacturer, retailer, and installer. The size of your system may be the most significant factor in any measurement of costs versus benefits. A 2-kilowatt system that meets nearly all the needs of a very energy-efficient home will likely cost $8 to $10 per watt. At the high end, a 5-kilowatt system that completely meets the energy needs of a large conventional home can cost $30,000 to $40,000 installed, or $6 to $8 per watt. These prices are rough estimates; your costs depend on your system's configuration, your equipment options, and other factors. Your local PV dealers can give you more accurate cost information.

Source: U.S. Department of Energy

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