How Solar Works

Solar Usage Is On The Rise, So What’s All The Hype All About?

In 2020 energy produced from solar accounted for only 3% of the total electrical power generated in the US. That’s not a lot, but the number of homes taking advantage of solar is steadily increasing primarily due to lowered production costs, significant technology improvements, and people like you stepping up and taking control of your power.

The sun doesn’t only provide the warmth and light necessary for life to exist on earth, but it also sends down an unbelievable amount of energy every second of every day. Little orphan Annie was right — the sun most definitely will come out tomorrow. So, how do we take the light from the sun and turn it into energy? Spolier alert: This is where we shine.

Solar energy (or solar power) is the energy we generate from the sun’s light. Through a process known as the photovoltaic effect we can convert energy from the sun’s rays into electricity that can power our lights, computers, businesses, TVs, cars, refrigerators, semi-trucks, refrigerated semi-trucks, etc, etc.

Solar panels are made up of dozens of solar cells—which is where the magic happens. Energy from the sun is captured and converted into an electric current. This new electricity produced from your solar panels is still in Direct Current (DC) form which means we still have some work to do before we can use it for most things in our homes.

I’ve Got DC Power Now What?

The only problem with DC (Direct Current) power is that in the United States our homes aren’t equipped to use DC power—we are configured to use Alternating Current or AC. So, how do we take the power from a solar panel and transform it into something we can use in our homes and businesses? An inverter is a handy tool that converts Direct Current (DC) to Alternating Current (AC). Think of an inverter as a translator. It essentially takes power written in a different language, changes it a little bit, and makes it useable.

Once the inverter has done its job then we can use the power in our homes to run all the things in our lives that require electricity. Pretty cool, right? Yes. Yes, it is.

Partly Cloudy With A Chance Of Light

At night or during cloudy days when sunlight isn’t readily available, homeowners with a grid connection can tap into your local power grid to make up the difference and keep their lights on. Some homeowners choose to become completely self-sufficient with a backup battery system that will charge during the day to cover all power needs during those low-producing times. Backup battery systems are not always included in solar designs, but they come in handy as a temporary backup if the grid goes down. For example, on a small scale, a laptop computer has a battery so when it’s not plugged into a power source it still works. It’s a great temporary solution so you’re not required to be constantly be plugged into the wall. Same idea—You have backup!

Being grid-tied does have its benefits, though. Connecting to your local power grid with energy producing solar panels allows you to start saving money via a program available in most states called Net Metering.

My Meter Is Running Backwards, Cha-Ching

When your solar panels are generating more power than your home is currently using (think during the day when everyone is away from the home and the sun is blasting bright, beautiful energy on your roof) your connection to the grid, in most states, allows you to send your extra energy back to the grid and get paid for it. This is Net Metering. Most of the time these credits even out the costs of power consumed during the evening or on cloudy days throughout the year.

Can I completely disconnect from the Power Grid?

Yes! Well, no. Kind of—it depends on the local regulations and laws in your area.

Some areas require homes to maintain a constant connection to the grid to more accurately estimate loads and optimize energy flow. Other areas of the country have no problem with you taking your home off-line. If you are shooting for complete energy self-reliance you will need a backup battery to store energy for those times when it is cloudy outside, or after sunset.

Appropriately sizing your battery backup is definitely not a one-size-fits-all adventure, but our solar experts are trained to help you correctly calculate your system size as well as any battery backup options you want to explore.

Sizing Solar Is No Easy Task

Every homeowner we help make the switch to solar receives a completely custom design to meet their needs. Sometimes this becomes more of an art than a science, especially in situations where we need to be creative with panel placement (read more about panel placement and orientation here <link to orientation article>).

To get things started we will use your last month’s power bill to estimate your average usage over the last 12 month period. We use this information to roughly calculate how many panels you will need. We’ll immediately start to optimize your solar design to meet the daily usage needs taking into consideration special requests you may have. Our goal is to create a solar design that slightly exceeds your daily usage so you can cover all your power needs and have the ability to take advantage of any net metering programs in your area.

Did You Say Tax Credits?

We will be the first to suggest you consult a tax professional because we don’t have any tax strategists on staff here! But here’s what we can share:

  • Current federal tax credits for 2022 are 26%
  • The tax credit goes against your tax liability and is not refundable if you don’t owe taxes
  • Federal tax credits will drop to 22% for any systems installed after December 31 , 2022.

State and local programs can vary wildly. The current federal tax credit allows you to reduce your tax liability dollar-for-dollar up to the calculated amount of your solar system. For example: if your solar design costs $50k and the tax credit is at 26% then your non-refundable tax credit would be around $13k.

Tax credits are factored into your tax return at the time you do your taxes, so it’s not something you should expect to pocket on the day you decide to make the switch. Taxes are tricky, and we always recommend reaching out to your favorite tax professional with questions specific to your situation. You can dive deeper into the Investment Tax Credit here <link to tax credit article>.

Conclusion

We will walk you through this process of how solar works, how it can benefit your home or business, and how you can get a solar design that meets your goals. Having a good idea of how solar works can help make the switch to solar simple.

Hopefully, when solar comes up at your next neighborhood BBQ you can pull out some of these golden knowledge nuggets and throw them on the Conversational Barbie!

Lumio is your source for helping you learn how solar works and guiding you through this process. Reach out to a Lumio solar expert today to get started.

Qualified customers can switch to solar with no money down and no payments until after your system is installed. Give one of our solar experts a call today at +1.888.586.4649

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ABOUT THE AUTHOR

Kevin Wallace

Director of Partner Marketing

A modern renaissance man, with an unquenchable desire to do everything. At the office he's known as The Professional.