Solar panels, also known as photovoltaic (PV) panels, are made of solar cells, typically silicon. When sunlight (photons) hits these cells, it creates an electric field, causing electrons to flow and generate direct current (DC) electricity through a process called the "photovoltaic effect." An inverter then converts this DC electricity into alternating current (AC) electricity, which is the type used to power most homes and businesses. Any excess electricity your panels produce can be sent back to the utility grid (often through a process called net metering) or stored in a battery, if you have one. .

The cost of a solar panel system varies significantly based on factors like your location, the size of the system needed for your energy consumption, the quality of the panels and components, and installation fees. Generally, a residential system can range from $10,000 to $30,000 or more before incentives. However, significant government incentives (like the federal solar tax credit), state programs, and local rebates can substantially reduce this upfront cost. Most homeowners find that the payback period (the time it takes for savings to offset the initial investment) is typically 5 to 10 years. After this period, your solar panels essentially generate free electricity, leading to substantial long-term savings on your utility bills and potentially increasing your home's value.