How Solar Energy Works

Solar energy—power from the sun—is a vast and inexhaustible resource. Once a system is in place to convert it into useful energy, the fuel is free and will never be subject to the ups and downs of energy markets. Furthermore, it represents a clean alternative to the fossil fuels that currently pollute our air and water, threaten our public health, and contribute to global warming. Given the abundance and the appeal of solar energy, this resource is poised to play a prominent role in our energy future.

In the broadest sense, solar energy supports all life on Earth and is the basis for almost every form of energy we use. The sun makes plants grow, which can be burned as "biomass" fuel or, if left to rot in swamps and compressed underground for millions of years, in the form of coal and oil. Heat from the sun causes temperature differences between areas, producing wind that can power turbines. Water evaporates because of the sun, falls on high elevations, and rushes down to the sea, spinning hydroelectric turbines as it passes. But solar energy usually refers to ways the sun's energy can be used to directly generate heat, lighting, and electricity.

The Solar Resource

The amount of energy from the sun that falls on Earth's surface is enormous. All the energy stored in Earth's reserves of coal, oil, and natural gas is matched by the energy from just 20 days of sunshine. Outside Earth's atmosphere, the sun's energy contains about 1,300 watts per square meter. About one-third of this light is reflected back into space, and some is absorbed by the atmosphere (in part causing winds to blow).

U.S. Solar Resources (Source: NREL)

By the time it reaches Earth's surface, the energy in sunlight has fallen to about 1,000 watts per square meter at noon on a cloudless day. Averaged over the entire surface of the planet, 24 hours per day for a year, each square meter collects the approximate energy equivalent of almost a barrel of oil each year, or 4.2 kilowatt-hours of energy every day. Deserts, with very dry air and little cloud cover, receive the most sun—more than six kilowatt-hours per day per square meter. Northern climates, such as Boston, get closer to 3.6 kilowatt-hours. Sunlight varies by season as well, with some areas receiving very little sunshine in the winter. Seattle in December, for example, gets only about 0.7 kilowatt-hours per day. It should also be noted that these figures represent the maximum available solar energy that can be captured and used, but solar collectors capture only a portion of this, depending on their efficiency. For example, a one square meter solar electric panel with an efficiency of 15 percent would produce about one kilowatt-hour of electricity per day in Arizona.

Passive Solar Design for Buildings

One simple, obvious use of the sun is to light and heat our buildings. Residential and commercial buildings account for more than one-third of U.S. energy use.[1] If properly designed, buildings can capture the sun's heat in the winter and minimize it in the summer, while using daylight year-round. Buildings designed in such a way utilize passive solar energy—a resource that can be tapped without mechanical means to help heat, cool, or light a building. Simple design features such as properly orienting a house toward the south, putting most windows on the south side of the building, skylights, awnings, and shade trees are all techniques for exploiting passive solar energy. Buildings constructed with the sun in mind can be comfortable and beautiful places to live and work.

Solar Heat Collectors

Besides using design features to maximize their use of the sun, some buildings have systems that actively gather and store solar energy. Solar collectors, for example, sit on the rooftops of buildings to collect solar energy for space heating, water heating, and space cooling. Most are large, flat boxes painted black on the inside and covered with glass. In the most common design, pipes in the box carry liquids that transfer the heat from the box into the building. This heated liquid—usually a water-alcohol mixture to prevent freezing—is used to heat water in a tank or is passed through radiators that heat the air.

Oddly enough, solar heat can also power a cooling system. In desiccant evaporators, heat from a solar collector is used to pull moisture out of the air. When the air becomes drier, it also becomes cooler. The hot moist air is separated from the cooler air and vented to the outside. Another approach is an absorption chiller. Solar energy is used to heat a refrigerant under pressure; when the pressure is released, it expands, cooling the air around it. This is how conventional refrigerators and air conditioners work, and it's a particularly efficient approach for home or office cooling since buildings need cooling during the hottest part of the day. These systems are currently at work in humid southeastern climates such as Florida.
Solar collectors were quite popular in the early 1980s, in the aftermath of the energy crisis. Federal tax credits for residential solar collectors also helped. In 1984, for example, 16 million square feet of collectors were sold in the United States, but when fossil fuel prices dropped and tax credits expired in the mid-1980s, demand for solar collectors plummeted. By 1987, sales were down to only four million square feet. Most of the more than one million solar collectors sold in the 1980s were used for heating hot tubs and swimming pools.

Today, a small number of U.S. homes and businesses use solar water heaters.[2] In other countries, solar collectors are much more common; Israel requires all new homes and apartments to use solar water heating, and 92 percent of the existing homes in Cyprus already have solar water heaters.  But the number of Americans choosing solar hot water could rise dramatically in the next few years as a result of federal tax incentives that can reduce their cost by as much as 30 percent.

According to the U.S. Department of Energy, water heating accounts for about 15 percent of the average household's energy use.[3] As natural gas and electricity prices rise, the costs of maintaining a constant hot water supply will increase as well. Homes and businesses that heat their water through solar collectors could end up saving as much as $250 to $500 per year depending on the type of system being replaced. 

Solar Thermal Concentrating Systems

By using mirrors and lenses to concentrate the rays of the sun, solar thermal systems can produce very high temperatures—as high as 3,000 degrees Celsius. This intense heat can be used in industrial applications or to produce electricity. One of the greatest benefits of large scale solar thermal systems is the possibility of storing the sun’s heat energy for later use, which allows the production of electricity even when the sun is no longer shining. Properly sized storage systems, commonly consisting of molten salts, can transform a solar plant into a supplier of continuous baseload electricity. Solar thermal systems now in development will be able to compete in output and reliability with large coal and nuclear plants.

Solar concentrators come in three main designs: parabolic troughs, parabolic dishes, and central receivers. The most common is parabolic troughs—long, curved mirrors that concentrate sunlight on a liquid inside a tube that runs parallel to the mirror. The liquid, at about 300 degrees Celsius, runs to a central collector, where it produces steam that drives an electric turbine.

Parabolic trough concentrators. Source: NREL

Parabolic dish concentrators are similar to trough concentrators, but focus the sunlight on a single point. Dishes can produce much higher temperatures, and so, in principle, should produce electricity more efficiently.

A promising variation on dish concentrating technology uses a stirling engine to produce power. Unlike a car's internal combustion engine, in which gasoline exploding inside the engine produces heat that causes the air inside the engine to expand and push out on the pistons, a stirling engine produces heat by way of mirrors that reflect sunlight on the outside of the engine. These dish-stirling generators produce about 30 kilowatts of power, and can be used to replace diesel generators in remote locations.

The third type of concentrator system is a central receiver. One such plant in California features a "power tower" design in which a 17-acre field of mirrors concentrates sunlight on the top of an 80-meter tower. The intense heat boils water, producing steam that drives a 10-megawatt generator at the base of the tower. The first version of this facility, Solar One, operated from 1982 to 1988 but had a number of problems. Reconfigured as Solar Two during the early to mid-1990s, the facility is successfully demonstrating the ability to collect and store solar energy efficiently.[4] Solar Two's success has opened the door for further development of this technology. 

To date, the parabolic trough has had the greatest commercial success of the three solar concentrator designs, in large part due to the nine Solar Electric Generating Stations (SEGS) built in California's Mojave Desert from 1985 to 1991. Ranging from 14 to 80 megawatts and with a total capacity of 354 megawatts, each of these plants is still operating effectively.[5] Nevada Solar One, a 75 MW parabolic trough plant that was built near Boulder City, Nevada in 2007, offers another example of recent success in the burgeoning U.S. solar thermal industry.[6]

More commercial-scale solar concentrator projects are under development in the United States, thanks mostly to various state policies and incentives. To help meet California’s 20 percent renewable electricity standard, for example, almost 5,000 MW of solar thermal capacity are under review by the state’s Energy Commission and Bureau of Land Management. Additionally, more than 3,500 MW of capacity have been announced or agreed to under power purchase agreements between major utilities and power-producing companies.  As of 2009, the largest project awaiting approval is a 1,000 MW plant to be owned by Solar Millenium, LLC.[7] Concentrating solar thermal is on its way to becoming a strong competitor in utility-scale energy production.


In 1839, French scientist Edmund Becquerel discovered that certain materials would give off a spark of electricity when struck with sunlight. This photoelectric effect was used in primitive solar cells made of selenium in the late 1800s. In the 1950s, scientists at Bell Labs revisited the technology and, using silicon, produced solar cells that could convert four percent of the energy in sunlight directly to electricity. Within a few years, these photovoltaic (PV) cells were powering spaceships and satellites.

The most important components of a PV cell are two layers of semiconductor material generally composed of silicon crystals. On its own, crystallized silicon is not a very good conductor of electricity, but when impurities are intentionally added—a process called doping—the stage is set for creating an electric current. The bottom layer of the PV cell is usually doped with boron, which bonds with the silicon to facilitate a positive charge (P). The top layer is doped with phosphorus, which bonds with the silicon to facilitate a negative charge (N).

The surface between the resulting "p-type" and "n-type" semiconductors is called the P-N junction (see the diagram below). Electron movement at this surface produces an electric field that only allows electrons to flow from the p-type layer to the n-type layer.

When sunlight enters the cell, its energy knocks electrons loose in both layers. Because of the opposite charges of the layers, the electrons want to flow from the n-type layer to the p-type layer, but the electric field at the P-N junction prevents this from happening. The presence of an external circuit, however, provides the necessary path for electrons in the n-type layer to travel to the p-type layer. Extremely thin wires running along the top of the n-type layer provide this external circuit, and the electrons flowing through this circuit provide the cell's owner with a supply of electricity.
Most PV systems consist of individual square cells averaging about four inches on a side. Alone, each cell generates very little power (less than two watts), so they are often grouped together as modules. Modules can then be grouped into larger panels encased in glass or plastic to provide protection from the weather, and these panels, in turn, are either used as separate units or grouped into even larger arrays.

The three basic types of solar cells made from silicon are single-crystal, polycrystalline, and amorphous.

• Single-crystal cells are made in long cylinders and sliced into round or hexagonal wafers. While this process is energy-intensive and wasteful of materials, it produces the highest-efficiency cells—as high as 25 percent in some laboratory tests. Because these high-efficiency cells are more expensive, they are sometimes used in combination with concentrators such as mirrors or lenses. Concentrating systems can boost efficiency to almost 30 percent. Single-crystal accounts for 29 percent of the global market for PV.[8]

• Polycrystalline cells are made of molten silicon cast into ingots or drawn into sheets, then sliced into squares. While production costs are lower, the efficiency of the cells is lower too—around 15 percent. Because the cells are square, they can be packed more closely together. Polycrystalline cells make up 62 percent of the global PV market.[9]

• Amorphous silicon (a-Si) is a radically different approach. Silicon is essentially sprayed onto a glass or metal surface in thin films, making the whole module in one step. This approach is by far the least expensive, but it results in very low efficiencies—only about five percent.[10]

A number of exotic materials other than silicon are under development, such as gallium arsenide (Ga-As), copper-indium-diselenide (CuInSe2), and cadmium-telluride (CdTe). These materials offer higher efficiencies and other interesting properties, including the ability to manufacture amorphous cells that are sensitive to different parts of the light spectrum. By stacking cells into multiple layers, they can capture more of the available light. Although a-Si accounts for only five percent of the global market, it appears to be the most promising for future cost reductions and growth potential.

In the 1970s, a serious effort began to produce PV panels that could provide cheaper solar power. Experimenting with new materials and production techniques, solar manufacturers cut costs for solar cells rapidly, as the following graph shows. 

One approach to lowering the cost of solar electric power is to increase the efficiency of cells, producing more power per dollar. The opposite approach is to decrease production costs, using fewer dollars to produce the same amount of power. A third approach is lowering the costs of the rest of the system. For example, building-integrated PV (BIPV) integrates solar panels into a building's structure and earns the developer a credit for reduced construction costs.

Photovoltaic costs (Source: NREL)

Innovative processes and designs are continually reaching the market and helping drive down costs, including string ribbon cell production, photovoltaic roof tiles, and windows with a translucent film of a-Si. Economies of scale from a booming global PV market are also helping to reduce costs.

Historically, most PV panels have been used for off-grid purposes, powering homes in remote locations, cellular phone transmitters, road signs, water pumps, and millions of solar watches and calculators. Developing nations see PV as a way to avoid building long and expensive power lines to remote areas. And every year, experimental solar-powered cars race across Australia and North America in heated competitions.

More recently, thanks to lower costs, strong incentives, and net metering policies, the PV industry has placed more focus on home, business, and utility-scale systems that are attached to the power grid. In some locations, it is less expensive for utilities to install solar panels than to upgrade the transmission and distribution system to meet new electricity demand. In 2005, for the first time ever, the installation of PV systems connected to the electric grid outpaced off-grid PV systems in the United States.[11] As the PV market continues to expand, the trend toward grid-connected applications will continue.

This distributed-generation approach provides a new model for the utilities of the future. Small generators, spread throughout a city and controlled by computers, could replace the large coal and nuclear plants that dominate the landscape now.

The Future of Solar Energy

Solar energy technologies are poised for significant growth in the 21st century. More and more architects and contractors are recognizing the value of passive solar and learning how to effectively incorporate it into building designs. Solar hot water systems can compete economically with conventional systems in some areas, and federal tax incentives are making them even more affordable for homes and businesses. And as the cost of solar PV continues to decline, these systems will penetrate increasingly larger markets. In fact, the solar PV industry aims to provide half of all new U.S. electricity generation by 2025.[12]

Aggressive financial incentives in Germany and Japan have made these countries global leaders in solar deployment for years. But the United States is catching up thanks to a combination of strong state-level policy support and federal tax incentives. At the state level, California is leading the way. In 2006, the state’s Public Utility Commission approved the California Solar Initiative, which dedicates $3.2 billion over 11 years to develop 3,000 megawatts of new solar electricity, equal to placing PV systems on a million rooftops.

Other states are following suit. Sixteen states and Washington, DC have specific requirements for solar energy and/or distributed generation as part of their renewable electricity standards. New Jersey, for example, requires that 2.1 percent of all electricity come from solar energy sources by 2021. Many more states support solar deployment by offering offer rebates, production incentives, and tax incentives, as well as loan and grant programs. Federal tax incentives are also providing a strong boost to the industry. The 2008 economic stimulus bill (Emergency Economic Stabilization Act of 2008) includes an eight year extension (through 2016) of a 30 percent tax credit, with no upper limit, for the purchase and installation of residential PV systems and solar water heaters.[13]

As the solar industry continues to expand, there will be occasional bumps in the road. For example, in 2007 and 2008, demand for manufacturing-quality silicon from the solar energy and semiconductor industries led to shortages that temporarily increased PV costs.[14} In addition, some utilities continue to put up roadblocks for grid-connected PV systems. But these problems can be overcome, and solar energy can play an increasingly integral role in ending our national dependence on fossil fuels, combating the threat of global warming, and securing a future based on clean and sustainable energy.


1. Energy Information Administration (EIA). 2005. Annual energy outlook 2004.
2. International Scientific Council for Island Development (INSULA). Large scale utilization of solar energy in Cyprus.
3. Deyette, J., and K. Graf. 2005. How it works: Solar electricity generation. In Catalyst: A Magazine of the Union of Concerned Scientists 4(2): 18-19.
4. Concentrating Solar Power Program. 2000. Solar Two demonstrates clean power for the future. Washington, DC: U.S. Department of Energy.
5. Solar Energy Technologies Program. 2006. Solar energy technologies program: Multi-year program plan 2007-2011. Washington, DC: U.S. Department of Energy.
6. Cleetus, R., Clemmer, S., and Friedman, D. 2009. Climate 2030: A National Blueprint for a Clean Energy Economy.
7. California Energy Commission. Large Solar Energy Projects.
8. See Note 5.
9. Ibid
10. Ibid
11. The Prometheus Institute. 2006. U.S. market analysis. PV News 25(5): 4-5. 
12. Solar Energy Industries Association (SEIA). 2004. Our solar power future: The U.S. photovoltaics industry roadmap through 2030 and beyond.
13. Energy Star. Federal Tax Credits for Energy Efficiency
14. See Note 5. 

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