Solar Energy

What Is Solar Energy and How Does It Work?

Gexa Energy
April 26, 2023
minutes read
Gexa Energy
Publication Date:
June 1, 2023
Last updated:
July 13, 2023

Solar energy is a great asset for homeowners who are looking for a way to reduce their carbon footprint and harness clean, renewable energy. It is seeing rapid growth in the United States as more people are learning of its advantages. In the last decade alone, solar has experienced an average annual growth rate of 33%.  

Thanks to strong federal policies like the Clean Electricity Investment Tax Credit, rapidly declining costs, and increasing demand across the private and public sector for clean electricity, there is now enough installed solar capacity to power 23.3 million homes. The more homeowners know about residential solar power, the more informed their energy decisions will be.  

Interested in getting a FREE solar quote? Start Your Quote Now!

Let’s learn more about solar energy and how it can benefit you and your household.

What is solar energy?

Solar energy is generated by harnessing the sun's light and heat and converting it into electrical or thermal energy to power homes, commercial spaces, factories—basically anywhere that uses electricity.

Is solar energy renewable?

Yes! In fact, it is one of the best forms of renewable energy because it regenerates quickly and has a fast production time.  

Did you know? The U.S. Department of Energy states that “the amount of sunlight that strikes the earth’s surface in an hour and a half is enough to handle the entire world’s energy consumption for a full year.”  

How does solar energy work?

Solar energy is harnessed and typically produced in two ways: photovoltaics or concentrating solar power.

Photovoltaics. Solar power panels use photovoltaic (PV) cells—made of various semiconductor materials—to capture sunlight and transform it into direct current electricity. When the sun shines on the solar panel, the rays are absorbed by the semiconductors and converted into electricity. Many residential solar power panels have inverters that convert direct current electricity to alternating current electricity that can power your home’s systems and appliances. Learn more about how solar panels work.

You can also find PV panels in your solar-powered outdoor market lights or portable phone charger. These items use the same process as solar panels — just on a smaller scale.

Concentrating solar power. You have probably seen concentrated solar power (CSP) plants if you live in West Texas or if you’ve driven through the Southwest states, like New Mexico, Arizona, or California. CSP uses “mirrors to reflect and concentrate sunlight onto receivers that collect solar energy and convert it to heat” ( That heat can be stored for use in the future, or it can be used to heat water, which creates steam to spin turbines—eventually generating electricity.

Does solar power work on cloudy days?

Solar energy can be utilized on cloudy days because PV solar power panels can use direct and indirect light. However, the panels’ electricity production will be 10 to 25 percent lower —simply because the sunlight is not direct. The heavier the cloud cover, the lower the production levels.

Solar batteries and net meters can help homeowners store excess energy or credits for use during other non-peak hours. Gexa can help map out a complete solar solution for your home. Get solar and a solar buyback plan all with the same trusted provider. Start your solar journey today!

What are the advantages of solar energy?

Here are some benefits of solar energy:

  • Solar energy is considered to be one of the cleanest forms of energy, as there are no greenhouse gas emissions or waste byproducts resulting from the generation of solar energy.* For context, worldwide carbon dioxide emissions related to energy reach 36.3 billion tonnes in 2021, according to IEA.  
  • You won’t have to worry about noises coming from your home solar power system because solar panel energy production is a completely silent process.*  
  • It is a renewable and unlimited resource.
  • Solar energy is generally available in most locations, although location can impact how accessible solar energy is in your area. People who live in remote locations can install a standalone, or off-grid, solar power system for their home. (If you decide to do this, you’ll need to purchase a battery bank to store energy for later use.)

What are the disadvantages of solar energy?

Let’s unpack some of the potential downsides of solar energy:  

  • The upfront cost of installing solar panels on your home can be significant, but fortunately there are financing options available that can cover the entire initial cost. We’ll go into more detail about costs in the next section.
  • If your roof needs repair, it can be an arduous (and expensive) process because the panels will need to be professionally removed and reinstalled.
  • If you live in a cloudy and rainy climate, solar power can be unreliable. Thankfully, you can purchase a battery bank to store energy for later use.
  • Discarding solar panels can potentially introduce hazardous materials into the environment. The good news is the average lifespan of solar panels is approximately 25 years. There are a few states that have, or are exploring, recycling programs for solar panels to safely combat this issue.


Are solar power batteries necessary with solar panels?

If you live in a region that has ample sunny days (West Texas, we’re looking at you), you may not need solar power battery storage. However, having a battery to store extra solar energy could be beneficial regardless of your location. If a storm hits or your area encounters days of heavy cloud cover, solar power batteries will help power your household until the sun comes out again. Plus, they provide backup at night when your solar panels aren’t producing.

How much does solar energy cost?

Installing residential solar power panels can range from $15,000 to $25,000 on average in the United States. While that’s not cheap, you may recoup these costs in 5 to 15 years (this is also called a payback period). Considering that the lifespan of solar panels is typically 25 years, you’ll essentially be making a financial gain after the payback period for the remainder of the panels’ life.

If you don’t plan on living in your home for 25 years, no problem. While taking your solar panels with you when you move is technically doable, it’s not advised simply because removal and reinstallation at the new house can be costly. Solar-power homes often have higher values than homes without; a 2019 Zillow study showed that homes with solar power “sold for 4.1 percent more on average than comparable homes without solar power.” So, even though you might lose out on those financial gains if you move, you could make up that cost by selling your home for a higher price.

Are there tax credits for solar energy?

If you purchase and install PV solar power panels, you may be able to take advantage of the federal residential solar energy credit. To be eligible for the 30% tax credit, your panels need to have been purchased and installed on a primary or secondary residence between January 1, 2022, and December 31, 2032. The credit decreases to 26% for systems installed in 2033, 22% for systems installed in 2034, and expires in 2035 unless Congress renews it. This federal benefit can also be used by people who have installed off-grid solar panels. Learn more about this tax credit and how to claim it.

On a local note, homeowners can enjoy Texas solar incentives, such as an exemption on their property taxes from the increased value that installing solar panels adds to their homes.  

Go Green with Gexa

Gexa can help map out a complete solar solution for your home. Get solar and solar buyback plan all with the same trusted provider. Start your solar journey today!  

By signing up with Gexa, you help protect the environment by supporting the development of renewable energy sources throughout Texas and the country. Shop 100% green residential electricity plans today.

*NextEra Energy Resources Solar Energy Booklet

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Gexa Energy purchases renewable energy credits (RECs) from renewable generation resources throughout North America to match 100% of the energy sold under your electric plan. The RECs Gexa purchases represent the renewable attributes of power generated from a variety of renewable energy sources, including, but not limited to, the sun, wind, geothermal, hydroelectric, wave or tidal energy, and biomass or biomass-based waste products, including landfill gas.