Understanding the Basics of Solar Energy

The sun produces a tremendous amount of energy. The solar radiation that reaches the Earth’s surface is estimated to be twice as much as will ever be obtained from all of the Earth’s non-renewable resources of coal, oil, natural gas, and mined uranium combined.

Fortunately, the sun provides this abundant energy free of charge and without harmful effects on the environment, making solar one of the most beneficial and sustainable forms of energy we can use. A variety of residential solar panel installation technologies are available to capture this energy for practical purposes.

This article covers the basics of how solar energy works and how you might want to engage with it.

How Solar Energy Works

Many people are familiar with photovoltaic cells, or solar panels, found on things like spacecraft, rooftops, and handheld calculators. The cells are made of semiconductor materials like those found in computer chips. When sunlight knocks electrons loose from their atoms, the electrons flow through the material to produce electricity. This process of converting light (photons) into electricity (voltage) is called the photovoltaic (PV) effect.

Solar energy can work in two different ways: solar thermal and solar photovoltaic. Solar thermal systems heat water for your home or office using heat from the sun, while solar photovoltaic systems generate electricity from sunlight. Both use panels made up of many cells, but each type works differently.

Solar Thermal Systems

There are several types of solar thermal systems, but they all work the same way: sunshine heats a liquid inside the system’s collectors, which resemble large skylights. The warmed liquid is then pumped through a closed-loop plumbing system, where it transfers its heat to water stored in a tank for later use, or directly to your home’s domestic hot water system for immediate use. And if you ever need to move or make significant changes to your roof, solar panel removal and reinstallation services can safely remove and reinstall your panels.

Solar Photovoltaic Systems

The primary mechanism of photovoltaic cells involves the absorption of light by semiconductors, which releases electrons. These electrons flow through an external circuit to produce electricity. Because the current is generated directly from absorbed photons, PV systems don’t require a heat engine or moving parts.

A solar photovoltaic system is typically one or more panels made up of PV cells that convert sunlight into electricity. PV cells are made from semiconductor materials such as silicon, gallium arsenide, and copper indium selenide/sulfide layers. When light strikes the cell, electrical charges move toward opposite sides of the cell and generate a voltage difference, or electric potential. For those looking to get more out of their systems, adding solar battery storage can provide additional energy security and efficiency.

The Economics of Solar Energy

The cost of power from solar cells has dropped by more than 70% in the last decade alone. The price of a residential solar installation has fallen from upwards of $50,000 in 2002 to under $18,000 in 2022, and costs have continued to improve as solar moves to the forefront of the North American energy market.

Federal and state programs have also supported solar adoption. In Arizona, homeowners can claim the Residential Arizona Solar Energy Tax Credit — 25% of the system cost, up to $1,000 — along with state sales- and property-tax exemptions. (Federal solar incentives changed significantly in 2025, so see our guide to Arizona solar incentives for the current picture.) And in case of damage, solar panel repair services keep your system running efficiently.

The benefits of solar are especially evident in warmer, drier regions that see a lot of sunshine and little overcast. In places like Central California, Texas, and Arizona, solar energy installations are especially sound financial investments.

The Solar Export Rate

Another key concept behind the economics of going solar is the export rate — the credit you receive for energy your solar system sends back into the grid during periods of excess production. In Arizona, utilities handle this through net billing, crediting you at a set export rate for the surplus energy you export. That credit reduces your bill and factors into the return-on-investment calculations for households considering solar.

How To Switch to Solar Energy

Making the switch to solar is a big decision that can save you a lot of money in the long run. Solar is a clean, renewable resource that can lower your energy bill and reduce your carbon footprint. If you’re thinking about making the switch, here are a few things to know.

There are a few different ways to go solar. You can purchase solar panels and have them installed on your home, or you can lease solar panels from a company. Some areas also offer community solar programs, which let you receive solar power from a shared, central location.

Solar prices have fallen dramatically in recent years, making it a more affordable option for many homeowners. The upfront cost can still be a barrier for some, but several financing options are available to help make solar more affordable.

When you switch to solar, you produce your own electricity and rely less on the grid. Plus, affordable solar maintenance means you won’t have to worry much about your panels once they’re installed.

Making the switch is a big decision, but it can save you money and help the environment. If you’re ready, you can request service. Our professional installation team will work with you to find the best solar solution for your home. Saguaro Solar is a full-service solar company, so we can help with every step of the process from start to finish. Contact us today to learn more about solar energy and how we can help you make the switch.