Solar Power System (A Comprehensive Guide) -
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Solar Power System

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The article discusses the growth and benefits of solar power, which now accounts for about 10% of the world's electricity. Solar power is renewable and reduces electricity costs, making it appealing to environmentally conscious homeowners. It explains how solar panels work, converting sunlight into electricity through photovoltaic cells, and details different types of residential solar systems: grid-tied, off-grid, and hybrid.

Grid-tied systems use the utility grid as a backup, while off-grid systems are self-sufficient and require batteries for storing excess power. Hybrid systems combine solar panels with a battery backup. The article also explains the cost factors of a solar system, including the type of panels and installation, with prices ranging from $3,500 to $35,000. It mentions the federal solar tax credit, offering a credit for a percentage of the solar installation cost, and discusses the influence of electricity costs by state on the overall cost of a solar power system.


Since its introduction to the commercial market in 1954, the use of solar power has been steadily increasing and now makes up about 10% of the world's electricity supply along with wind energy.

Solar power is a form of clean, renewable energy that can not only reduce or take away electricity costs but also acts as a way for environmentally conscious homeowners to reduce their carbon footprint.

What Is Solar Power?

Solar power is energy that is drawn from the sun's ultraviolet rays in order to provide a renewable source of heat and electricity. This conversion of the sun’s energy is achieved through the use of a solar power system.

solar panel system

How Does Solar Power Work?

Solar Panels

The most commonly used method to collect solar energy is through the use of roof-mounted solar panels equipped with photovoltaic (PV) technology.

A solar PV system generates electricity through the use of the photovoltaic effect, which is the conversion of sunlight into usable electricity by using a semiconducting material. 

The photovoltaic panels absorb sunlight that comes into contact with the solar cells on the panel's surface, which causes a reaction within that ends up generating electricity in the form of direct current.

Depending on the manufacturing process, certain types of panels can end up being more efficient at this conversion of energy than others.


The built-up electricity is then sent to the solar inverter for the direct current (DC, which can only flow in one direction) to be converted into alternating current (AC, which can flow in multiple directions). This can then be used to power multiple appliances at once.

There are different types of solar inverters, namely string inverters, power optimizers, and micro-inverters. These are the most commonly used for residential solar power systems. With a micro inverter solar system, an inverter is fitted to each panel and they then work to convert the DC quickly and efficiently.

Types of Residential Solar Power Systems

There are different types of solar power system installations, and the system you choose to go with is dependent on what your energy requirements are or the kind of home you possess, among other things.

solar system for home

Grid-Tied Solar Panel System

Grid-tied solar refers to a solar panel system that’s used in tandem with your utility grid, allowing you to alternate between the two sources of energy whenever you need to. This is most useful during nighttime when the panels are not capable of producing any electricity.

This is the most commonly used type of residential solar power system. This is because many households can’t rely solely on solar panels for energy due to the size of the home and because the cost of purchasing a big enough system for that home may be more than most are prepared to pay.

In addition to that, owning a grid-tied system comes with financial benefits that can be seen right away. This comes in the form of net metering.

Since grid-tied solar systems don’t come with solar batteries, there won't be a place for any excess power produced during the day to be stored. This is where net metering comes into play. Net metering is a billing system that offers you credit on your electricity utility in exchange for the excess power produced by your PV system.

You can also look into a backup generator for your solar system to keep your lights on even if your main generator fails.

This works because the solar inverter that comes with this PV system is connected to the utility grid, hence the name.

The downside to owning this type of system is that in the event of a grid-wide blackout, your solar panel system will be switched off as well to guarantee the safety of any utility workers who might be working on fixing the power lines.

Off-Grid Solar Panel System

home solar system

An off-grid solar panel system isn’t connected to the utility grid, and the household is completely dependent on the solar panels as its only source of power.

Off-grid solar systems come equipped with a solar generator or deep cycle battery that works to store any excess power produced during the day, so the household still has a source of energy at night. 

Although this type of solar power system eliminates your electricity bill, with the addition of solar batteries, an off-grid solar panel system will usually end up being sold at a higher price than its grid-tied counterparts.

One of the main purposes of owning an off-grid system is for a household to become completely self-sustaining without having to rely on the state for electricity. This also means that an off-grid solar household won't be affected by blackouts.

solar energy system

It's because this type of system is self-sufficient that a certain amount of consideration for your region's climate is needed. If you're opting for an off-grid lifestyle, you'll need to be certain that your climate will be suitable to provide enough sunlight for you to live comfortably in an off-grid household.

If not, investing in more than one battery bank may offer you some insurance against any disadvantageous weather patterns. Additionally, being in charge of your own power supply means you’ll need to be more conscious of your household's energy usage.

Due to how much an off-grid solar power system costs, this type of system is usually used by those living in smaller households and/or those in more remote or rural areas.

solar power system for home

Hybrid Solar Panel System

A hybrid solar panel system is essentially just a grid-tied system that uses a solar battery or solar generator system as a backup source of energy.

The appeal of this solar power system lies in its ability to keep the household powered even during a grid-wide blackout. With the solar panels themselves, the system's connection to the utility grid, as well as the battery for backup, this type of solar power system is likely to never leave the household without power.

The solar battery can be added using different methods. One is to purchase a grid-tied solar power system with a hybrid solar inverter. The hybrid inverter ensures that your system is battery-ready, though you’d need to purchase said battery fairly soon after purchasing the system because of the rapid changes these technologies undergo.

Another method to create a hybrid solar power system would be to install an AC coupled battery. An AC battery is made up of a lithium battery, a charger, an inverter, as well as a battery management system.

As you may know, your solar panel system’s inverter converts DC into AC. The excess power is then converted back into DC so that it can be stored inside the battery. When it comes time for that power to be used, it is once again converted into AC.

AC batteries can also be charged via the utility grid.

There will be an added cost for the battery backup as well as a higher installation price, but some find it worth the expense, especially for those living in places that experience frequent power outages.

solar power system for home

How Much Does a Solar Power System Cost?

On average, a solar power system can be priced anywhere from $3,500 to $35,000. The amount you pay for a solar installation is dependent on factors such as the model you're going with, its size (determined by your energy needs), and the price of a professional installation in your area.

Additionally, there’s a system in the United States known as the federal solar tax credit, which offers you a credit for a percentage of the overall cost of your solar power system. As of 2022, the federal solar tax sits at 26% of your solar installation.

You also need to take into account the mounting system for your system. Are you planning to mount the solar panels in the ground or on your roof?

What Determines The Price?

Although many factors may influence it, the price of a solar power system as a whole is primarily determined by the number of kilowatts (kW) it produces.

Logically speaking, if you live in a larger house, you'd likely opt for a smaller system that’s tied to the grid instead of spending money on a large system that will generate enough kilowatts to power your entire home.

 This is also why it’s important to consider your energy needs beforehand because instead of stretching yourself too thin money-wise, you could just as simply go for a system that will significantly lessen your electricity bill as well as earn you some utility credits.

When it comes to the solar panels themselves, there are different types and some will cost you more than others. Monocrystalline panels, for example, have a more thought-out manufacturing process which gives them a higher level of efficiency than their more commonly used polycrystalline counterparts.

home solar power system

Due to their higher level of efficiency, you would not need as many of them as opposed to polycrystalline panels. Although, their higher efficiency does come with an equally higher price, so it would be up to you to determine which type would be best suited for your needs.

Another factor that comes into play is the cost of electricity from State-to-State. I’ve mentioned previously that the cost of a solar power system depends on the number of kilowatts it generates, but this doesn't mean that prices will be the same all across the board.

The price of electricity in a State also comes into play, meaning that if electricity costs more in one State than it does in another, solar energy in that State will be pricier as well.

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