How a solar panel actually works: from photon to power outlet

A solar module is the quietest machine on a roof. No belts, no combustion, no moving parts — just a sheet of silicon doing what the Department of Energy calls the photovoltaic effect: converting light into voltage. Understanding how a panel makes electricity is the difference between buying gear from a brochure and running an honest off-grid system. Whether you are sizing an off-grid kit or thinking about household decarbonisation, the physics is the same. Here is the path from photon to outlet in 6 steps, with the losses called out in plain numbers.

What a solar panel actually is

Underneath the glass, a solar panel is a sheet of wired-together silicon cells. The DOE puts it plainly: roughly 95% of commercial solar panels use two semiconductor types — monocrystalline silicon (one continuous crystal, electrons flow more freely) and polycrystalline silicon (many crystals, cheaper to make). An individual cell produces only 1 to 2 watts. Modules wire dozens together — 60 or 72 cells is typical for residential — to push the voltage and current up to something a house can use.

The photovoltaic effect, step by step

That stack of cells does one job: the photovoltaic effect. The DOE describes it as the moment a semiconductor absorbs the light, transferring the energy to negatively charged particles called electrons. Those freed electrons follow the cell’s internal electrical field and start flowing as direct current (DC) through the metal contacts on the back of the panel. Sunlight in, electrons out. That is the whole trick.

From DC to AC: the inverter does the translation

Those electrons leaving the panel are DC, and almost nothing in your house runs on it. The DOE description is direct: the inverter converts the direct current (DC) to alternating current (AC), which flows into the electric grid. In a real install this is either a single string inverter mounted on the wall, or a microinverter bolted to the back of each module. The choice changes shading behavior, monitoring, and cost — not how the physics work.

Where the efficiency number comes from

A commercial silicon module sits between 18% and 22% efficient, per the DOE. The theoretical ceiling for single-junction silicon is about 32%. The gap between 32% and 22% is not laziness — it is the physics tax. Photons too red to free an electron are wasted as heat; photons too blue have leftover energy that also dumps as heat; real cells have reflection losses, resistance losses, and wiring losses. The waterfall below shows roughly where each percent goes.

Per the DOE, roughly 95% of commercial panels are silicon; the thin-film share is small but growing in utility-scale and weight-sensitive installs. The 32% Shockley-Queisser limit is why panel datasheets have stopped climbing fast — meaningful gains now require multi-junction or tandem-cell designs.

How long does a panel last?

That efficiency does not stay flat forever. NREL data shows a median degradation rate of about 0.5% per year for crystalline-silicon modules. Stacked across a 25-year warranty term, the math is unfussy: a panel rated 400 W on day one is producing around 88% of that, roughly 352 W, after 25 years.

Most performance warranties promise 97-98% in year one and 80-84% in year 25, which the median panel beats. Thin-film tends to degrade at closer to 1% per year, so its 25-year math is worse. Sizing the system right at install time — covered for cabins in our solar-for-shed guide — is what keeps that 12% lifetime loss from biting you.

Putting the whole system together

Once those parts are clear, a residential solar system is just 6 boxes in a line: array, inverter, optional battery, breaker panel, meter, and the grid. An off-grid build swaps the grid for a battery bank and a backup generator. A grid-tied system net-meters surplus back to the utility. The same cell, the same photovoltaic effect, the same DC-to-AC inverter — different last box. For tiny homes the array is smaller and lithium batteries usually replace lead-acid.

The takeaway

From the outside a solar module looks like a sheet of glass. Inside, a silicon wafer is converting photons into electrons, an inverter is turning DC into AC, and the rest of the house carries on as normal. Today’s 18-22% efficiency is not a brochure number — it is what physics and 50 years of engineering have squeezed out of a 32% ceiling. The next gains come from multi-junction cells, perovskite tandems, and better module packaging — not from anything you can buy this year. The simple system you build today will still be producing about 88% of its rated power the year your mortgage is paid off.