What Components Make up a Solar System?

9 min

Home solar components

When the sun shines onto a solar panel, photons from sunlight are absorbed by the cells in the panel which creates an electric field across the layers of semiconductor materials and causes electricity to flow.

Here’s a quick overview of what happens from sun-to-plug in a photovoltaic system:

  1. Solar Panels: Photovoltaic cells absorb photons from the sun and convert them to direct current (DC) electricity
  2. Inverter: An inverter transforms direct current (DC) to alternate current (AC) to power appliances
  3. Main Panel: AC power travels via wire to a breaker box for distribution throughout the building
  4. Net Meter: Any unused electricity flows back into the utility grid or into solar energy storage

Next we cover what components make up a solar (PV) system, how the costs breakdown, and more detail into different panel technologies.

With this knowledge, you’ll be able to understand the value of the solar panel system.

Solar panels are the most obvious components of a system, but only represent about 30% of the total system’s cost. The high-tech shimmer of a solar panel is just the tip of the iceberg that a photovoltaic system uses to harness renewable energy from the sun. In addition to the solar panels themselves, the other major system components include the DC to AC Inverter, the racking used to support the panels, the monitoring hardware, and the systems electrical components.

Let’s take a closer look at the important components that make up a solar system.

Solar Photovoltaic Panels

The most important component of a solar panel is the photovoltaic cell which actually generates electricity. The conversion of sunlight, made up of particles called photons, into electrical energy by a solar cell is called the “photovoltaic effect”- hence why we refer to solar cells as “photovoltaic” or PV for short.

Solar PV cells generate electricity by absorbing sunlight and using that light energy to create an electrical current. There are many photovoltaic cells within a single solar panel, and the current created by all of the cells together adds up to enough electricity to help power your home. A standard panel used in a rooftop residential array will have 60, 72 or 90 cells linked together.

Photovoltaics break down.

A solar PV cell works in three general steps:

  • Light is absorbed and knocks electrons loose
  • Loose electrons flow, creating a current
  • The current is captured and transferred to wires

The photovoltaic effect is a complicated process, but these three steps are the basic way that energy from the sun is converted into usable electricity by solar cells in solar panels.

A typical solar panel consists of silicon cells, a metal frame, wiring elements, and glass. An insulative layer and a protective back sheet protect the panel from excessive heat and humidity. While the general construction of solar panels is pretty standard, the silicon cells are manufactured in two distinct formats:

  1. Monocrystalline cells are one solid silicon crystal. Mono cells provide more space for electrons to flow, resulting in a smaller, more efficient panel. The downside is they tend to be more expensive.
  2. Polycrystalline cells are constructed of many individual shards of silicon melted together. While not as efficient as mono cells, poly cells have a lower price point.


Solar energy comes off the panel as direct current but needs to be converted to alternating current before it can be used in the electrical grid. Thankfully DC is converted to AC using an inverter. There are two distinct types of inverters and power optimizers.

Solar inverter setupsString (or centralized) inverter: A single inverter connects your entire array of solar panels to your electrical panel. String inverters are frequently the least expensive inverter option and are a very durable technology that have historically been the most commonly installed inverter type. Multiple strings of panels can be connected to each inverter but if the electricity production from one of the panels in a string drops (as may happen due to shading), it can temporarily reduce the performance of that whole string.

Microinverters: If you choose microinverters, one is (usually) installed at each solar panel which allows each panel to maximize production. If some of your panels are shaded at different times of day or if they aren’t all installed facing the same direction microinverters will minimize performance issues. The cost of microinverters tends to be higher than the cost of string inverters.

Power optimizers: Systems that use power optimizers are a hybrid of micro-inverter and string inverter systems. Like microinverters, power optimizers are installed at each panel but instead of converting the DC electricity from the solar panels into AC electricity the optimizers “condition” the DC electricity before sending it to a centralized inverter. Like microinverters, they perform well when one or more panels are shaded or if panels are installed facing different directions. Power optimizer systems tend to cost more than string inverter systems, but less than microinverter systems.

Learn about the top 2023 inverter manufacturers.

Racking and mounting system

Racking and Mounting System

Racking and mounting hardware do far more than secure panels to a roof — they provide the correct positioning for maximum exposure to the sun.

Most likely you have a pitched roof that requires a solar mounting system made up of rails anchored to a roof. Other roof-mounted systems attach panels directly to bolts or screws which are anchored into the roof, eliminating the use of rails and providing a more sleek aesthetic and lighter load.

If you are a homeowner with a flat roof you’ll need a different solution. Some flat roofs can be penetrated and the solar mounts can be secured and waterproofed where other flat roofs are not suitable for penetrations.

The primary concern homeowners have is roof leaks. When installed properly, roof leaks from solar mounting penetrations are extremely rare. Typically installation companies will provide between a 5 year to 25 year roof penetration warranty. Another concern of homeowners is how the solar may affect their existing roof warranty. We take great care to ensure the installation method will not void any roofing warranties.

Performance Monitoring Systems

Performance monitoring system for solar.

A performance monitoring system is a dashboard that provides a complete picture of your system’s performance. Aside from the fuzzy feelings of seeing your meter spin in reverse a solar performance monitoring system offers valuable insights into a photovoltaic system.

These systems offer information about energy output and consumption, optimizes energy usage, and can inform you about problems in your solar system. Solar monitoring systems work through inverters, usually through monitoring software that runs between the inverter and other devices.

Performance monitoring systems gather information as the inverter converts direct current to alternate current and make that information accessible to the homeowner through companion apps and smart home devices. The best ones collect data through a central inverter or from individual microinverters affixed to each solar panel. The later option provides greater insight into individual solar panel performance and allows faster diagnosis of potential problems.

EnergyPal recommended solar systems always have monitoring included.

System Costs Breakdown

The cost of a solar system can be thought of as having upfront capital cost and an ongoing operations and maintenance (O&M) cost. With all of the great solar financing programs available to homeowners the upfront capital cost can be financed, turning an upfront solar cost into a monthly payment which is usually lower than the utility savings it generates. Maintenance costs are very minimal for solar systems.

Capital costs refer to the fixed, one-time costs of designing and installing the system. Capital costs are categorized into hard costs and soft costs.

  • Hard costs are the costs of the equipment, including panels, inverters, and other components.
  • Soft costsinclude intangible costs such as permitting, taxes, marketing, and installation-related labor.

Operations and Maintenance (O&M) costs refer to costs that are associated with running and maintaining the system after installation. PV systems generally have low O&M costs since there are no moving parts, no need for fuels or lubricants, and the majority of the cost (the panels) should last 30, 40, 50+ years! The O&M costs are more likely to be associated with the inverters or battery cell components which are assumed to have 10-15 year lifetimes and may need replacement.

Because of the many soft-costs which are hard to directly associate with any one specific project, solar projects are not typically “itemized”. This means a homeowner who wants a specific breakdown of where each dollar goes will not get an easy answer from any installer. This is different from traditional contracting jobs where a homeowner might see a clear breakdown of materials, supplies, and labor.

So How Much Does Solar Cost?

Generally solar projects are priced on a dollar per watt basis ($/W).A typical cost per watt is between $2.50-$3.50.

The number of solar panels needed to power a home can vary depending on several factors. Assuming an average panel capacity of 400 W, a 10 kW system would need around 25 panels (10,000 W ÷ 400 W = 25 panels).

In this example, a 10 kW system might cost $3/W or $30,000 dollars.

Please note that this is an estimate and the actual number of panels needed may vary depending on various factors such as location, shading, and energy consumption patterns. Additionally, local building codes, regulations, and incentives for solar installations also impact the design, price and size of your solar panel system.

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