How Solar Cells Work

Solar Power Costs

Solar cells might still be a little pricey, but they're getting cheaper year by year.
Solar cells might still be a little pricey, but they're getting cheaper year by year.

Some people have a flawed concept of solar energy. While it's true that sunlight is free, the electricity generated by PV systems is not. There are lots of factors involved in determining whether installing a PV system is worth the price.

First, there's the question of where you reside. People living in sunny parts of the world start out with a greater advantage than those settled in less sun-drenched locations, since their PV systems are generally able to generate more electricity. The cost of utilities in an area should be factored in on top of that. Electricity rates vary greatly from place to place, so someone living farther north may still want to consider going solar if their rates are particularly high.

Next, there's the installation cost; as you probably noticed from our discussion of a household PV system, quite a bit of hardware is needed. As of 2009, a residential solar panel setup averaged somewhere between $8 and $10 per watt to install [source: National Renewable Energy Laboratory]. The larger the system, the less it typically costs per watt. It's also important to remember that many solar power systems don't completely cover the electricity load 100 percent of the time. Chances are, you'll still have a power bill, although it'll certainly be lower than if there were no solar panels in place.

Despite the sticker price, there are several potential ways to defray the cost of a PV system for both residents and corporations willing to upgrade and go solar. These can come in the form of federal and state tax incentives, utility company rebates and other financing opportunities. Plus, depending on how large the solar panel setup is -- and how well it performs -- it could help pay itself off faster by creating the occasional surplus of power. Finally, it's also important to factor in home value estimates. Installing a PV system is expected to add thousands of dollars to the value of a home.

Right now, solar power still has some difficulty competing with the utilities, but costs are coming down as research improves the technology. Advocates are confident that PV will one day be cost-effective in urban areas as well as remote ones. Part of the problem is that manufacturing needs to be done on a large scale to reduce costs as much as possible. That kind of demand for PV, however, won't exist until prices fall to competitive levels. It's a catch-22. Even so, as demand and module efficiencies rise constantly, prices fall, and the world becomes increasingly aware of the environmental concerns associated with conventional power sources, it's likely photovoltaics will have a promising future.

For more information about solar cells and related topics, check out the links below.

Related HowStuffWorks Articles

More Great Links


  • "About Solar Energy and Solar Power Systems." (1/21/2010)
  • Beckman, William A. and Duffie, John A. "Solar Engineering of Thermal Processes 2nd Ed." John Wiley and Sons, Inc. 1991.
  • Beller, Peter. "Solar's Future Dims A Bit." Forbes. Jan. 15, 2010. (1/21/2010)
  • Biello, David. "Why not spend $21 billion on solar power from space?" Scientific American. Sep. 2, 2009. (1/21/2010)
  • Black, Ken. "What is a Solar Battery?" WiseGeek. (1/21/2010)
  • Bland, Eric. "Tobacco Plants Tapped to Grow Solar Cells." Discovery News. Jan. 25, 2010. (1/25/2010)
  • Darlin, Damon. "Financially, Solar Power for the Home Is a Tough Sell." New York Times. April 14, 2007. (1/25/2010)
  • "Enhancing Solar Cells With Nanoparticles." ScienceDaily. Dec. 26, 2008. (1/25/2010)
  • "Fast Solar Energy Facts." (1/21/2010)
  • "Glossary of Solar Energy Terms." (1/21/2010)
  • Goodall, Chris. "How long do solar panels last?" Scitizen. Aug. 5, 2009. (1/21/2010)
  • "'Grapefruit Satellite' to Mark 45 Years in Space." Naval Research Laboratory. March 12, 2003. (1/25/2010)
  • "How a Photovoltaic System Works." Ameco. (1/21/2010)
  • "How Solar Cells Work." GE Energy. (1/20/2010)
  • Knier, Gil. "How do Photovoltaics Work?" NASA. (1/20/2010)
  • Milton, Chris. "The Solar Powered Plane: It Flies!" Scientific American. Dec. 7, 2009. (1/21/2010)
  • Montoya, Randy. "Advancements in Solar Power Grids." Popular Mechanics. September 2000. (1/20/2010)
  • National Center for Photovoltaic Research Web site. The National Renewable Energy Laboratory. (1/21/2010)
  • Nave, C. R. "The P-N Junction." Georgia State University. (1/20/2010)
  • "New Generation of Solar Cells Promises Efficiency." ScienceDaily. July 24, 2009. (1/21/2010)
  • "New World Record Achieved in Solar Cell Technology." U.S. Department of Energy. Dec. 5, 2006. (1/20/2010)
  • Noufi, Rommel and Zweibel, Ken. "High-Efficiency CdTe and CIGS Thin-Film Solar Cells: Highlights and Challenges." National Renewable Energy Laboratory. September 2007. (1/21/2010)
  • "Own Your Own Power! A Consumer Guide to Solar Electricity for the Home." The National Renewable Energy Laboratory. January 2009. (1/21/2010)
  • Pandolfi, Keith. "Boost home value, get cheaper bills." This Old House. March 4, 2008. (1/25/2010)
  • Pandolfi, Keith. "Solar Shingles." This Old House. (1/25/2010),,1205726,00.html?partner=yes&xid=cnn-0208-solar-shingles
  • Pollick, Michael. "How Do Solar Panels Work?" WiseGeek. Jan. 3, 2010. (1/20/2010)
  • Shahan, Zachary. "1st Solar-Powered Electric Vehicle (EV) Charging Station in NYC." Scientific American. Dec. 20, 2009. (1/21/2010)
  • "Solar Cell." Encyclopedia Britannica. (1/21/2010)
  • Web site. (1/21/2010)
  • "Solar Photovoltaic Technology." The National Renewable Energy Lab. Sept. 29, 2009. (1/20/2010)
  • "Types of Solar Energy Systems." (1/21/2010)
  • Welch, William. "Air Force embraces solar power." USA Today. April 18, 2007. (1/20/2010)
  • Whitney, Ryan. "Nellis activates nation's largest PV array." Nellis Air Force Base. (1/20/2010)
  • Wright, Sarah. "Getting wrapped up in solar textiles." MIT. June 9, 2008. (1/21/2010)
  • Yago, Jeffrey. "The care and feeding of solar batteries." Backwoods Home Magazine. (1/21/2010)
  • Zweibel, Ken. "Harnessing Solar Power: The Photovoltaics Challenge." Plenum Press, New York and London. 1990.