While solar is comprised of a diverse suite of technologies, there are three main types: photovoltaics (PV), solar heating & cooling (SHC), and concentrating solar power (CSP). Homeowners and businesses interested in going solar are primarily interested in the first two technologies, while utilities and large-scale energy project developers primarily utilize the latter.
PV panels directly produce electricity from sunlight, while SHC technologies use thermal (heat) energy to change the temperature of water and air. PV panels have no moving parts, and use an inverter to change the direct current (DC) power they produce to usable alternating current (AC) power. SHC technologies are often used to heat water for domestic or commercial use, but can also be used to heat or cool the air in buildings.
Photovoltaic panels can use direct or indirect sunlight to generate power, though they are most effective in direct sunlight. Solar panels will still work even when the light is reflected or partially blocked by clouds. Rain actually helps to keep your panels operating efficiently by washing away any dust or dirt. If you live in an area with a strong net metering policy, energy generated by your panels during sunny hours will offset energy that you use at night and other times when your system isn’t operating at full capacity.
Currently, there is a 30-percent federal investment tax credit (ITC) for solar energy systems in place until December 31st, 2016. Both residential and commercial customers can take advantage of this tax credit, and it applies to all three major types of solar technology; photovoltaic, solar heating & cooling, and concentrating solar technology.
In addition to the federal ITC, many states, counties, municipalities and utilities offer rebates or other incentives for solar energy technologies. Your installer will be able to provide the most up-to-date information on solar incentives. The Database of State Incentives for Renewables & Efficiency (DSIRE) has a comprehensive list of solar incentives by state, as well as more information and maps showing solar policies across the U.S.