What is a PV System and How Does a PV System Produce Electricity?

Photovoltaic systems – or PV systems, as they’re referred to in the industry – are rapidly turning into one of the world’s most popular means of generating electricity.

PV systems use semiconductor materials, such as silicon, to turn the sun’s energy into electrical power. Sunlight striking the semiconductor material creates a flow of electricity that can be harnessed and used to power homes, businesses, and other applications.

Also called ‘solar panels,’ ‘solar modules,’ and ‘solar energy systems,’ PV systems are a simple, affordable way to both increase the efficiency of your property and reduce your reliance on the grid. In this article, we’ll cover what PV systems are and how they work.

Let’s get started!


PV systems consist of solar panels, one or more inverter s (depending on your installation type), and an optional, but often recommended, battery system. They’re mounted outdoors, where they can take advantage of the sun’s energy and are often attached to the roof of a home or building. Some PV systems can also be ground-mounted and feature motors that follow the sun as it moves across the sky.

PV systems convert sunlight into electricity, which can then be used to power your home, business, or other electrical needs. This was first achieved through a series of striking advancements in both materials science and physics, and PV systems are now commonplace throughout the globe.

How does a solar PV system work?

The solar panels convert sunlight into direct current (DC) electricity through what’s called the photovoltaic effect; when energy from the sun strikes a certain material, like silicon, it creates an electric field and causes electricity to flow. However, this electricity is usually not usable as is, because it’s in the form of direct current – which is different from the alternating current (AC) that most appliances and electronics run on.

Your inverter is what takes the direct current from the solar panels and converts it into alternating current so that it can be used in your home or business. It does this through a process termed ‘pulse-width modulation,’ which ‘flickers’ the direct current according to the standard frequency and mathematically applies the correct voltage. For example, in North America, this frequency is 60 Hz, so the inverter takes in DC current and converts it into AC at a rate of 60 pulses per second.

The battery system is optional but often recommended. If you have a battery system, it will store the electricity that’s generated by the PV system during the daytime, when the sun is shining brightest, for use later on – evenings, night-time, or during a power outage. This is known as ‘off-grid’ storage, and is growing increasingly popular because of the movement towards energy independence.

It’s also just more practical; by increasing your self-consumption of solar electricity, your PV system helps save you more money. But even if you don’t have a battery system or you don’t need as much energy, you can still sell you power back to the grid, which is certainly not a bad choice.   

Improving efficiency with microinverters  

Even PV systems with batteries and inverters can be relatively inefficient, losing as much as 15% of their energy in the conversion process.

One way to gain maximum solar power is through the use of microinverters instead of traditional string inverters.

String inverters pool together the energy from all of the solar panels in a system and convert it all at once. This means that if any one panel is shaded or not working as well as the others, it can drag down the entire system’s efficiency.

Microinverters, on the other hand, are attached to each individual solar panel. This means that each panel is working on its own, and if one is shaded or not working as well as the others, it won’t affect the rest of the system.

Traditional inverters work vs microinverters

This also has the added benefit of allowing you to more easily monitor your system’s performance – if one panel is underperforming, you’ll be able to hone in and take steps to improve your energy capture. This improves the cost efficiency of your system.

That’s why we recommend an in-depth monitoring system (like the Hoymiles S-Miles Cloud app, for example).


Photovoltaic systems come in all shapes and sizes, and can be used for a variety of applications. Depending on your needs, geographical positioning, and budget, you can choose from a variety of PV system types. We’ll cover three in particular:

Stand-alone systems

These systems are ideal for homes or businesses that are not connected to the grid, like those in rural areas with high sunlight. Because of the variability in power consumption, a stand-alone system will usually include a battery storage system to provide power during times when the sun isn’t shining.

Despite requiring a battery, stand-alone systems are often more affordable simply because of the energy requirements. Smaller, more rural homes situated away from the grid usually don’t have the same energy demands as larger, urban homes, so a system that’s sized to meet their needs is much less expensive than a system meant for a high-energy user.

Grid-tied systems

Grid-tied PV systems are the most common type – they’re connected to your home or business’s electrical grid, and use the grid as a backup system. Not all of them use batteries, but you can still purchase these for added energy independence.

Hybrid systems

A hybrid PV system offers the best of both worlds – it maximizes your energy independence, but also includes a connection to the grid. Energy transfer is mediated by a piece of hardware known as a hybrid inverter , which, in real time, requisitions grid power if needed, sends excess energy to batteries as required, or sells back excess energy to the grid to improve solar savings. These systems are perfect for those who want the security of a backup power source in case of a grid outage, while also maximizing the cost savings their PV system provides.

Because of the need for an additional component (the hybrid inverter), hybrid systems are often more expensive than grid-tied or stand-alone systems up front. However, the idea is you make that higher cost back over time through energy buy-back programs in your state or country (like the California Net Surplus Compensation program, for example).


The photovoltaic system industry is set up such that homeowners or business owners no longer need in-depth knowledge of electricity (or how to read schematics) in order to have one installed. You simply need to know what you want and be able to communicate that to your installer.

That said, a core understanding of a few basics is helpful in order to make informed decisions about a PV system.

The photovoltaic effect

The photovoltaic effect, so named by French physicist Edmond Becquerel in 1839, is the basic physical process that makes solar cells work. When sunlight shines on a silicon photovoltaic cell, some of the energy in the light is converted into electricity. This happens because photons – packets of light energy from the Sun – knock electrons loose from atoms inside the solar cell.

It’s sort of like billiards. You can think of photons and electrons as physical things that both occupy space, so when one hits another at the speed of light, the latter is pushed out of its usual orbit.

These electrons flow freely through the solar cell, creating an electrical current. Naturally, the more photons that hit a solar cell, the more electrons are displaced and the more current it produces. This is why, on consistent, sunlit days, solar cells produce more electricity than on cloudy days.

Typical PV system configurations

From this, we see two big patterns arise in terms of installation:

First, it’s essential to place solar panels in areas that receive the most sunlight. This may seem like a no-brainer, but it’s actually one of the most common mistakes made by homeowners or installers.

Because of the angle of the sun over the course of the day and the year, the most efficient PV systems actually move around quite a bit – they orient their panels so that they’re exactly perpendicular to the angle of sunlight to maximize energy capture using a motorized mount.

Second, in order to convert the direct current (DC) produced by the PV cells into the alternating current (AC) generally used in homes, you need an inverter. The inverter is placed between the solar panels and the home’s electrical system and turns the energy into a usable form.

This is why PV systems look the way that they do – you usually have a bank of panels sitting on a mount or on a roof, and if your system is a little older, a large inverter box mounted on the wall next to your fuse box. If, on the other hand, your system is a little more modern, you’ll have efficient microinverters installed underneath each individual solar panel, which helps with system performance and monitoring.

There are additional hardware components that can be included in a PV system, of course, such as charge controllers (to regulate battery charging) and meters (to monitor energy production). All of these are also connected by an abundance of wires, which are best concealed as much as possible.

But the basic components of a PV system are panels, an inverter, and optional batteries. These are connected to your home’s or business’s wiring by a specialist (who can also let you know if there are additional things you’ll need).


Energy utilization in a PV system occurs in three main ways: 

1. Consumption by tools and appliances

This is the most likely way you’ll use the energy a PV system produces. Your refrigerator, air conditioner, the lights in your home, or any other appliance or tool can all run off of PV-generated electricity. There’s no functional difference in using PV-generated electricity vs. grid electricity – it fulfils the same function once it’s converted to alternating current. But it’s usually significantly cheaper, which is why most people prefer PV-generated power over buying power from the grid.

2. Storage in batteries

If you have a battery bank, you can store energy generated by your PV system for later use. This is an excellent way to make sure you always have power available, even during blackouts or other grid outages.

Additionally, because the cost of batteries continues to drop, it’s becoming increasingly more affordable to store energy this way, and it also allows you to perform something called energy arbitrage – which we’ll cover next.

3. Feeding back into the grid

If you have a surplus of energy generated by your PV system, you can feed that energy back into the grid and receive a credit from your utility company. This is a great way to lower your monthly energy bill, and it also helps contribute to the overall stability of the grid. If you have batteries, you can also more easily perform energy arbitrage.

If your solar system isn’t capable of fully meeting your energy needs, you can buy the remaining power you need from the grid when it’s cheap, store it in your batteries, and then use that power when the sun isn’t shining or when prices are higher; ergo, arbitrage. You can also sell back power to the grid when you have a surplus, allowing you to take advantage of slight differences in rates (and these can add up over time).


Go solar with Hoymiles.  for residential and commercial PV systems that can offset your energy requirements and increase the long-term value of your business or home.

Our extensive installer network means you can purchase high-quality hardware, receive a stellar consultation, and have your PV system up and running in just weeks.

Reach out today!