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How Does a Photovoltaic System Produce Electricity?

Posted by Christian Brown on Dec 3, 2019 4:30:00 PM

As a solar professional, it’s important to be able to explain the process of how a solar photovoltaic system produces electricity. This process seems mysterious to many and misconceptions abound among those unfamiliar with solar energy. In this article, we get back to basics with an overview of how solar installations provide electricity and how the process works for the customer. 

How Does a Solar Photovoltaic System Work?

Solar panels convert the energy of photons (light particles) into electricity (as we discuss in The Beginner's Guide to Solar Energy). This process is called the photovoltaic effect. When a photon hits a photovoltaic (PV) device, its energy is transferred from the photon to the local electrons in the material. These excited electrons begin to flow, producing an electric current.

Solar cells (within solar panels) produce direct current (DC) electricity, which is typically converted to alternating current (AC) electricity by an inverter. This allows it to be sent back to the electric grid, which operates with AC electricity, as well as used to power appliances in the customer’s home (or commercial building, in the case of commercial solar installations). In summary, the process of how solar panels works involves three primary steps:

  1. Solar cells within solar panels absorb light from the sun, which causes electric current to begin flowing. 
  2. An inverter converts DC electricity to AC electricity. 
  3. This electricity is used to supply current energy demands in the customer’s building and excess electricity beyond what the customer can use is exported to the grid. 

What Happens with the Energy a PV System Produces?

Most solar customers in the U.S. have grid-connected solar installations. Their home is connected to the electric grid, which allows them to use energy supplied by their electric utility when they need more than their solar installation is producing (such as on a rainy day or at night). It also means that whenever their PV system is producing more than they need, that excess energy can be sent to the grid for others to use. 

A policy called net metering, common throughout the U.S., compensates solar customers for this excess energy, so that they can offset the cost of future electricity they use from the grid.

Net metering has played a significant role in making solar energy cost-effective. However, around the country, we are beginning to see some changes in how utility companies implement net metering, many of which reduce the value that solar customers receive from their solar installations. 

Feed-in tariffs are another way of compensating solar customers for the electricity they send to the grid in some areas. 

What are the Parts of a Photovoltaic System?

A simple PV system contains two basic types of components:

  • Solar Modules: Solar modules contain solar cells that convert sunlight into electricity.
  • Inverter(s): An inverter converts DC current to AC current. It can also perform other functions that are beneficial to the electricity grid (see our article on smart inverters, which are now required in California). 

Diagram of a simple PV system from Aurora Solar softwareDiagram of a simple PV system. Source: Aurora Solar.

It is common practice to refer to all components of a PV system besides the modules as balance of system (BOS) components. Examples of BOS components include inverters, disconnects, racking, and wiring.

Of course, this is just a basic overview of the parts of a solar installation and how they fit together. Explore some of our related articles for a deeper dive into the ways that solar panels and inverters can be wired together (stringing) and some alternatives to traditional inverters, known as module-level power electronics (MLPE)

Aurora solar gives companies the tools to design and sell commercial AND  residential solar projects more efficiently and accurately! See what our  customers are saying.

What Factors Affect Solar PV System Efficiency

It is important to note that the process of producing electricity from solar energy is not 100% efficient. Environmental factors—such as temperature, soiling, and shading—as well as losses in the electrical components, can affect the efficiency of a PV system (for a deep dive on these losses see our PV System Losses Series). Typical loss categories include:

  • Temperature: Solar panel efficiency varies with temperature. High temperatures have a negative impact on performance.
  • Soiling: Material that accumulates on the surface of PV panels can block light from reaching the solar cells, thereby reducing the generated power. The power loss due to soiling is highly variable, depending on the type of soiling (such as dust or snow), and how frequently the panel is cleaned.

Soiling, such as dust, on PV modules reduces power outputSoiling, such as dust, on PV modules reduces power output.

  • Shading: Shading is the obstruction of irradiance due to trees, buildings, terrain, and other objects in the environment. The effect of shading on the power output of a solar installation is highly variable. (To learn more about  the causes and consequences of shading, this article and this section of our PV system losses series are great resources.)
  • Wiring and connections: Resistance in the electrical connections of a solar installation typically results in energy losses of a few percent.
  • Mismatch: Due to manufacturing variations, modules of the same type can have slightly different electrical characteristics. This mismatch between modules can lead to a performance loss.
  • Inverter Efficiency: Converting DC into AC current via an inverter is typically around 96-97% efficient. Inverters typically have higher efficiency when the DC input power is high. The conversion efficiency takes a big hit when the input power is much less than the inverter's rated power.
  • Age: Solar panels produce less energy the older they get. Typically the decrease in performance is assumed to be around 0.5% per year.
Term Typical Value
Temperature -0.5%/°C above 25°C
Inverter Efficiency 96.5%
Mismatch 98%
Wiring/Connections 98%
Soiling 95% (highly variable)
Age -0.5%/year
Shading Highly environment-dependent
Typical solar efficiency values for different PV system loss types. 

The above factors are combined in a coefficient called the system derate factor to represent the overall losses of a solar installation. For instance, PVWatts, an NREL supported PV system energy production calculator, uses a default system derate factor of 86%. 

However, depending on the system design or environmental conditions, this value can be higher or lower. Advanced solar design software like Aurora can ensure that you accurately determine PV system losses and how much energy your PV system will produce. 

Sign up for a demo to learn more about these features and see them in action.

Solar panel (module) efficiency denotes what portion of irradiance a module converts into electricity under standard test conditions (STC; irradiance of 1000W/m2, ambient temperature of 25°C). As a general rule of thumb, you can estimate a PV system’s efficiency in converting irradiance into electricity (under STC) using the following formula:

$$\text{Overall System Efficiency} = \text{Module Efficiency} \times \text{Derate Factor}$$

It is important to note that these are merely back-of-the-envelope calculations. To get a comprehensive energy production analysis, you need a software application, such as Aurora, that incorporates all of a PV system’s environmental, mechanical, and electrical characteristics.

About Solar PV Education 101

How a Photovoltaic System Produces Electricity is part of Solar PV Education 101, a six-article series that serves as an introductory primer on the fundamentals of solar PV for beginners.

Article 1: The Beginner's Guide to Solar Energy
Article 2: How a Photovoltaic System Produces Electricity
Article 3: Reading Your Electricity Bill: A Beginner’s Guide
Article 4: How to Size a PV System from an Electricity Bill
Article 5: Shade Losses for PV Systems, and Techniques to Mitigate Them
Article 6: The Basic Principles that Guide PV System Costs

Editor's Note: This article was originally published on October 7, 2016. It was updated in December 2019 for freshness, accuracy, and comprehensiveness.

Topics: Solar PV Education 101, photovoltaic system, Solar Primer, PV system, components, solar cells, modules, arrays, efficiency, derating

The Importance of Modeling Global Maximum Power Point Tracking

Posted by David Bromberg on Mar 28, 2017 12:00:00 AM

When modeling how much energy a solar design will produce, there are many features of the components that must be taken into account to ensure an accurate estimate. One important factor that modeling software must account for in order to avoid over- or under-estimating the system’s energy production is whether or not the inverter(s) used are capable of “global maximum power point tracking.” In this post, we will examine what global maximum power point tracking means—and why accounting for it is so important.

Understanding Current-Voltage and Power-Voltage Curves

The datasheet of a solar panel includes a variety of data that allow one to understand the basic parameters of the device and to mathematically model its behavior within an electrical circuit. Typically, this will include graphs that illustrate the panel’s “current-voltage curve”—also known as an IV curve, for the standard abbreviations for current (I) and voltage (V) in mathematical equations—and “power-voltage curve.”

Looking at the power-voltage curve allows us to see the point (or points) at which the panel’s power output is maximized.

These graphs illustrate relationships between three electrical characteristics: current, voltage, and power. Power—which we intuitively understand as the energy produced by the panels—is defined as the rate, per unit time, at which electrical energy is transferred by an electric circuit. Current (I) is the rate at which charge is flowing through the circuit, while voltage (V) is the difference in electric potential energy between two points (e.g., the output wires of a solar panel) per unit electrical charge.

A common example used to explain these principles is to think of electricity like water in a tank; the pressure in the tank is analogous to the voltage, while current would be the flow of water out of the tank (Figure 1). The IV curve shows how the panel output current varies with panel output voltage. The power-voltage curve shows how panel output power (the product of the output current and output voltage) varies with panel output voltage.

diagram illustrating voltage and current Figure 1: The concepts of voltage and current as illustrated by the example of water in a tank.

Looking at the power-voltage curve allows us to determine the point (or points) at which the panel’s power output is maximized. On the IV curve, two values that are often indicated are “Vmp” and “Imp” — which indicate the levels of voltage and current at which the solar panel’s output power is maximized under standard test conditions (STC). Nothing about the panel itself dictates it must operate at maximum power, however; any point along the IV curve is a valid operating point. In designs using string inverters, it is the inverters that “choose” the operating point. The ability of the inverters to locate the operating point of a solar array at which output power is maximized is referred to as maximum power point tracking (MPPT).

If the solar array comprises identical solar panels operating under the same irradiance and at the same temperature—such that each constituent module has the same IV curve and maximum power point—the net IV curve of the entire array (which takes into account the IV curves of each individual module) will have a shape like the blue curve in the left half of Figure 2 below. The green curve shows the output power of the array as a function of output voltage; note that there is a single peak in power, occurring at the “knee” of the IV curve. The inverter will seek out this one point at which array power is maximized.

Accounting for Shade: The Role of Bypass Diodes

When parts of the array are shaded, however, the IV curve is much more complicated. The IV curves of the shaded modules are different than those of the unshaded modules, especially in regard to how much current the shaded modules can output. When the amount of irradiance on a module is low, the power of the entire string connected to the module can drop. This is due to the fact that the current through the string can only be as high as the current through the most shaded module.

Because bypass diodes allow the inverter to “skip over” shaded panels instead of operating at their lower current, the IV curve of an array that is partially shaded will look different than that of an unshaded array.

To help mitigate these effects, manufacturers integrate bypass diodes into their modules. A bypass diode can be thought of as an on/off switch, which conducts any amount of current when it is “on” and, conversely, cannot conduct current when it is “off.” When the diode is turned on, it effectively shorts out the shaded module by routing the string current through the diode (and around the module) rather than through the shaded solar cells.

Because bypass diodes allow the inverter to “skip over” shaded panels instead of operating at their lower current, the IV curve of an array that is partially shaded will look different than that of an unshaded array. The resulting IV curve may look like the blue curve on the right in Figure 2, with a corresponding power-voltage curve shown in green. As you can see, there are two distinct operating points at which power is “maximized” - a global maximum where the array operates at a higher current and lower voltage, and a local maximum where the array operates at a lower current and higher voltage. The global maximum occurs when the shaded modules are bypassed, and the local maximum occurs when the shaded modules are not bypassed.

Comparison of current-voltage and power-voltage charts for unshaded and shaded solar arrays Figure 2: (left) Current-voltage (blue) and power-voltage (green) curve of a solar array with no shading; (right) current-voltage (blue) and power-voltage (green) curve of a solar array with shading, where the activation of bypass diodes results in multiple possible maximum power points.

Global MPPT refers to the ability of an inverter to sweep the IV curve of the solar array (within the operating voltage limits of the inverter) and find the array voltage at which the global maximum power point occurs. How often the inverter sweeps the curve, and the resolution at which it does so, is generally manufacturer- and model-specific.

Importantly, not all inverters perform global MPPT. Some inverters are limited to only search for the maximum power point in a local region where it “usually” lies, a high voltage solution where no modules are bypassed. This can be beneficial for sites where there is no shading, because whenever the inverter is sweeping the IV curve searching for the maximum power point it is not actually operating at the maximum power point, and thus not producing as much energy as it could. If the maximum power point is not going to vary much because there is no shade and no reason to activate bypass diodes, then there is no reason to sweep the entire IV curve. Most modern residential inverters are capable of global maximum power point tracking because shading due to trees and obstructions is common and expected. Large commercial inverters and central inverters, however, may not have this functionality because it is generally assumed there will not be much shading.

Importantly, not all inverters perform global maximum power point tracking. Some inverters are limited to only search for the maximum power point in a local region where it “usually” lies, a high voltage solution where no modules are bypassed.

Modeling Global Maximum Power Point Tracking

If your design includes a string inverter with global MPPT functionality, it is critical that the simulation tool you use to model the system accurately represents that behavior. Consider the residential design in Figure 3, which includes two parallel strings connected to an input of an inverter and a third string connected to another input. The irradiance map (left) and 3D model (right) clearly show the effects of shade on this site. Of particular concern are the chimney on the southeast-facing roof plane and the large tree to the west of the house, both of which cast shade on several panels in the design at various times throughout the year. If we simulate this design without global MPPT, the annual production is 5.94 MWh. However, if the inverter actually does perform global MPPT, and we simulate it accordingly, the production estimate increases to 6.25 MWh (Table 1).

2D and 3D models of a residential solar design with shadeFigure 3: 2D view and irradiance map (left) and 3D view (right) of a residential design with shading from a chimney and tree, produced by Aurora Solar's software.

Annual Production Without Global MPPT Annual Production With Global MPPT Percent Difference
5.94 MWh 6.25 MWh 5.09%
Table 1: Annual energy production for a residential design with and without global maximum power point tracking.

Given the results shown in Table 1, it is clear that knowing when to model global MPPT is just as important as being able to model it at all. Assuming every inverter has this functionality is dangerous, because it could lead to severely underperforming systems post-install. Assuming no inverter has this functionality can be a costly mistake as well, because it may lead the designer to install a larger system size than necessary.

This is why Aurora has contacted leading inverter manufacturers to confirm exactly which inverter models perform global MPPT. If a design includes an inverter with this functionality, Aurora will automatically model it. Aurora will even model global MPPT and bypass diodes down to the cell string-level, including the power losses in the diodes themselves. If Aurora has not confirmed the inverter has global MPPT, or that the inverter only performs local tracking, this behavior will not be modeled. The performance simulation logs will indicate whether or not the simulation applied global MPPT. In this way, designers can be sure they are getting simulation results that are as accurate as possible given what is known about the equipment in their designs.


  • Global MPPT allows an inverter to sweep the IV curve of a solar array to find the point at which output power is maximized, even under partial shading.
  • We found a difference of over 5% in annual production when simulating a design with an inverter that has global MPPT versus one without it.
  • Aurora has worked with leading inverter manufacturers to confirm which models apply global MPPT and automatically simulates this behavior for those inverters.

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    Cover photo credit: NREL/DOE

Topics: solar design, power, shading losses, electric current, bypass diodes, components, solar engineering

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