1. Solar panels generate DC power
During the day when the sun is out, solar panels convert UV light into DC electricity. They're able to do this, because they're made from silicone, a material that produces electricity when light falls onto it.
2. Solar inverter converts DC power to AC
This DC electricity is then converted by a solar inverter into AC power (alternating current). This is the type of electricity that is used by appliances in your home. When buying a system, you can either choose between a string inverter, which is a central inverter that is located close to your switchboard, or a micro inverter which is a small inverter installed underneath each solar panel.
3. AC power flows through the switchboard and is used by your appliances
Once the electricity is converted into AC power, any appliances that are running in your home, use this electricity instead of purchasing power from the grid. This means you don't need to purchase as much electricity from your electricity retailer, saving you money.
4. Excess electricity is sent to the grid or a battery
Any electricity generated by your solar panels that isn't used by your home, is either sent to the grid, where in return you get paid a feed-in tariff from your electricity retailer; or is used to charge a battery.
5. A smart meter tracks and records all energy flows.
A smart meter tracks and records the energy flows in this whole process, so there's nothing extra you need to do. Each time you receive your electricity bill, you'll automatically see the reduction in your electricity bill and the feed-in tariff credits. You can also automatically draw energy from the grid, when you need to.