To generate free electricity with solar panels, install a solar energy system and sustain it until energy savings compensate for initial and maintenance expenses. The cost-effectiveness of solar panels depends on sunlight availability, applicable tax incentives, electricity usage and whether the solar system connects to the utility grid.
The weather patterns and amount of sunlight in the local area determine how effectively solar panels can function. The position of the panels is also important, since even a small amount of shade can substantially decrease the efficiency of most types of panel. Even the incline of the roof and the direction it faces have an impact.
The amount of electricity used in a household affects how large a solar array is necessary to provide power; bigger arrays are more expensive to install and require more roof space. Whether a consumer want to use entirely solar energy or remain connected to the utility grid also affects the expenses involved in solar energy.
If the goal is to use entirely solar energy to power a household, then HowStuffWorks recommends designing the solar system for the month with the least sunlight so that there is sufficient energy throughout the year. Using solar as a sole source of energy requires additional equipment, since the sun does not shine every hour of the day or in every weather condition. Self-sufficient systems require an alternative source of energy for when the solar panels are not active, such as a wind turbine, a backup generator or a battery. Batteries allow the storage of daylight solar energy so that electricity can be used at any time, but they add to initial expenses as well as increasing ongoing costs for maintenance and replacement.
If the solar energy system is connected to the utility grid, the household can purchase energy from the utility company in hours without sunlight. It is also possible to sell extra electricity back to utility companies when the solar panels are active. Connecting to the utility grid requires specific equipment, installation procedures and precautions.
One way to defer the expense of installing a solar energy system is to take advantage of tax incentives, which exist on the federal level and sometimes at a local level, as of February 2015. Changes in solar technology have gradually led to decreases in the price of solar panels and increases in their efficiency.