How do Solar Panels Generate Electricity in the UK?

Written-by

Janet Richardson

Reviewed-by

Richard Burdett

Updated on

Feb 20, 2026

How do Solar Panels Generate Electricity in the UK?

Solar energy is a clean, reliable, and ideal source of renewable energy. It can be used to power your appliances or heat the water in your home or business, all without creating emissions or pollution.

In simple terms, solar panels use photovoltaic cells that absorb energy from the sun and convert it into electricity. Although the basic concept is simple, a complete solar panel system involves multiple components working together. This includes panels, inverters, mounting systems and electrical connections.

This article explains how solar panels generate electricity and explores each part of the system in more detail. 

Why solar panels need an inverter

An inverter is a crucial part of a solar power system as its job is to convert the direct current (DC) electricity generated by your solar panels into 230-volt alternating current (AC) electricity for use in your home or business. This electricity can be put to immediate use by connecting the inverter directly to a dedicated circuit breaker in the electrical panel. Inverters can be placed inside or outside your home or business though it is important to bear in mind that the location of your inverter can impact the efficiency and overall performance of your solar energy system.

Here are some of the factors that you should consider when placing your inverter:

• Ideally, the solar inverter should be positioned as near as possible to your solar panels to avoid energy loss due to long cable runs and reduced voltage drop. This will help increase the overall system efficiency. It’s also important to locate the inverter to allow for easy access to monitoring and communication devices such as Wi-Fi or ethernet connections. This will enable you to monitor your solar system’s performance in real time. 
• As inverters may require occasional maintenance or repairs you should ensure ease of access when choosing the location for your inverter. You should also avoid obstructing the area where your inverter is located. 
• Inverters should be protected from the elements, such as direct sunlight, rain, snow, and excessive heat to ensure the inverter’s longevity and performance. An outdoor-rated inverter enclosure or wall-mounted box can provide the necessary protection.
• It’s important to ensure there is adequate airflow around the inverter to prevent overheating. 
• Inverters can produce some noise when they are working especially if they have fans or cooling systems. You can either choose a location for the inverter that isn’t too close to areas where you work or need quiet or opt for inverters that are specially designed to be quieter. 
• You might want to consider installing security measures, such as a lockable enclosure as inverters can be attractive to thieves due to their value. Alternatively, place the inverter in a less visible place to deter theft.
• If you think you might expand your solar panel array in the future, you may want to make sure that the area selected for your inverter will be able to accommodate additional inverters or manage an increased electrical load. 
• Make sure that you comply with local electrical codes and regulations when placing the inverter. You should take advice from a professional installer or electrician about this. 
• If you are concerned about how the placement of the inverter may affect the appearance of your home choose a location that minimises visual impact. 

As inverters are electric and electronic equipment it’s best to keep them cool so it’s usually recommended that they are installed in a garage, or utility room, or some models can be mounted outside. In a residential application, the inverter is often mounted to the exterior sidewall of the home near the electrical main or sub-panels. The more modern models of inverter allow you to use them to monitor your power generation and usage levels. Depending on the model, you will be able to access these details either online or via an app.

Apart from converting direct current (DC) to alternating current (AC) inverters can maximise power output, communicate with the National Grid, provide feedback information about power production, and ensure your solar PV system is operating safely. 

There are four main types of inverters, string inverters, microinverters, hybrid inverters, and power optimisers. Although they all have a similar part to play there are significant differences between them.

A string inverter will be used for most domestic setups that require multiple solar panels. As the name suggests, a string inverter also known as a central inverter works by each solar panel being wired into a central inverter much like a series of strings coming together, and is designed to manage and convert the power from groups or all of the solar panels. A string system needs all the panels in the series to be exposed to the same environment. To give an example, if the series doesn’t have the same pitch and orientation the panel’s power output can be seriously affected. However, with an east-south setup where the power output of each will be a little different, you can separate east and west onto separate strings. String inverters are popular because they are cheaper than other types of inverters.

There are some disadvantages that come with these inverters such as: 

• Poor performance in low light and shading
• Lesser power output compared with microinverters

There are design limitations

• Requires a minimum number of solar panels to begin power generation 
• They are not inherently less safe, but they lack module-level rapid shutdown and optimisation features found in some MLPE systems.

Microinverters are the other type of inverters most likely to be used for a domestic setup. A microinverter differs from a string inverter in that a microinverter is attached to each solar panel within the system allowing for the independent conversion of each panel’s output locally whereas a traditional string inverter converts the output of all the panels within the system. 

Despite microinverters being more expensive upfront there are many benefits to installing them. Here are some of the benefits of microinverters:

• Increased energy production due to individual panel optimisation
• Improved system reliability
• Simpler installation and maintenance procedures
• Real-time monitoring of individual panels to help with maintenance
• Overall power impact is not affected by shading
• Safer AC-optimised design 

Hybrid solar inverters combine the role of a traditional solar inverter with a battery storage inverter into one unit.

This means that a hybrid inverter can store incoming energy in direct current (DC) as well as convert the DC into AC at the same time as sending any surplus DC power to be stored in a solar battery or to be sold to the grid. If the stored energy is needed the inverter can then convert the electricity to AC to be used in your household. 

This hybrid approach allows for greater flexibility and control over energy usage as well as enabling excess energy to be stored for use in the evenings when the sun isn’t shining. This inverter is the perfect solution if you are considering installing solar panels with a solar battery.

However, there are a few disadvantages such as:

• They’re about twice as expensive as standard string inverters
• If you have already installed a solar panel system, it is cheaper to install an AC-coupled inverter instead
• They often work together with DC-coupled batteries

Power inverters are also referred to as power optimisers. They operate similarly to a microinverter in that each solar panel has its own inverter. This allows for power to be controlled on an individual panel level and for their performance to be monitored. 

The main way they differ from microinverters is that the DC electricity generated by the solar panel is not converted locally. The DC electricity is instead transferred through to a traditional string inverter. Power inverters are a cheaper alternative to microinverters and the impact of shading on overall output is also limited. 

The inverter, electricity production meter, and electricity net meter are connected, so that power that is produced by your solar electric system will first be consumed by the electrical loads that are currently in operation. The balance of power that is created by your solar system then passes through your electrical panel before heading out onto the grid. Whenever you are producing more electricity than you are consuming at the time, your utility meter will record export to the grid.

Types of solar inverters and optimisation systems

Solar optimisers are devices used to maximise the energy output of a Solar Photovoltaic system. They are the Module Level Power Electronics (MLPE) that can be added to a solar panel installation so that each solar panel produces its maximum energy output. 

An unshaded, south-facing roof will provide the optimal setting for your solar panel system because the roof is exposed to the sun’s energy for the longest period. The ideal roof for solar panels has an inclination of between 40 to 30 degrees.  

Solar panel systems facing east or west can still work well but they may get around 10–20% less energy than a system facing directly south. You can face some panels east to get more solar electricity in the morning, or west to get more solar energy in the afternoons. 

Not every roof can provide the correct orientation or angle of inclination to take full advantage of the energy the sun provides. Some systems have been designed with pivoting panels that automatically track the sun and its journey across the sky. 

Another important factor to take into consideration is how much roof space you have available for your solar panel system. The first thing to take into account is of course the size of your roof and whether you can use all of that space. Chimneys, skylights, and roof windows can get in the way and decrease the available space that can be used. 

Calculating the area you have available can be tricky, but you can start by working out the total roof area by multiplying your roof length by its slope height and then multiplying this by two. You then need to take into account how much space is taken up by chimneys, skylights, etc, and deduct that from the total roof area. You will also have to consider any parts of the roof that are constantly shaded. To give you an idea, the space that is likely to be needed if you are installing a 4kW solar system comprised of 10 panels (1722 x 1134 x 30) would be between 20 to 25 m2.

Solar energy batteries and inverters don’t go on the roof, they can be installed on external walls, in a garage or utility room. 

It’s also important that panels never extend beyond the edge of the roof as the wind can be stronger there. To keep your property safe and to abide by Microgeneration Certification Scheme (MCS) regulations you should try and maintain a margin of 30 cm around the panels.

How solar electricity is used and exported

As solar panels absorb sunlight and convert it into electricity that can be used in our homes or businesses there will be times when you have more available electricity than you can use. This is when net metering comes into play. 

For solar electric systems that are tied to the utility grid, the DC power from the solar array is converted into 230V AC power (single-phase, or 400V three-phase for some commercial systems) before being fed directly into the utility power distribution system of the building. The power is net-metered, which means that it reduces the demand for power from the utility when the solar array is generating electricity. As a result, the utility bills are lowered.

The systems that are tied to the grid will shut off automatically if the utility power goes offline, preventing power from being fed back into the grid during a power outage. Solar systems that fall under this category are known as on-grid or battery-less.

Through the ‘net metering’ system, solar panel owners can also be rewarded for the excess energy their solar systems produce, which is sent back into the grid. For homeowners who produce their solar power, there is a government-backed scheme that allows you to ‘sell’ any excess energy you produce to the grid in exchange for payment. 

The Smart Export Guarantee (SEG)

The first government-backed scheme which ran until 2019 was the Feed-in-Tariff. The scheme was set up to incentivise people to switch to renewable energy technology. Under this scheme, utility companies paid a fixed rate for electricity exported to the grid and guaranteed these payments for up to 20 years. 

When this scheme closed it was quickly replaced with the Smart Export Guarantee (SEG). This scheme is not a form of net metering but an export payment mechanism which can earn solar panel owners a rate per unit of electricity they send to the grid.

Though not nearly as generous a scheme as the Feed-in-Tariff the SEG can still greatly benefit solar energy generators, with expected annual earnings of between £80 - £165. If you add this to the savings solar panels generate, the additional income can speed up the return on your solar installation investment. 

For homeowners in the UK export payments under the Smart Export Guarantee offer significant benefits that make investing in renewable energy an attractive option. The Smart Export Guarantee (SEG) is the primary export tariff scheme available in the UK, which helps by adding increased value to many renewable energy installations. The more people contribute their renewable energy to the grid, the more our overall energy supply becomes cleaner and greener.

The SEG is helping to create a system that not only compensates energy producers for their contributions to the grid but also creates a more inclusive and decentralised energy model. This is one way that people can be empowered to engage in the fight against climate change. 

Schemes like the SEG paves the way for a cleaner and more sustainable future by making it possible to switch to alternatives such as solar energy from fossil fuel-based energy.

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