The primary way that solar energy can reduce CO2 emissions is by providing a clean, renewable source of electricity. Solar energy generates energy by using electrons that are acquired from the sun's energy rather than burning fossil fuels or other materials.

In terms of solar energy output, a hybrid solar energy system is comparable to a grid-tied system, but it also offers the advantage of grid independence. Regardless of the grid's availability, it runs constantly. An energy backup feature of a hybrid solar energy system allows it to store surplus energy that may be used at night. A hybrid solar energy system continues to function without interruption even in the case of a power loss or blackout due to its ability to store energy in this way. Grid-tied solar energy systems are directly connected to the grid and cannot function when the grid is down. Only when the sun is out and the power is on to the grid can they produce solar energy. These systems are less efficient than hybrid solar energy systems because they cannot produce electricity during severe power outages and load shedding. The same is true for grid-connected solar energy installations. Therefore, extra energy cannot be kept for later use. However, these systems do support net metering, which enables the sale of surplus power to the grid.

Owners of solar energy systems receive credit for the electricity they supply to the grid through a billing system called net metering. For instance, if you install PV system on the roof of your house, it can produce more power throughout the day than you need for your family. The bi-directional electricity meter will monitor the energy that enters the grid if the residence is net-metered, and the sold units will be credited against off-peak units on the customer bill. Only the customer's "net" energy usage is charged.

When the sun shines the PV cells on a solar panel capture the energy from the sun's rays. In reaction to an internal electrical field within the cell, this energy generates electrical charges that move, which results in the flow of electricity. Direct current (DC) power is produced throughout the day by solar panels by absorbing the sun's energy. The DC power is then sent via an inverter to transform it into useable AC electricity as the majority of houses and businesses run on alternating current (AC). You then have the option of using the electricity within your home or returning it to the power grid.