The term "solar energy" casually refers to electromagnetic radiation emitted by the Sun. It can be captured and converted to other usable forms of energy. For example, through photosynthesis, plants utilize sunlight to grow and reproduce. We also have learned how to harness this nearly limitless resource and use for our needs.

USES FOR RENEWABLE SOLAR ENERGY

Most guides state that Sun's irradiance can be used for two things: to heat objects and to produce electricity. In reality, with the right equipment sunlight can also be converted to chemical energy in fuels. However this process is still in R&D stage and is not quite suitable for residential applications. By the way, some tutorials claim that sunlight is the source for all forms of renewable energy on our planet. This is incorrect because it neglects such forms of energy as gravitation and geothermal. The main solar uses in today's homes are pool and hot water heating and generating electricity with photovoltaic panels. In general, heating items from sunlight requires little more than placing an object in the sun and creating a means through which the heat will remain in it. Swimming pools can be heated using sunlight by covering them with special covers that trap the heat in the water. Generating solar electricity is more complex. It can be done in several different ways. Solar cells, also known as photovoltaic (PV) devices, directly convert the light's energy into electricity in the form of DC voltage. These cells can be combined into panels, which in turn can be connected into arrays. Solar electricity is used to feed various electric loads from small calculators to large power plants. Since the PV cells produce DC voltage, you need to use DC-AC inverters for all the conventional equipment requiring AC power (see this diagram of solar generator). Concentrating solar power plants also create electricity using sunlight. However in these plants, there is an intermediate energy carrier. Special thermal collectors use the heat from the sun to warm a fluid and create steam. The steam then powers the prime mover of an electric generator, which makes electricity via electromagnetic induction.

PROS

Like all forms of power conversion, sunlight as a fuel has its advantages and disadvantages. The primary benefit of sunlight energy is its renewability. The sun shines somewhere in the globe every day. Unlike fossil fuels, it will never be used up. Even on cloudy days, some of the radiated energy seeps through the clouds to the surface below, providing enough power to fuel, for example, hand-held electronics. The operation of solar powered systems produces no pollution. There are various federal, state and utility-sponsored rebates and credits for qualified grid-connected systems.

CONS

Using sunlight for water heating can be quite efficient and cost effective. Using sunlight for electricity however, has two primary drawbacks.
First, it is not constant. You do not know from one day to the next how much energy your solar panels will be able to generate. This is a problem especially in areas where overcast days outnumber sunny days. Because of this, it is not practical to use it as the prime power source. If you are off grid you may need to supplement solar power by other energy sources, such as wind turbines or diesel-fueled electric gensets. Otherwise, you have to significantly oversize the surface area of the PV array and batteries to be able to collect and store the excess energy to be used when sun does not shine. If you have a limited space, you may not be able to benefit much from this renewable resource.
Secondly, while sunlight of course is free, the equipment needed to capture and convert it to electricity is quite expensive both for homeowners and for utilities. Likewise, while solar generators are pollution free, some pollution are nevertheless produced in the process of their manufacturing, transportation and installation.
Currently an average net cost of a PV system installation is about $7,000 per kilowatt. The so-called levelized cost of electricity produced on new photovoltaic power plants is about $0.16 per kW-hour. This value is still much higher than the cost of electricity generation from coal and natural gas. As the result, in 2010 less than 0.1% of total US energy consumption came from photoelectric systems. However, in applications where an electric grid is not available, like in space for instance, sunlight can be a very cost-effective source of renewable energy.