Photovoltaic cells, or solar cells, convert sunlight directly into electricity. Photovoltaic systems use large panels comprised of many solar cells connected together to work in unison. The photovoltaic panels are usually mounted on the roof of the house, preferably on a south-facing slope.

 Because photovoltaic cells produce dc (direct current) power, systems usually include a device called an inverter, which converts the dc power to ac (alternating current) power to match it to the electric utility's power supply. Although homes can be completely "off the electric grid" and disconnected from the electric utility, this requires large battery systems to store the electricity produced during the day.

 Most homeowners prefer systems without battery storage that are connected to the power grid. In some states, electric utilities will allow the photovoltaic system to add electricity back into the power grid when the system is producing more electricity than is being used in the home. In this arrangement, called "net metering," the electric meter will literally run back wards, reducing the home owner's electric bill.

 To extend the economics of photovoltaic systems, and to make their use in buildings more appealing, new products that integrate photovoltaic cells into building materials are now coming on the market. Colored skylights, awnings, and even roof shingles are now incorporating photovoltaics, allowing them to generate electricity while serving a purpose in the home's exterior. The roof shingles, for instance, look nearly identical to asphalt roof shingles and will serve the same purpose, while also generating electricity.