We’ll skip the technical details of how semi-conductive materials generate power via the photovoltaic effect. In a nutshell, a solar panel generates direct current (DC) power when it collects sunlight. The power that comes out of your home or business’s outlets, on the other hand, is alternating current (AC). To match, you’ll need a solar inverter to convert DC electricity from your solar panels into usable AC electricity to power your home or business when you go solar.