Sun hitting the panels on your roof creates electricity (Direct Current at 40 volts DC), A number of panels are joined in series to increase the voltage to around 300 Volts DC. This power is fed to an inverter which transforms the DC to AC (which is what comes out of a power point). The AC is then fed directly into your house at the switchboard. If you generate more electricity that you are using then the excess is sent to the grid (read: the lines outside your house). Depending on your agreement with your electricity supplier you may get paid for this excess electricity (commonly called Feed-In tariff).
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