Solar power converts energy from the sun into electricity. There are two basic methods of using solar power to generate electricity: concentrated solar power (CSP) plants and photovoltaic cells (PV). The CSP plants are more mechanical in nature. Sunlight is used to heat a fluid, which then operates a generator and produces electricity. It operates much like a conventional power plant, but the energy source is sunlight rather than fossil fuels such as coal or natural gas. The PV uses sunlight to move electrons in a solar cell, which produces electricity. There are few mechanical or moving parts with this type of operation.

CSP plants are the larger of the two. They can accommodate the needs of a small community or can generate enough electricity to flow into the grid and supplement power generated by other means. Parabolic troughs are curved collectors that concentrate light onto a receiver that heats up transfer fluid located within the trough. The heated fluid then runs a generator, which produces electricity.

Troughs can operate in parallel to make a collector field. The troughs are rounded so they can collect sunlight from all angles, eliminating the need to move as the day progresses. The trough systems in operation are hybrid facilities that use both solar power and fossil fuel to run generators. Towers use mirrors to track the sun and collect light. Dish systems use a solar dish to collect sunlight, which produces electricity through a generator.

PV operations are generally limited to smaller electricity production. They are becoming more common on houses and are used in a wide variety of systems where a power source is needed, but connection to a grid is not feasible. Such is the case with some flashing traffic signals, cell phones, and direct television. Homeowners who are able to generate more solar power than they need have the ability in some locations to sell the power back to their local utilities.

Solar power is still slightly more expensive than traditional fossil fuel options, but the cost for solar power is expected to decrease as more private and public utility plants appear and solar cell technology advances.

Many municipalities have installed solar power systems at locations with high energy demands, such as schools and municipal administration buildings. For example, Santa Clara, California, encourages residents and businesses to use solar energy for heating water. As part of the program, the city will install and maintain solar water-heating systems for swimming pools and domestic hot water. Businesses can also utilize the service for heating process water.

Oakland, California, uses one of the state's largest municipal solar projects to provide electricity to over 1,000 homes. What's called the 1.1 Megawatt City project uses more than 6,000 solar electric tiles and is estimated to eliminate 385 tons of carbon dioxide emissions a year.

Federal, state, and local organizations and governments fund incentives and rebate programs for homeowners who install residential solar units. These programs help offset the cost of installing home solar units. A variable sometimes left out of the economic calculation is that once a solar unit is paid for, the electricity is free.