The most common types of solar energy systems for residential and light commercial use are Solar Thermal and Photovoltaic or PV. With the curent federal and state incentives for renewable enrgy, both types of systems are becoming much more affordable with much shorter pay back times.

Solar Thermal systems are usually used for domestic hot water heating and space heating. A basic solar thermal system consists of sollar collectors, hot water storage tank, heat exchanger, controller, pump and the valves and pipes connecting them together. Flat plate collector consists of a black flat plate absorber, encased in a transparent insulated cover to reduce heat loss. Inside the absorber there are pipes that carry heated water, or mixture of water and propylene glycol (food grade antifreeze) into a hot water storage tank. The heated liquid is circulated through a heat exchanger inside the tank to heat the water in the tank.

Evacuated (vacuum) tube collector consists of a series of vacuum glass tubes, that prevent conduction heat loss from the absorbers inside the tubes. The rest of the theory is the same as with flat plate, but due to the design, absorbers inside the tubes have a much better exposure to the sun. This type of collector can be two to three times more efficient then the flat plate with only slight increase in cost. They are practical when space on the roof is limited.

Photovoltaic or PV arrays are made up of solar cells, similar to those in the solar powered calculators. The cells are made of semiconducting materials that release electrons from their atoms when hit by the sun light. This flow of electrons produces electricity. The process of converting light (photons) to electricity is called the photovoltaic (PV) effect.

Solar Energy Basics from National Renewable Energy Laboratory
Solar Energy Technology Programs by DOE
Energy Facts from Solar Energy International
Incentives for Solar Energy