There are two basic solar panels types that you will come across. The first type is solar heating panels, and this refers to panels used to heat your household water. The second - discussed later in this article - is the solar electric panel.

Solar heating panels come in a variety of configurations. One popular set-up is the flat plate collector. This system uses plates exposed to the sun which contain sealed liquid-filled pipes. The liquid heats up and circulates via the pipes through the household water tank, which heats up the water. The effectiveness of this system depends to a great extent on the amount of thermal loss of the pipes while circulating the heated liquid towards the water tank.

A basic variation on this system is a homebuilt solar heater that uses the coolant grill of a discarded fridge to heat water. The household water circulates through the grill mounted in a glass-fronted panel which acts as a solar heat trap. In its most basic form this system might not be integrated with your household water supply, but could be used as a separate, portable system for a particular, limited use, for instance when you go camping.

Another version of the solar heating panels system works on the same basis as the flat plate collector mentioned above, with the main difference being that the heat collector pipes are vacuum sealed. This minimizes heat loss to a great extent, even during cold weather.

This system also uses circular collectors which have better ongoing exposure to sunlight during the course of the day.

The second main type of solar panel you will encounter if you do some research is the PV panel, or photovoltaic panel system. These are also called solar electric panels because they don't generate heat but they convert solar energy into electricity. PV panels can therefore be used to power just about anything in your household, from your hot water system to your laptop, fridge or stove.

How does a PV panel work? A PV panel consists of a set of silicon cells linked in series. When exposed to sunlight these cells convert the solar energy into electric current.

This current can then be used to charge a set of batteries, or it can be linked up to your household grid via an inverter to power your household appliances.

There are a number of different types of solar photovoltaic panels. Monocrystalline solar panels are manufactured from a single large crystal, and are considered to offer the most efficient panels, but also the most expensive. Then there are the more common cells found in Polycrystalline solar panels. These are cast blocks of silicon which may contain many small crystals.

As more and more homeowners are struggling to maintain a positive cashflow in difficult times, many of them are opting to build a solar panel system to make them less dependent on the local power grid. What has made photovoltaic solar panels popular - apart from how effectively they work - is the fact that they can be home built by just about anyone, even with little or no practical experience.