Photovoltaic panels (or PV panels) are typically flat, rectangular boxes full of cells which capture the sun's energy and turn it into DC (direct current) electricity. This current can be converted into AC (alternating current) by means of an inverter and used in a normal, grid-connected home.
PV panels are the most common, best-known source of renewable electricity. They're at the top of the renewable energy popularity chart, with wind turbines coming in a distant second place and all the other options somewhere further down.
They are also the most frequently encouraged option, with government schemes offering incentives for individuals and businesses willing to make the switch.
Unfortunately, they're also very expensive.
To be blunt, it is extremely important to look at every other way to reduce your electricity usage before you look at PV panels. You'll still need them if you want to get a net-zero effect for your home but most of the building efficiency options have a much cheaper payoff.
For example, insulating your attic for a few hundred dollars could save you as much electricity (in heating) throughout the year as a PV panel installation worth thousands. The same goes for replacing your drafty windows, air-sealing your walls or installing under-floor insulation... even just replacing all your old energy-hungry appliances with new, Energy Star versions can save plenty.
Don't forget to check for incentives with all the agencies you can find. Federal, state and local sources have all been known to offer grants and other incentives for people who want to switch to solar power. Combinations of incentive programs can reduce installation costs by more than 50%, so take full advantage!
There are even situations when it can be cheaper to install PV panels than to use grid-tied power. Remote locations and low-use homes (holiday cabins and so on) may find it cheaper to install a solar power setup and run an entirely off-grid system than to lay cable for several miles to connect to the local power supply.