In this simple illustration, electricity is produced in 'direct current' form by photovoltaic solar panels, also known as modules. This energy is then converted to grid-compatible "Alternating Current" by an Inverter. Once converted, the electricity can be used to power household appliances or be sent back to the electric grid, running your electric meter backwards.  Your solar system will provide energy to the house during the day when it is sunny, but when it is too cloudy or at night, your house pulls energy from the grid.
 
For more information, go to the U.S. Department of Energy website about small solar systems, or check out the PA Department of Environmental Protection's Solar Energy website.