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Photovoltaic Panels vs Solar Panels: What Is the Difference?

26 August 2025
Commercial solar panels
When exploring renewable energy options for your home or business, you’ll likely come across the terms solar panels and photovoltaic (PV) panels. Many people assume they’re the same thing, but that’s not strictly true. While both technologies harness energy from the sun, they do so in very different ways — one produces heat, the other generates electricity.

Understanding the difference between solar thermal and photovoltaic systems is key if you’re deciding which type of solar panel is best for your property. The right choice will depend on whether you’re a homeowner looking to cut household bills or a business aiming to reduce operating costs and carbon emissions.

What Are Solar Thermal Panels?

Solar thermal panels capture the sun’s energy and use it to heat water or air. They work by circulating fluid through collectors, which is then transferred into a hot water cylinder or heating system.

Many people assume solar thermal panels are the same as the solar panels seen on newer homes and commercial buildings, but they are quite different.

Solar thermal panels are designed only to capture the sun’s heat and use it to warm water or air. They typically consist of flat-plate collectors or evacuated tubes connected to a hot water system. While very efficient at producing hot water, they cannot generate electricity.

Solar thermal technology is highly efficient at converting sunlight into heat but limited in scope since it cannot generate electricity.

What Are Photovoltaic (PV) Panels?

Photovoltaic panels, often referred to as PV panels, convert sunlight into electricity. Made from semiconductor materials, they generate direct current (DC) power, which is then converted into alternating current (AC) via an inverter. This electricity can be used instantly, stored in batteries, or exported back to the grid.

PV systems are the most common choice in the UK for both homes and businesses because they provide long-term financial savings as well as environmental benefits.

Key Differences Between Solar Thermal and Photovoltaic Panels

Although both technologies are designed to capture energy from the sun, they serve very different purposes. Understanding the distinctions between solar thermal and photovoltaic (PV) panels is essential when deciding which solution is right for your home or business.

Type of Energy Captured

  • Solar Thermal Panels convert sunlight directly into heat. This heat typically warms water via fluid-filled collectors and a hot water cylinder.

  • Photovoltaic (PV) Panels convert sunlight into electricity using semiconductor cells (commonly silicon). An inverter then converts the DC electricity into AC for use in appliances or export to the grid.

Primary Applications

  • Solar thermal panels are mainly used to heat water in homes and can also support hot water needs in hotels, leisure centres, and healthcare facilities where demand is high.
  • Photovoltaic (PV) panels generate electricity for both domestic and commercial properties. They help cut household energy bills, power businesses such as offices or warehouses, and can store or export surplus electricity through battery systems

Efficiency and Output

  • Solar Thermal Panels are generally more efficient at capturing the sun’s energy (in terms of heat conversion) but limited in application since they cannot generate electricity.

  • Photovoltaic Panels are lightly less efficient in raw energy capture but far more versatile, as electricity can be used for almost any purpose or stored in batteries for later.

Space Requirements

  • Solar Thermal Panels usually require less roof space than PV systems but may only meet part of a building’s energy needs.

  • Photovoltaic Panels require more space to generate significant electricity but provide a more comprehensive energy solution, especially for larger commercial rooftops.

Return on Investment

  • Solar Thermal Panels tend to have lower installation costs but offer limited savings, as they only offset heating bills.

  • Photovoltaic Panels typically involve higher upfront investment but deliver stronger long-term savings, especially when paired with schemes like the Smart Export Guarantee (SEG) that pay for surplus energy exported to the grid.

Scalability

  • Solar Thermal Panels are suited for smaller-scale applications where hot water is the main requirement.

  • Photovoltaic Panels are highly scalable, from small domestic systems powering a single home to large commercial arrays supporting entire business operations.

How to Choose Between Solar Thermal and Photovoltaic Panels

The choice depends on your energy needs. Solar thermal panels are ideal if your priority is heating water, such as for large homes, pools, or businesses like hotels and leisure centres. Photovoltaic (PV) panels are better for generating electricity, cutting bills, and powering appliances or operations, making them suitable for most homes and commercial properties.

Consider space, cost, and long-term goals: solar thermal is cheaper and needs less roof space, while PV panels offer greater flexibility, scalability, and long-term savings.

Ready to Find the Right Solar Solution for Your Property?

Whether you’re a homeowner or a business, choosing the right solar solution can save money, reduce carbon emissions, and futureproof your property. At Project Zero, we specialise in both solar panels for homes and commercial solar installations, including photovoltaic and solar thermal systems.Our team will assess your property, recommend the best solution, and guide you through installation and ongoing support. Take the first step towards cleaner, more efficient energy today.

Contact us today to arrange a consultation and discover how solar panels can benefit your home or business.

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