When the sun is shining, solar panels convert sunlight into DC (direct current) electricity. The solar inverter converts this electricity into AC (alternating current) power for use in your home. Your home appliances (fridge, dishwasher, pool pumps etc.) use this power instead of drawing power from the electricity grid.
Any excess electricity generated by solar panels but not used by appliances is sent back (exported) to the electricity grid or used to charge a solar battery. Electricity Retailers pay a feed-in tariff for any electricity sent back to the grid.
Solar generation, consumption and export is tracked and recorded through a smart meter, providing the data for electricity billing.
Solar systems are most effective when they are well positioned (north-facing is optimal, but not essential) and exposed to enough sunlight without obstruction by shade caused from trees, power lines or other structures.