Sunlight is captured with solar panels using photovoltaic (pv) technology.
The inverter converts the DC (Direct Current) power to AC (Alternating Current) power to either power your home or to export to the grid.
How do you know whether to use the power, or to export it? This is all done here, at the Switchboard; and you don't even need to worry about it, it's automatic!
At this stage, you are consuming power in your home.
Instead of requesting electricity from the Grid, you are using the free electricity your solar panel's have generated from the Sun.
Here, you are generating more than you are consuming.
So no power is wasted, the excess electricity generation makes its way back to the Grid and you are paid for this electricity. The rate you are receiving for the electricity export depends upon whom your energy retailer is.
It is suggested to do your research, and look out for a good rate as this could make a big difference to you.