Solar flares are the most powerful explosions in the solar system. They happen in the solar corona, the outer atmosphere of the Sun. Energy stored in the strong magnetic fields in the corona is released, heating the plasma to tens of millions of degrees and accelerating beams of charged particles to close to the speed of light. Flares can have significant effects ont he Earth and our space environment, especially satellites. I will show how new observations from telescopes in space, as well as computer simulations, are shedding new light on why flares happen and what are their effects.