See how much you can save with a grid-tied solar system

See how much you can save with a grid-tied solar system

To the grid and back: Grid-tied solar systems explained

Written by Zeeshan Hyder

Updated August 12, 2021

10 minutes read

Categories: Net metering, Solar inverters, Solar panels

In this blog, we take an in-depth look at grid-tied solar systems. These are solar power systems that are connected to the electricity grid — and work without any battery backup equipment.

Most Americans who have solar panels installed on their roofs have a grid-tied solar system; and despite recent improvements in battery technology, grid-tied remains the most popular option for homeowners going solar today.

If you’re unfamiliar with how these systems work, check out this short video showing grid-tied solar panels in action for a typical American home.

If you’re after a more detailed explanation of what a grid-tied solar system is, be sure to read through the entirety of this blog! We explain how grid-tied solar systems work — and whether they’re the right type of solar panel system for you.

A quick note: This type of system is also known by many other names, such as ‘on-grid,’ ‘grid-connect(ed),’ ‘grid-intertied’ and ‘grid-direct’ solar systems. They all refer to the same thing.

What is a grid-tied solar system?

All photovoltaic (PV) solar power systems generate power the same way: by using solar panels to convert sunlight into DC electricity. So, what makes grid-tied solar systems different?

  1. Grid-tied solar systems are connected to the utility grid via a grid-tie inverter. The grid-tie inverter enables a two-way transfer of power between the home’s solar-powered system and the grid.
  2. They don’t include any battery storage — they use the grid as a battery instead.

That means that when a grid-tied system produces more power than the home needs, the surplus power isn’t wasted. The system uses its connection to the grid to export the excess power to the utility.

It also means that the house doesn’t run out of power. When the solar panels aren’t producing enough electricity, the system can import the shortfall from the grid.

Sunlight hits panels, energy then flows to the inverter, then the house, then onwards to the grid.

An illustration of how a grid-tied solar system functions. The solar power generated is first used to power the home; surplus power is then exported to the electricity grid. Image source: PH Renewables

A grid-tied system’s two-way relationship with the grid offers homeowners a major benefit: they can use it to take advantage of net metering.

Where available, net metering lets homeowners earn bill credits for every watt of excess solar energy they send back to the grid. These ‘payments’ allow the homeowner to dramatically reduce, or even eliminate, their utility usage charges.

Check out our breakdown of net metering to learn more about this popular incentive.

What other types of solar system setups are there?

Home solar installations that aren't grid-tied solar systems will fall into one of these two categories:

Hybrid solar system (aka a grid-tied system with battery backup)

Hybrid systems include a battery storage solution such as the Tesla Powerwall, LG Chem Resu, or the sonnen ecoBatterie, while remaining connected to the electricity grid.

The addition of a battery system may not sound like much, but it makes hybrid solar systems function differently — and cost a lot more — than grid-tied solar systems.

Off-grid solar system

This is a solar energy system that operates completely independently of the grid. As there is no option of drawing power from the utility, such setups require a much larger number of panels, paired with substantial battery storage.

SolarReviews explores the pros and cons of off-grid solar in this blog.

Now, let’s return to grid-tied solar panels and see what’s great about them — and what’s not.

Pros of grid-tied solar systems

Here’s a quick rundown of the advantages of grid-tied solar panels:

  • Cheapest type of solar panel system: This system requires the least amount of equipment, and has the simplest installation
  • Most savings: Selling electricity back to the grid to eliminate your costs - especially with net metering
  • More reliable than other PV setups: As it requires the least amount of equipment, a grid-tied solar system has the fewest points of potential failure

Cons of grid-tied solar systems

There's really only one disadvantage to a grid-connected system:

No power during grid outages: Grid-tied solar systems lack battery storage — which means that they provide no backup power.

Furthermore, in the event of a power outage during the day, you will not be able to utilize your solar panels. As a safety feature, grid-tied solar systems are designed to switch off when the grid goes down.

SolarReviews explores the issue of using solar as a source of backup power in this blog.

How a grid-tied solar system works throughout a day

When a household installs solar panels and connects them to the grid, the home then becomes both a consumer and producer of electricity. As described earlier, this is possible thanks to the two-way relationship that a grid-tied solar system creates between the home and the utility.

What’s really interesting — at least to solar geeks such as myself — is the way the relationship plays out. The direction and volume of energy flow is always changing! The home will at times be exporting power, and other times importing it.

That is because both the power generated by the solar panels, as well as the home’s energy usage, are never constant. The former changes based on the amount of sunshine available, while the latter varies based on the home’s fluctuating consumption patterns.

To demonstrate how and why this happens, let’s look at how grid-tied solar panels operate for a typical American household over the course of a day.

Grid-tied solar system at night

Let’s begin at night, just before daybreak. The home isn’t using much power during this time — it’s typically running a fridge, some phone chargers and maybe a heating or cooling system.

There’s no solar power available at night, so the home’s usage needs will be met with power from the grid.

a home with solar panels during nighttime

Night: The solar panels are in sleep mode.

Grid-tied solar system in the morning

As the sun rises, the family inside the home wakes up and prepares for the day ahead. As they do so, energy use spikes: they’ll be using microwaves, hairdryers, electric water heating and other power-hungry devices.

But it’s not just the family that has woken up — the solar panels on the roof have, too! As sunlight hits the panels, they start generating power. But the sun isn’t very strong yet, so solar production will be limited, and the home still has to import from the grid.

a house with solar panels in the morning

Morning: The solar panels wake up, but solar output is low.

Grid-tied solar system at noon

We now enter midday — when the sun’s rays are at their strongest. This is when solar panels reach their maximum output.

This is also when electricity usage is at its lowest, as most — if not all — of the home’s residents are typically out for work, school, or errands.

The system is now producing lots of excess power. In an on-grid solar system, the surplus will automatically be exported to the grid in exchange for bill credits. In other words, you sell power to the grid and use the money earned to pay off your utility bill.

a home with solar panels in midday with the sun shining

Midday: High solar output means lots of excess power to export to the grid.

The best part is, if you live in a state with full net metering, you’ll get the full retail rate for your exported power (that is, you can sell electricity to the grid at the same rate you buy it for).

You can check out our state solar guides to see whether you’re eligible for full retail net metering depending on where you live.

Grid-tied solar system in the afternoon

It’s the afternoon and the sun is lower in the sky. There is now less sunlight directly hitting the solar panels, which leads to a moderate drop in solar energy production.

The home’s power needs are still relatively low at this time — after all, family members are likely still out, and lights aren’t needed yet. The system will continue exporting power to the grid in return for on-bill credits.

a home with solar panels during the afternoon

Afternoon: Solar output drops a bit, but there's still excess power to export.

Grid-tied solar system in the evening

The setting of the sun means that solar generation comes to an end for the day. Evening is also when energy usage peaks: family members return home and use the lights, home entertainment devices, kitchen appliances, cooling or heating, and more.

The energy transfer with the grid now switches direction — the home stops exporting and starts importing energy in order to meet the power demands.

a house with solar panels during evening with the moon shiningEvening: No more solar, so the system goes back to importing from the grid.

Grid-tied solar system at night (again)

At night, energy needs drop down. The power demand will be met entirely from the grid — until the sun rises and the on-grid solar system starts another cycle of producing and exporting.

How a grid-tied solar system works over the course of a year

The direction of energy transfers between the home and the grid isn’t just affected by the time of day — it’s also impacted by the seasons.

As the seasons change, so does the amount of sunlight that hits the panels. At the same, changes in weather impact the electricity required for cooling and heating, which happen to be the two biggest users of household energy.

Combined, changes in sunlight availability and weather mean that a grid-tied solar system’s level of imports and exports vary greatly by season.

Let’s take a look at how this plays out for a typical home throughout the year:


In summer, when the days are long and sunshine plentiful, homes with on-grid systems export more power than they import. This means that the homeowner can save up credits for use later.

(Note: Policies for dealing with excess bill credits may vary by state and utility).

Spring and Fall

Mild weather means moderate power usage, as homes are less likely to require heating or cooling. At this time of year, grid-tied solar systems also produce reasonable amounts of power, so electricity imports and exports tend to be in balance.


Winter has the shortest days and weakest sunlight, and thus, the lowest solar output. Power usage is also usually quite high at this time, due to high heating usage. Your system will usually import more power over this period than it exports.

Takeaway: Summer exports offset high winter usage

Based on the scenario laid out above, a home with grid-tied solar panels will generate lots of excess solar power during the summer. The homeowner can then carry these credits over and use them during the winter, when their grid imports are higher than solar power exports.

In other words, the high solar generation (and exports) over the summer serve to cancel out the relatively high imports of the winter. In fact, with a properly-designed system, a home with grid-tied solar panels can even end up with zero net electricity usage charges for the year.

What equipment do you need for a grid-tied solar system?

Grid-tied systems are the easiest solar systems to install. They require the least amount of equipment, as there is no on-site storage equipment or wiring to deal with.

All you need for a grid-tied solar system installation is:

  • Solar panels: These will generate DC electricity. A typical 6 kilowatt solar power system would require roughly 20 individual panels.
  • Racking and mounting: These serve to hold the solar panels in place, as well as allow for ventilation to cool the panels.
  • Wiring: This conducts the power from the solar panels to the inverter, and then onwards to the home or net meter.
  • Solar grid-tie inverter: The grid-tie inverter converts the DC electricity to AC electricity usable by both the house and grid. It also assesses energy flows in real time to determine if solar output should be used in the home or exported. As this is the most common type of solar inverter, this is often referred to simply as an ‘inverter.’
  • Net meter: This is a meter that allows and monitors the two-way exchange of power between the home and utility company. If not already installed in your home, the net meter will be provided by the utility once the grid-tied solar system is ready to be connected to the grid.

How much does a grid-tied solar system cost?

The average cost of a typical 6 kW grid-tied solar system is $13,356 after applying the solar tax credit. This figure is based on cost data compiled in January 2020.

However, solar system cost can vary quite a bit based on the state in which you live, the brand of solar panels you choose, and even the pitch of your roof.

To see a live price for a solar panel system customized for your home, I recommend you use our advanced solar calculator. It’ll tell you everything you need to know about installing solar panels on your home. You can start by entering your details below.

Verdict: Grid-tied solar panels are the best option for most homes

The biggest advantage of grid-tied solar systems is that they are much cheaper than other types of solar systems.

Their lower cost means higher monthly savings, a higher return on investment (ROI), and the shortest payback period.

If you’re curious to see how much a grid-tied solar system would cost for your home — and how much money it can save you — enter your details into the calculator below to receive a custom solar estimate.

Author: Zeeshan Hyder Zeeshan Hyder LinkedIn

Zeeshan is passionate about promoting renewable energy and tackling climate change. He developed these interests while studying at beautiful Middlebury College, Vermont, which has a strong focus on sustainability. He has previously worked in the humanitarian sector — for Doctors Without Borders — and in communications and journalism.