Solar energy is obtained from the sun’s UV rays, which are captured through PV (Photovoltaic) panels and further converted into electrical energy. Being a renewable source, solar power significantly minimizes harmful GHG (Greenhouse Gas) emissions and tackles climate change.
There are three major types of solar power systems: grid-tied/on-grid solar power systems (connected to the local utility grid), off-grid solar power systems (for generating and storing electricity), and hybrid solar power systems (combining the features of grid-tie and off-grid solar power systems).
Before you know the cost and how to maximize efficiency, you need to have a clear understanding of a grid-tied solar system and how it works. We will also explore the pros, cons, and components of the grid-tied solar system that make it different from other systems.
What is a Grid-Tied Solar System?
A grid-tied solar system also known as on-grid solar system is connected to the local utility grid, where you can use electricity generated from solar panels while still having electricity connected to the grid. If your solar panels are producing more electricity than you consume, the excess energy can be sent back to the grid, which adds up as credits on your utility bill, and this process is known as net metering.
The popularity of grid-tied solar systems in residential installations has been constantly increasing due to the following reasons:
Grid-tied or on-grid systems come with a reduced cost compared to off-grid systems and battery storage is not required, which could save a portion of the expense. Hence, affordability to install and maintain makes grid-tied solar the most preferable.
Most of the states are offering net metering policies, through which homeowners can benefit a lot by receiving credits for excess-generated electricity that is later sent back to the grid.
Having a simpler installation and operation, grid-tied solar doesn’t require a battery, so it is simpler for you to maintain. In addition, it can be relied on a lot because whenever solar panel production is low, it draws electricity from the grid.
Grid-tied solar systems can be financially attractive with various federal and state incentives like tax credits, and rebates. These incentives compensate for the initial investment, making it accessible to a wide range of audiences.
How Do Grid-Tied Solar Systems Work?
Grid-tied solar power systems function in conjunction with the local electricity grid as they are interconnected, allowing solar energy usage generated by panels while having access to the electricity grid when needed. The grid-tied installation includes — solar panels, an inverter, and a connection to the grid.
If the electricity generated by solar panels isn’t immediately used in the home, the inverter sends the energy into the grid. And, this selling back to the grid is known as Net metering, where you receive credits for the excess energy generated.
A home with a grid-Tied system draws power from the grid if solar production is insufficient during cloudy days or at night. The inverter and connection to the grid ensure a hassle-free switching process to keep your home continuously powered.
Net metering is a very beneficial billing system, as the utility company adds credits to your electricity service number or account whenever produced electricity is more than consumed. And, those credits can be used later to compensate for future electricity bills.
Similarities of Grid-tied Systems to Off-grid and Hybrid Solar Systems:
All the 3 systems consist of solar panels and inverters to convert panel-generated energy (DC) into usable electricity (AC). Also, the installation procedure and equipment to capture and convert sun energy are all the same.
Differences between Grid-tied Systems to Off-grid and Hybrid Solar Systems:
- Grid-tied systems don’t need battery storage, as they directly draw power from the grid during low production of solar panels.
- Off-grid systems are not connected to the local utility grid and are completely independent. They require a battery to store excess energy to use while insufficient solar panel production.
- Hybrid systems combine the characteristics of both grid-tied and off-grid systems, by integrating battery storage while still being connected to the local utility grid.
Pros and Cons of Grid-Tied Solar System
The pros and cons of grid-tied solar systems include:
PROS:
- Lower Upfront Costs: Unlike the off-grid system, the grid-tied system doesn’t require any battery or additional components which reduces the initial costs.
- Net Metering: You can claim credits on your electricity bills by feeding the extra energy back into the grid.
- Simple Installation Process: The installation and setup process is simple due to fewer components required.
- High Reliability: You can withdraw continuous power from the grid if your solar panels aren’t producing sufficient energy during nights and power outages.
CONS:
- Huge Dependence on Grid: Your system will shut down during power outages rather than feeding back the power to the grid.
- No Energy Storage: It wouldn’t be possible to store excess energy during outages or peak hours of sunshine without a storage device such as a battery.
- Inconsistent Savings: Your savings on the utility bill depend upon the net metering policies and local electricity rates that change frequently over a certain time.
- Limited Access: Compared to the off-grid system, you will have limited control over your energy consumption and storage by depending on the utility grid.
How are Grid-Tied Solar System Different From Other Systems?
Solar energy systems are broadly divided into 3 main types: Grid-Tied, Off-Grid, and Hybrid systems where each of them have different features, operational methods, and equipment requirements.
Off-grid systems conduct their operations independently, not relying on the electrical grid, as they generate and store all the required energy onsite within the premises. Solar panel-generated electricity is stored in batteries for later use, but the off-grid systems face the challenge of requiring larger battery banks to have a reliable power supply. And, due to the additional equipment for more energy storage, it incurs higher upfront costs.
Hybrid systems provide a middle ground between grid-tied and off-grid systems, as they allow drawing power from the grid during low solar production. And, at the same time, they allow storing generated energy in batteries for later usage during power outages or peak demand times.
The difference between these 3 types of solar systems respective of their equipment and setup requirements vary:
- Grid-tied systems do not need battery storage, which reduces complexity and investment costs.
- Off-grid systems setup is complex and costlier because it requires additional components to ensure energy is accessible.
- Hybrid systems are more versatile, but at the same time, they are expensive and more complicated to install.
Components of Grid-Tied Solar System
A grid-tied solar system works while connected to the utility grid to draw power whenever required, and here are its key components:
- Solar Panels (Photovoltaic Modules)
The most visible component of the solar energy system is the solar panels, made up of Photovoltaic cells that convert sunlight into electricity. The most commonly found types of solar panels are monocrystalline, polycrystalline, and thin-film panels. Monocrystalline panels have high efficiency and space-saving design, whereas polycrystalline panels are less expensive and less efficient., Thin-film panels are lightweight and flexible, but less efficient than crystalline type of panels.
- Inverter
An inverter is the most important component that helps convert panel-generated DC (Direct Current) into AC (Alternating Current) electricity, which is usable in household appliances and compatible with the utility grid. However, there are different types of inverters including — string inverters, micro-inverters, and power optimizers.
- Mounting System
The mounting system is essential to ensure that panels are safely positioned at the best possible spot to absorb more amount of sunlight. Roof-mounted systems generally use racks, attached to the roof structure, whereas ground-mounted systems are installed either on poles or frames.
- Utility Meter
A utility meter helps measure the amount of electricity used from the grid and sent back to the grid. Most often, a grid-tied system uses a bidirectional meter to track both incoming and outgoing electricity so that homeowners benefit from net metering policies.
- Monitoring System
Most of the grid-tied solar systems come with an included monitoring system to keep track of energy generated and consumed in real time. However, this would require a specially designed display or a smartphone app, which could regularly notify you with insights into your system performance to help identify issues.
Cost of a Grid-Tied Solar System
The average installation cost of a grid-tied solar system in the United States mostly ranges from $15,000 to $24,000 without any solar incentives. However, the installation cost changes depending on the system size (measured in kW — kilowatts).
Over the past few years, the cost per watt for solar installations has been decreasing, such that residential systems cost about $2.40 to $3.30 per watt. And, this means a 6 kW system will cost around $15,000 and $20,000 before incentives.
Most importantly, you must know that the size of a grid-tied solar system directly influences its installation cost. Smaller systems around 3kW cost around $9,000 and larger systems of 10 kW tend to price from $24,000 or more.
The federal tax incentives have a major impact on the cost of solar installations, whereas, in 2024, homeowners would be able to deduct 30% of the solar system installation cost.
For example, a system of $20,000 would have a tax credit reduced up to $6,000, making the overall cost only $14,000. And, this incentive has been a major factor in driving more people to adopt solar energy across the globe.
Several factors that influence the overall cost of a grid-tied solar system are:
- System Size: Large-sized systems have a more affordable cost per watt.
- Location: Regions with strong solar policies have additional rebates and different labor costs, permitting fees, and local incentives.
- Type of Equipment: Advanced inverters and high-efficiency panels lead to higher costs but offer greater performance and savings over time.
- Installation Complexity: Roof type, angle, shading, and other complexities might require additional labor and equipment, which increases the overall cost.
- Solar Financing Options: Different purchase modes like — cash, loan, lease, or PPA (Power Purchase Agreement) impact the total cost and financial benefits.
How To Maximize The Efficiency Of The Grid-Tied System?
There are several major strategies to maximize the efficiency of a grid-tied solar system based on aspects like — choosing high-efficiency solar panels, incorporating solar inverters, optimal panel placement to avoid shade, and regular maintenance and cleaning.
- Choosing high-efficiency solar panels helps to convert a higher amount of sunlight into consumable electricity compared to traditional panels. Generally, panels with efficiency greater than 20% are considered to be highly efficient. Technologies like monocrystalline silicon are used for improved performance in low-light conditions and also offer higher energy output. Here is more detail about solar panel efficiency.
- Incorporating solar inverters plays an important role in converting the DC (Direct Current) generated by solar panels to AC (Alternating Current), making it usable for most household appliances. Therefore, selecting the right type of inverter will lead to greater efficiency of a solar system. And, there are many types of inverters which include — string inverters, micro-inverters, and power optimizers.
- Optimal panel placement to avoid shade is an influential point that helps to maximize capturing more amount of solar energy. As a result, the panels must be installed in locations, where direct sunlight is abundant and avoid shaded areas that have obstructions caused by trees, buildings, or any other.
- Regular maintenance and cleaning of solar panels is a must-follow point because any dust or dirt on the panel surface will reduce its efficiency. In locations that have heavy rainfall, panels are naturally clean to some extent whereas in dry climates, regular cleaning would be necessary. Most solar companies provide maintenance services, but these are some of the basic things that homeowners can do once in a while to keep their panels running efficiently.
Conclusion
Overall, you can opt for the grid-tied solar systems if you have access to a dependable and reliable electrical grid. Also, this system is suitable for those who are seeking solutions to reduce their electricity costs and at the same time willing to contribute to greater environmental wellness.
Moreover, homeowners would benefit a lot from the net metering policies, through which excess energy can be sold back to the grid and offset future energy bills. Therefore, grid-tied solar is an excellent opportunity to save on utility costs and maximize their property’s value.
Especially, grid-tied solar systems are especially suitable for people planning to change their lifestyle by using renewable energy but are seeking low upfront costs, residing in urban areas, and having stable access to the electricity grid. As these systems do not require battery storage, the consumer will not have to invest anything additional. In addition, if the individual is eligible for state and local financial incentives, then they can reduce their installation costs up to a great extent.
Ray is an avid reader and writer with over 25 years of experience serving various domestic and multinational private and public energy companies in the USA.