Cute house with solar panels.

The Quick Guide To Grid-Tied Solar Systems


Although it might sound appealing to live in an off-grid home and be completely energy-independent, the vast majority of solar energy systems are grid-tied. This means they are connected to the utility grid.

The electric grid is a network for electricity delivery that carries power from producers to consumers. It includes a lot of necessary infrastructure, such as electrical substations and power plants.

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What Is A Grid-Tied Solar System?

Grid-tied homes are connected to the power grid, and the local utility company manages their power. Grid-tied solar systems allow the home to receive grid power when the solar panels don’t receive sunlight, like on cloudy days or at night.

Many utility companies offer net metering programs, which credit homeowners for the solar electricity they produce, typically at a retail rate. These credits can offset charges incurred when solar homeowners draw power from the utility grid. In addition, some utility companies offer time-of-use rates, which means the cost of power varies by the time of day and even the season it’s used in.

How Does A Grid-Tied System Work?

Solar panels, sometimes called solar modules or photovoltaic panels, convert sunlight into Direct Current (DC) electricity. However, our homes and most household appliances are wired for Alternative Current (AC), so the power from the photovoltaic panels must be converted from DC current to AC by an inverter or multiple microinverters. When the solar panels produce more electricity than the home consumes, the extra goes to the power grid, and you could get a credit on your bill. This is the case unless the system also has storage batteries.

Solar homeowners will still receive an electric bill, which is comprised mostly of two parts: transmission and distribution charges, and supply charged. Transmission and distribution charges are flat monthly fees that stay the same, regardless of how much electricity a home uses. Supply charges are assessed based on how many kilowatt hours of electricity you use. Although solar power can eliminate the supply charges, homeowners will still need to pay the monthly transmission and distribution fees for having an active electrical service.

How To Use Grid-Tied Solar During A Power Outage

There is a common misconception that having a solar system means a home will have power during blackouts. Your solar equipment is designed to shut down during outages to protect worker safety. If your solar energy system fed live voltage into the grid, it could harm utility workers trying to restore power.

However, if you have a solar battery bank, your solar power system can operate separately from the grid during blackouts. It will not feed power to the grid, and you can power your home from your solar batteries. Also, some homeowners have generators to produce backup power during outages, but these use fossil fuels, are expensive and produce no value when there isn’t a power outage.

Grid-Tied Solar With Battery Backup: Insurance Against Blackouts

Grid-tied solar systems with storage are sometimes called hybrid solar systems. When your solar panels are producing more power than the home is using, the surplus power can charge a battery.

In areas with time-of-use rates, customers pay more for power during peak times. For example, electricity costs are lower in the middle of the night and in the winter, when demand is usually lower. However, the rates are highest during the summer months in the late afternoon and early evening, when demand is much higher.

If you have a solar panel system with batteries, you can draw power from your battery when the rates are highest, increasing your energy bill savings. Also, you can power the most important loads in your home, such as the blower on a furnace, your refrigerator, Wi-Fi router and lights.

One downside to installing solar batteries is that they are expensive. Lithium-ion solar batteries can add thousands to the cost of installation, depending on their type and capacity. The federal solar tax credit and sometimes other solar incentives, like the Self-Generation Incentive Program in California, may help reduce the cost if you qualify.

Now, some developers are including solar and backup batteries into their master-planned communities, creating neighborhoods that function as virtual power plants. These neighborhoods produce their own electricity from the solar panels and have power from the batteries during grid outages.

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What About An Off-Grid Solar System?

Some homeowners are very interested in living in off-grid solar-powered homes. Although the concept of energy independence is appealing to many, it also has many downsides compared to a grid-tied solar system.

Off-grid solar homes require more solar panels to generate enough electricity to power the home and charge batteries for use overnight and during cloudy days. Likewise, off-grid solar homes require larger banks of batteries to store enough power. The other alternative is to have a backup generator, which increases reliance on fossil fuels, boosts expenses and can be noisy.

Adding extra solar panels, batteries and possibly a generator typically make off-grid systems more expensive than grid-tied homes with battery backup. The extra solar panels, batteries and generator also increase the environmental impact of manufacturing the system. One small advantage is that off-grid homes don’t have electric service, so you won’t need to pay the monthly transmission and distribution fee to the electric company, but this fee is usually pretty minimal.

It’s also important to consider that off-grid living often requires some lifestyle adjustments. For example, you may not be able to run multiple large loads at once, especially on cloudy days. People must be mindful of their energy use, which requires a lot of attention and planning. If you run out of stored power, you won’t even be able to keep the lights on or the refrigerator running.

Typically, off-grid homes are best for situations where it’s difficult to get electrical service from a utility company. In some rural areas, it can cost thousands or even tens of thousands of dollars to extend the power grid to the home. In such cases, it might be more economical to install an off-grid solar system.

Homeowners interested in a DIY project to install solar panels in an off-grid home should be aware this is a complex task, and some areas require these systems to be up to code. Therefore, unless a homeowner is quite handy and knowledgeable, it's better to hire a solar contractor.

What Does Battery Backup Cost For A Home Solar System?

Adding advanced lithium-ion solar storage batteries to a solar system significantly increases the total system cost. For example, a home storage battery like a Tesla Powerwall 2 adds around $8,500 to $10,000 in expenses plus the installation labor. After the installation costs, it can range from around $12,000 to $16,000 for one battery.

The average upfront cost of a 6-kilowatt solar system (without batteries) is nearly $16,620 before incentives. Therefore, a solar system with one battery could run $30,000 or more before incentives.

Although the design life of solar panels is around 25 years, solar batteries do not last as long, especially if they are used regularly. Therefore, you will likely need to replace the batteries after 10 or 15 years. Many solar storage batteries come with warranties that last about 10 years and guarantee a certain percentage of the original battery capacity for a designated amount of time.

The Bottom Line: Grid-Tied Solar Systems With Batteries Provide Resilient Energy

If you are connected to the power grid and want to start using solar energy, you will probably want to have a grid-tied solar system. This arrangement allows homeowners to use grid power when the sun isn’t shining. In areas with net metering, the utility company can credit you for the surplus solar electricity you supply to the grid. Adding solar batteries allows your home to have power 24/7, even during blackouts.

Interested in powering your home with renewable energy? Get started today!

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