Solar systems explained - On-grid, Off-grid & Hybrid
Guide to Buying Solar > 2. On-Grid, Off-Grid and Hybrid Systems
The main components of a solar system
All solar power systems work on the same basic principles. Solar panels first convert solar energy or sunlight into DC power using what is known as the photovoltaic (PV) effect. The DC power can then be stored in a battery or converted into AC power by a solar inverter, which can be used to run home appliances. Depending on the type of system, excess solar energy can either be fed into the electricity grid for credits or stored in a variety of different battery storage systems.
Solar Panels
Modern solar panels, also known as solar modules, are built using many silicon-based photovoltaic cells (PV cells), which generate direct current (DC) electricity from sunlight. The PV cells are linked within the solar panel and connected to adjacent panels using cables. Note: Sunlight, not heat, produces electricity in solar cells. The amount of solar energy generated depends on several factors, including the orientation and tilt angle of the solar panels, the efficiency of the solar panel, plus any losses due to shading, dirt and even ambient temperature. There are hundreds of different solar panel manufacturers, so it is worth understanding how to choose the best solar panels.
Does solar work in cloudy weather?
Solar panels will still generate energy during cloudy and overcast weather, but the amount of energy depends on the 'thickness' and height of the clouds, which determines how much light can pass through. High clouds often enable a lot of light through, while low, thick storm clouds can almost block all sunlight. The amount of light energy is known as solar irradiation and can vary greatly depending on your location and time of year. More efficient panels will generally perform better in poor weather.
Solar Inverters
Solar panels generate DC electricity, which must be converted to alternating current (AC) electricity for use in our homes and businesses. This is the primary role of the solar inverter. In a ‘string’ inverter system, the solar panels are linked together in series, and the DC electricity is brought to the inverter, which converts the DC power to AC power. In a microinverter system, each panel has its own micro-inverter attached to the rear side of the panel. The panel still produces DC but is converted to AC on the roof and is fed straight to the electrical switchboard.
Learn more about the best solar inverters available based on performance, warranties and service.
There are also more advanced string inverter systems which use small power optimisers attached to back of each solar panel. Power optimisers are able to monitor and control each panel individually and ensure every panel is operating at maximum efficiency under all conditions.
Batteries
Batteries used for solar energy storage are available in two main types: lead-acid (AGM & Gel) and lithium-ion. Several other types are available, such as redox flow batteries and sodium-ion, but we will focus on the most common two. Most modern energy storage systems use rechargeable lithium-ion batteries and are available in many shapes and sizes, which can be configured in several ways explained in more detail here.
Some of the many solar battery systems available for on-grid, off-grid and hybrid systems.
Battery capacity is generally measured as either Amp hours (Ah) for lead-acid or kilowatt hours (kWh) for lithium-ion. However, not all of the capacity is available for use. Lithium-ion based batteries can typically supply up to 90% of their available capacity per day. In comparison, lead-acid batteries generally only supply 30% to 40% of their total capacity per day to increase battery life. Lead-acid batteries can be discharged fully, but this should only be done in emergency backup situations.
Off-grid solar systems require specialised off-grid inverters and battery systems large enough to store energy for 2 or more days. Hybrid grid-connected systems use lower-cost hybrid (battery) inverters and only require a battery large enough to supply energy for 5 to 10 hours (overnight), depending on the application. Learn more about batteries in our complete solar battery review.
Electricity Switchboard
In a standard grid-tie solar system, AC electricity from the solar inverter is sent to the switchboard, which is used to power your home's various circuits and appliances. This is known as Net metering, where any excess electricity generated by the solar system is sent to the electricity grid through an energy meter or stored in a battery storage system if you have a hybrid system. Some countries, however, use ‘Gross metering’ where all solar energy is exported to the electricity grid.
Hybrid systems can both export excess electricity and store excess energy in a battery. Some Hybrid inverters may also be connected to a dedicated backup switchboard, enabling some ‘essential circuits’ or critical loads to be powered during a grid outage or blackout.
The three main types of solar power systems
1. On-grid system - also known as a grid-tie or grid-feed solar system
2. Off-grid system - also known as a stand-alone power system (SAPS)
3. Hybrid system - grid-connected solar system with battery storage
1. On-Grid System
On-grid or grid-connected solar systems are the most common system used by homes and businesses. These systems use either solar inverters or microinverters and are connected to the public electricity grid. Depending on the type of metering used, the solar power you generate is typically used to power your home. Any excess solar power you generate is exported to the electricity grid, and you usually get paid a feed-in-tariff (FiT) or credits for the energy you export to the grid.
Unlike most hybrid or battery systems, on-grid solar systems cannot function or generate electricity during a blackout for safety reasons. Since blackouts usually occur when the electricity grid is damaged. If the solar inverter were still feeding electricity into a damaged grid, it would risk the safety of the people repairing the fault/s in the network. Most hybrid solar systems with battery storage can automatically isolate from the grid (known as islanding) and continue to supply some power during a blackout.
Batteries can be added to on-grid systems at a later stage if required. The Tesla Powerwall 2 is a popular AC battery system that can be added to almost any existing solar system.
What happens after electricity reaches the switchboard?
The meter. Excess solar energy runs through the meter, which calculates how much power you are either exporting or importing (purchasing).
Metering systems work differently in many states and countries around the world. In the following scenario, I’m assuming the meter only measures the electricity being exported to the grid, as is the case across most of Australia. In some states, meters measure all solar electricity produced by your system, and therefore, your electricity will run through your meter before reaching the switchboard, not after it. The US has several different metering systems depending on your state. In California, the metering rules were recently changed to a new Net metering system called the Net Billing Tariff (NBT). This new system, introduced in April 2023, measures the net exported solar energy, and the consumer is credited for the electricity exported.
The electricity grid. Electricity sent to the grid from your solar system is used by other consumers on the grid, such as your neighbours. When your solar system is not operating, or you’re using more electricity than your system produces, you will start importing or consuming electricity from the grid.
2. Off-Grid System
An off-grid system is not connected to the electricity grid and, therefore, requires battery storage. Off-grid solar systems must be designed appropriately to generate enough power throughout the year and have enough battery capacity to meet the home’s requirements, even in the depths of winter when there is generally much less sunlight.
The high cost of batteries and off-grid inverters means off-grid systems are much more expensive than on-grid systems, and so are usually only needed in more remote areas that are far from the electricity grid. However, battery costs are dropping, so there is a growing market for off-grid solar battery systems, even in cities and towns. Read more about choosing the best off-grid solar system here.
AC-coupled off-grid solar systems use a solar inverter together with a multi-mode battery inverter.
There are different types of off-grid systems which we will go into more detail later, but for now I will keep it simple. The above diagram is for a larger AC-coupled system. In smaller-scale DC-coupled systems, a solar charge controller is used to manage the battery charging, and the DC power is converted to AC using an off-grid inverter and sent to your home appliances.
The battery bank. In an off-grid system, there is no public electricity grid. Solar power is first used by your appliances (loads), and then any excess power is sent to your battery bank. Once the battery is full, the system automatically ramps down the solar power. When your solar system is not working, such as at night, your appliances draw power from the batteries.
Backup Generator. For times of the year when the batteries are low, and the weather is very cloudy for several days, you will generally need a backup power source, such as a backup generator. The size of the generator (measured in kVA) should be adequate to supply your house and charge the batteries at the same time.
3. Hybrid System
Modern hybrid systems combine solar and battery storage in one and are now available in many different forms and configurations. Due to the decreasing cost of battery storage, systems already connected to the electricity grid can start taking advantage of battery storage. This means being able to store solar energy that is generated during the day and using it at night. When the stored energy is depleted, the grid is a backup, allowing consumers the best of both worlds. Many hybrid systems can also charge the batteries using cheap off-peak electricity (usually from midnight to 6am).
There are also different ways to design hybrid systems, but we will keep it simple for now. To learn more about the different hybrid and off-grid power systems, refer to our detailed guide to home solar battery systems.
The battery bank. In a hybrid system, once the solar power is used by your home appliances, any excess power will be sent to the battery bank. Once the battery bank is fully charged, it will stop receiving power from the solar system and any excess solar is exported to the electricity grid. The energy from the battery can then be discharged and used to power your home, usually during the peak evening period when the cost of electricity is typically at its highest.
The meter and electricity grid. Depending on how your hybrid system is set up and whether your utility allows it, once your batteries are fully charged, excess solar power not required by your appliances can be exported to the grid via your meter. When your solar system is not in use, and if you have drained the usable power in your batteries, your appliances will start drawing power from the grid.
Solar Power Vs Solar Energy
( kW vs KWh )
If you are confused about watts, kW, kWh, what they mean, and when to use them, check out our post in the forum Solar Power vs Solar Energy. It will help to clarify all of this. The solar forum is a great place to ask about how solar works.
