Key Points 

  • Grid-tied solar systems have been the most popular renewable energy setup in America for almost a decade. 
  • They allow you to export excess energy to the utility grid in exchange for bill or energy credits. 
  • They are cost-effective and less prone to failure compared to other solar systems. 
  • Their main disadvantage is their inability to provide power when the grid is down. 
  • For most homes, grid-tied systems are the best choice. 

What is a grid tie inverter? 

You may have heard them called a lot of different things: on-grid, grid-connected, grid-direct or grid-intertied. 

Whatever you call them, a fundamental level, grid-tied systems are solar power setups that are connected to your local utility grid. 

They work without any battery backup equipment, meaning that you are in the dark during outages. 

At the moment, they are by far the most common type of solar system in American homes. 

Even with the constant innovation around battery technology, countless Americans still opt for grid-tied systems because of their low cost, robust reliability, and simple setup. 

How does a grid tie inverter work?

A grid-tied solar inverter uses your home’s solar panels to generate electricity from sunlight. 

It converts the constantly varying DC solar power and feeds it into the grid. It synchronizes the frequency and the output voltage to its connected grid.

When solar energy increases, the inverter output increases too, injecting into the grid. Since some electricity companies pay for the extra power, you can get monthly checks or municipal subsidies.

Any excess electricity that is not being used by your home is exported to the utility. 

When your system can’t meet the needs of your home, a grid inverter will import electricity from the grid. 

How are grid-tied solar systems similar to other systems? 

  • Power generation: All PV solar power systems will generate power by using solar panels to convert sunlight into DC energy. From there, it’s changed into usable AC electricity via an inverter. 
  • Panels installed onsite: Regardless of the setup that you have, you’ll need solar panels installed in a location that has a suitable amount of sun exposure. For most homeowners, this is via a roof or ground mount system. You’ll also need the necessary wiring to transport electricity from your solar panels, to your home, and if connected, the power grid. 

How grid-tied systems are different from other systems 

  • They use grid-tie inverters: Grid-tied solar inverters are specialized tools that can effectively communicate with the utility grid. It enables homeowners to export power to the utility and to import it when needed. 
  • No battery storage: Thanks to their simplistic setup, grid-tied inverters don’t include any form of energy storage to store your captured solar energy. This results in them being simple to install and much more cost-effective when compared to other setups. 

Tip: Working with a solar broker

Selecting the right type of solar inverter for your home can be overwhelming, and picking the wrong one is an expensive mistake. If you don’t know what you are looking for, you can sink tens of thousands of dollars into a project that won’t be profitable for several decades. Having someone on your side can save you the headaches and stress of navigating a solar energy purchase on your own. That’s why many solar buyers turn to Spark Change for trusted advice. 

While grid-tie inverters are legal in most states, plug-and-play grid-tie inverters are typically not. 

It sounds promising: buy a relatively inexpensive unit, plug it into your home, and start selling electricity back to the grid. 

In theory, this would do wonders by giving the average person access to solar energy. 

For most homeowners, the process would look something like this: 

  • Step 1: Sign an interconnection agreement with your utility company 
  • Step 2: Install a certified inverter from your utility company 
  • Step 3: Install a disconnect switch (AC, accessible, lockable) near the meter 

Your electric company has a few valid reasons to want to limit the use of plugin grid tie inverters, most of which concern the safety of their staff. 

Without the proper precautions, your solar system would continue feeding electricity into what should be a dead power line, potentially frying any workers doing maintenance. 

Before you decide to invest in a plugin grid-tied inverter, call your local utility company, or reach out to our experts at SparkChange for a consultation. 

Can a grid tie inverter be used off-grid?

It is possible to use a grid-tie inverter in an off-grid setup, but you will need some sort of auxiliary power source like a diesel generator. 

Grid-tied inverters require your power source to generate electricity in perfect synchronization with the utility, or auxiliary power source. If you decide to pursue an off-grid setup, it helps to keep the following things in mind. 

  • Your generator must be sizable enough to handle your entire home’s load, allowing you to run the setup when solar is not available. 
  • There is a delay from when a solar setup is turned on to when electricity is created, meaning that your generator must handle a 100% load for about 60 seconds. 
  • Your generator and solar setup must be completely isolated from the grid. 
  • If you want to use more than one generator in your solar setup, you’ll need a synchronization device for it to work properly. 

Grid-tie inverters: pros and cons


  • Cheapest type of solar panel system/lowest cost: Being one of the only systems that doesn’t require a battery, grid-tied systems are notably more cost-effective compared to other systems. Fewer components in the system result in reduced labor and capital costs during installation. 
  • Quickest payback: Combining a cost-effective setup with the ability to sell surplus power to the grid results in a lightning-fast ROI. In most states, the payback period for grid-tied systems is between 3 and 9 years. 
  • High savings thanks to net metering: Grid-tied systems can use net metering to sell any surplus power back to the grid at a retail rate. This will cut your monthly energy bills and help the system recoup its cost astonishingly fast. 
  • 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.


  • No power during grid outages: The only real con of a grid-tied system is that they do not have any backup power. Thanks to their connection to the grid, you will not have power even during daylight power outages. Grid tied systems will turn off when the grid goes down, to protect workers who are doing maintenance on any damaged utility lines. 

How do grid inverters work at different points in the year? 

Ultimately, a home with grid-tied solar panels will generate most of its excess power during the summer. 

A savvy homeowner can then use the credits generated in the warm season to pay for their utility bill in the winter when grid imports are significantly higher. 

With a properly designed system, a home with a grid-tied system can even finish the year with zero net electricity usage charges, which is pretty amazing. 

How much does a grid-tied solar system cost?

In the United States, the cost of a typical grid-tied system is between $17,600 and $57,400. This is the net investment after application of the federal solar tax credit. 

The vast majority of solar systems will cost between $2.92 per watt and $3.67 per watt. 

At the time of writing, the national average is a price of $3.24 per watt. 

Costs will vary on a few factors, such as: 

  • Your system’s size 
  • The state that you live in 
  • Solar panel brand 
  • Pitch of your roof 
  • Amount of shade on your property 

What equipment will I need for my grid-tied system? 

One of the biggest advantages of a grid-tied system is its relatively simple setup. They require the least amount of equipment, and there aren’t any on-site storage considerations either. 

Solar Panels

Arguably the most critical component of the system, your panels harvest DC electricity from sunlight. A 6kW system would require approximately 20 individual panels mounted on your roof. 

Racking and Mounting 

This refers to the equipment that you’ll need to fix your solar panels in place on your roof or your ground mount. It also includes everything you need to properly ventilate your panels, keeping them operational for years to come. 


More obviously, wiring transports the electricity generated from your solar panels to your inverter, and then to your home and net meter. 

Solar grid-tie Inverter

This is where the magic happens. Your inverter converts your panel’s collected direct current (DC) power into usable alternating current (AC) power that can be used by your home or exported to the grid. 

Net Meter

This device is the intermediary between your solar system and the grid, and monitors the exchange of electricity between both systems. If you don’t already have one in your home, your utility company will provide one so your grid-tied system can get up and running. 

Is a grid tie-inverter worth it? Should I invest in one? 

This comes down to two big factors: do you want a cost-effective system, or would you prefer to have a system with a battery backup to protect you from grid outages? The best way to see your options is by scheduling a solar consultation with one of our friendly customer success representatives.

When it comes down to it, the biggest advantage of a grid-tied system is that it is much cheaper than any other type of solar system.

With a significantly lower up-front cost, you’ll reap the rewards of higher monthly savings, a short payback period, and a high return on your investment. 

If you are looking for a battery to protect you and your family from outages with the capacity to sell excess energy to the grid, take a look at our article about hybrid inverters.