Three Types of Solar Inverters
Understanding the difference between Grid-Tied, Off-Grid, and Hybrid inverters is the first step to choosing the right system for your home.
What Does an Inverter Do?
Solar panels produce DC (Direct Current) electricity, but your home uses AC (Alternating Current). The inverter's main job is to convert DC to AC so your appliances can use the power.
Solar Panels
Produce DC
Inverter
DC to AC
Your Home
Uses AC
But inverters do more than just convert power. Depending on the type, they can also manage grid connections, charge batteries, and provide backup power during outages.
Grid-Tied Inverter
The simplest and most common type. It connects your solar panels directly to the utility grid.
Pros
- + Lowest cost option
- + Highest efficiency (95-98%)
- + Simple installation
- + Works with net metering
Cons
- - No backup power during outages
- - Cannot add batteries later
- - Depends on grid availability
Rick's Note
Grid-tied inverters must shut down during power outages. This is a safety feature called "anti-islanding" that protects utility workers from being shocked by your solar power. It's required by NEC 705.40.
Best For:
Homeowners who want to reduce their electric bill with solar but don't need backup power and have reliable grid access.
Off-Grid Inverter
Designed for complete independence from the utility grid. The inverter works with batteries to power your home 24/7.
Pros
- + Complete energy independence
- + No utility bills ever
- + Works in remote locations
- + Immune to grid outages
Cons
- - Highest upfront cost
- - Requires large battery bank
- - May need backup generator
- - More complex to size correctly
Important
Off-grid systems require careful planning. You must size your battery bank to handle multiple cloudy days, and your solar array must be large enough to fully recharge the batteries. Undersizing leads to dead batteries and no power.
Best For:
Remote cabins, rural properties without grid access, or homeowners who want complete independence from utilities.
Hybrid Inverter
The best of both worlds. A hybrid inverter connects to the grid AND manages battery storage, giving you backup power and energy flexibility.
Pros
- + Backup power during outages
- + Can do battery arbitrage
- + Works with or without grid
- + Future-proof (add batteries later)
- + Smart energy management
Cons
- - Higher cost than grid-tied
- - Requires compatible batteries
- - More complex installation
How Hybrid Inverters Enable Battery Arbitrage
Hybrid inverters can be programmed to:
- 1. Charge batteries from the grid during cheap/free hours (like overnight)
- 2. Discharge batteries to power your home during expensive peak hours
- 3. Keep a reserve for backup power if the grid goes down
This is the foundation of the Net Zero Secret strategy.
Best For:
Homeowners who want backup power, battery arbitrage capability, or plan to add batteries in the future. This is the most versatile option.
Quick Comparison
| Feature | Grid-Tied | Off-Grid | Hybrid |
|---|---|---|---|
| Grid Connection | Yes | No | Yes |
| Battery Support | No | Required | Optional |
| Backup Power | No | Yes | Yes |
| Battery Arbitrage | No | No | Yes |
| Relative Cost | $ | $$$ | $$ |
| Complexity | Simple | Complex | Moderate |
Rick's Recommendation
For most homeowners in 2024, I recommend a hybrid inverter even if you're not installing batteries right away. Here's why:
- Battery prices are dropping. You'll likely want to add storage within 5 years.
- Time-of-use rates are becoming common. Arbitrage opportunities are growing.
- Grid reliability is decreasing. Backup power is becoming a necessity, not a luxury.
The small extra cost of a hybrid inverter today saves you from replacing your entire system later.
Ready to Choose Your System?
Browse our battery directory to find compatible options for your inverter, or use our sizing calculator to determine what you need.