Home Solar 101: Grid-Tied vs. Off-Grid Solar Systems

Written By The IPS Team

On September 23, 2020

At a Glance:

Now that you've decided to go solar, the next step will be determining which type of system is right for your home—grid-tied, off-grid, or some hybrid of the two. Different setups will work for different customers, so it's important to determine which components to include and your ultimate motivations for going solar.

Whether you are committed to adding solar to your home or just beginning to explore the idea, perhaps the earliest and most important choice to make in designing a solar power system is whether your system is grid-tied or off-grid.

Grid-tied solar power systems mean that your home is still connected to the local power grid. If your home’s electricity needs are beyond the production of your solar panels, then the power grid covers the difference. An off-grid solar power system is just that. There is no tie-in to the utility lines, so all of the power for your home must come from your panels, energy they’ve stored in batteries, or additional power generators.

There is also a middle ground between grid-tied and off-grid. This third option, called a hybrid system, has an energy storage component, like most off-grid systems, but maintains a connection to the power grid.

So, which is right for you?

Grid-tied systems are the least expensive and most popular option for homeowners who live in close proximity to the power grid. Off-grid systems have the added cost of batteries and/or gas generators, so these systems are most popular for remote locations where the cost of extending power lines becomes a key factor. Hybrid systems fall between these two in terms of cost and offer the most flexibility for homeowners wanting to get good returns on energy sent back to the grid.

That is the simple breakdown. Beyond cost and location, the choice to keep a grid connection or sever the grid cord depends on your own energy and environmental goals as well as some site-specific parameters. Below are in-depth explanations of each system setup to guide your choice.

electrical components of a grid-tied solar power system on the back of a home

Grid-Tied Solar Systems

The simplest of the three options, a grid-tied system, is the most popular choice for a reason. Grid-tied systems have the lowest upfront costs and are the easiest to integrate into your current way of living (electricity pun definitely intended).

Your local utility provides power whenever the solar panels cannot cover the energy load themselves, for instance at night or on cloudy days, so there is no requirement to also add batteries or a backup generator. Grid-tied systems can also be more flexible in terms of sizing. Homeowners can let their budget guide how many panels to install and not worry about meeting the entire home’s energy demand.

This flexibility is another reason grid-tied systems are usually cheaper. They can also be designed to allow for additional panels to be added in the future, for example if you’re anticipating a new electric vehicle in your future.

ground-mounted solar system

When the solar panels produce more energy than your home requires, often during the radiant afternoon sun, that extra energy can be sent back to the grid in exchange for electricity credits. These credits can then be used during periods when the panels are not producing.. This process is called net-metering, which is a key factor for grid-tied systems’ return on investment. Net-metering structures differ by utility and state, so it is important to check on your local electricity provider’s net-metering policy. Generally, the power your grid-tied system sends back to the grid is credited towards a deduction off of your monthly electric bill.

The cost-effectiveness of grid-tied solar systems does rely on close proximity to the power grid. Extending transmissions lines can get expensive, so off-grid solar systems are more typical for remote properties. Generally, if your home or business is more than 100 yards from the power grid, then off-grid options may be worth exploring.

Another consideration for grid-tied systems is that they will not provide power during an outage without additional equipment like an energy storage device, even if the sun is shining. This is to protect the utility workers who need the lines to be dead to safely complete their repairs. Shutting off grid-tied solar power systems during outages ensures there is no surprise solar electricity sent back through lines when they are being repaired.

Off-grid solar power system on roof of cabin in Montana

Off-Grid Systems

For those looking for complete independence from their power company, or with a home or business in a remote location, off-grid solar systems are the place to start. These systems are more complex and expensive than their grid-tied counterparts because it is highly recommended to include a battery storage system, backup generator, or both.

These are needed because there is no grid connection to provide power when the sun isn’t shining. A solar battery bank stores excess energy during the day and supplies power as needed, during the night or other high demand periods.

Off-grid solar installations do add thousands to upfront investment costs as additional equipment is required to successfully power your home 24/7. However, if your home is far enough from the power grid, then the investment in solar battery storage can be cheaper than the cost to extend the electric lines, particularly if it means crossing difficult terrain. There are also specific situations, such outlying buildings on a large property, that are best suited for off-grid solar while the main compound remains grid-tied.

Even if you live next to the grid, some energy-conscious clients prefer to generate all of their own power, local regulations permitting. Installing an off-grid solar power system also means never receiving another bill from the electric utility.

Off-grid clients also separate themselves from the environmental footprint of the local power company and the energy inefficiencies associated with distribution. Not worrying about raising electric rates or changing utility policies, especially potentially volatile net-metering changes, has some serious appeal.

As mentioned, the off-grid system will be pricier, as batteries and other associated components will be needed. The sizing requirements of the solar power system also become more rigid. The panel array needs to be large enough to meet the demands of your building, or additional generators should be considered. For this reason, off-grid systems work best for low electricity demand homes, like net-zero homes, or those willing to invest in energy efficiency retrofits.

Even when properly sized, off-grid solar clients should be prepared to handle brief periods without power. There can always be unexpected circumstances that drain through battery backups, and you have to wait for the sunshine to return to recharge. This restrictive lifestyle is also why investing in a backup gas generator is a popular addition to off-grid systems.

Blue Ion 2.0 Battery Backup as part of a hybrid solar power system.

Hybrid Solar Systems

When you combine elements of both grid-tied and off-grid systems, you get the hybrid option, also called grid-tied plus storage or solar+storage. Hybrid solar power systems include any that feature a storage component but are not meant to be entirely off-grid.

Hybrid systems are on the rise as solar battery technology continues to improve in efficiency and drop in price. Furthermore, innovative local incentives and programs have started popping up across the nation to encourage the addition of battery backups for added energy resiliency. The upfront cost of a hybrid system is cheaper than a fully off-grid system but more expensive than remaining grid-tied, so be sure to check with your installer for local rebates and other incentives.

Some hybrid systems use batteries purely in a backup capacity to provide power during outages. Other hybrid systems use battery storage to avoid purchasing electricity when it’s most expensive, called time-of-use rates. As “smart solar” technologies improve and utilities continue to adopt time-weighted rate structures, hybrid solar power systems are in the best position to maximize net-metering savings.

The additional battery storage costs mean that hybrid systems will not be cheaper than most grid-tied options. However, since the battery bank doesn’t have to be sized to meet all of the power needs of your home, it can be smaller, making the upfront investment more manageable than a fully off-grid system.

Be it grid-tied, off-grid, or hybrid, all system designs will give you significant solar benefits, like lowering your energy bill and diminishing your environmental footprint. Our IPS system professional will use your budget and energy goals to design the solar power system that is just right for you.

Reed Crossley

About Independent Power Systems

Independent Power Systems (IPS) has been designing and installing premium solar and energy storage systems for residential and commercial customers in Colorado, Massachusetts, and Montana since 1996. Our team of highly skilled engineers, electricians, and installers is committed to innovation in energy resilience and sustainability as well as helping the community achieve energy independence, do right by the environment, and save money in the process. To date, IPS has installed thousands of grid-tied, off-grid, remote wind, and microgrid systems including several challenging international projects for large commercial clients and the military.

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *