Grid-tied solar systems explained
Individual panel prices
Prices of DIY kits
Installed system prices
Grid-tied systems are solar power setups that are connected to the electricity grid — and work without any battery backup equipment.
They are currently the most common type of solar panel system in American homes. And despite growing interest in battery technologies, most homeowners going solar today still opt for installing a grid-tied set up on their roofs.
So how do grid-tied solar systems work, and why are they so popular? More importantly, are they the right kind of system for you? This blog will take an in-depth look at this system type and help you answer those questions.
A quick note: this type of solar panel system is known by many names, such as ‘on-grid,’ ‘grid-connect(ed),’ ‘grid-intertied’ and ‘grid-direct.’ They all refer to the same thing.
A grid-tied system uses solar panels to generate electricity from sunlight.
Excess power is exported to the utility grid when the household requires more power, those needs are met by imports from the grid.
The solar panels are installed at a location with suitable sun exposure – typically on the roof, but other sites like your backyard can also work – and require wiring to transport electricity between the solar equipment, the home, and the power grid.
Here’s how grid-tied systems are different from other solar panel setups:
The average cost of a typical grid-tied solar system is between $12,600 and $14,000 net of the federal solar tax credit. Most systems cost between $2.75 and $3.35, with a national average price of around $3.00 per watt as of 2023.
However, solar system costs can vary a lot based on many factors, such as system size, the state you live in, the brand of solar panels you choose, and even the pitch of your roof.
In the table below, we take a look at how the average price of grid-tied solar panels varies by system size.
|System size||Average system cost*|
*Average cost after deducting the federal solar tax credit incentive as of 2023
To see a live price for a solar panel system customized for your home, I recommend you use our advanced solar calculator. It’ll tell you everything you need to know about installing solar panels in your home. You can start by entering your details below.
In most households, energy usage during the day is relatively low as members tend to be out of the house. This is also when solar panel production is at its peak, so power generation far exceeds energy use.
With grid-tied systems, this excess power is exported to the utility, which earns electric bill credits for the homeowner.
It also means that the house doesn’t run out of power. When the solar panels aren’t producing enough electricity, the system can import the shortfall from the grid.
A grid-tied system’s two-way relationship with the grid offers homeowners a major benefit: they can use it to take advantage of net metering.
Where available, net metering lets homeowners earn bill credits for every watt of excess solar energy they send back to the grid. These payments allow the homeowner to dramatically reduce, or even eliminate, their utility usage charges.
The two-minute video below demonstrates how a grid-tied solar system works for a typical family home.
The direction of energy transfers between the home and the grid isn’t just affected by the time of day — it’s also impacted by the seasons.
Let’s take a look at how this plays out for a typical home throughout the year:
In summer, when the days are long and sunshine plentiful, homes with on-grid systems export more power than they import. Most utilities allow homeowners to save up these credits for use later in the year.
Mild weather means moderate power usage, as homes are less likely to require heating or cooling. At this time of year, grid-tied solar systems also produce reasonable amounts of power, so electricity imports and exports tend to be in balance.
Winter has the shortest days and weakest sunlight, and thus, the lowest solar output. Power usage is also usually quite high at this time, due to high heating usage. Your system will usually import more power over this period than it exports.
A home with grid-tied solar panels will generate lots of excess solar power during the summer. The homeowner can then carry these credits over and use them during the winter when their grid imports are higher than solar power exports.
In other words, the high solar generation (and exports) over the summer serve to cancel out the relatively high imports of the winter. In fact, with a properly designed system, a home with grid-tied solar panels can even end up with zero net electricity usage charges for the year.
Grid-tied systems are the easiest solar systems to install. They require the least amount of equipment, as there is no onsite storage equipment or wiring to deal with.
Here are all the components you need for a grid-tied solar system installation:
Here’s a quick rundown of the advantages of grid-tied solar panels when compared to other types of solar panel systems:
There's really only one disadvantage of a grid-connected system:
We explore the issue of using solar as a source of backup power in this blog.
Besides grid-tied systems, there are two types of solar power systems used in homes:
The addition of a battery system may not sound like much, but it makes hybrid solar systems function differently — and cost a lot more — than grid-tied solar systems.
Learn more: What is a hybrid solar system?
This is a solar energy system that operates completely independently of the grid. Such setups require careful energy management by the household, and they tend to have very high upfront costs.
Learn more: Off-grid solar systems - An introductory guide
The biggest advantage of grid-tied solar systems is that they are much cheaper than other types of solar systems.
Their lower upfront cost means higher monthly savings, a higher return on investment (ROI), and the shortest payback period.
If you’re curious to see how much a grid-tied solar system would cost for your home — and how much money it can save you — enter your details into the calculator below to receive a custom solar estimate.