This page may contain affiliate links, please check out our disclosure policy here.
- Differences between on-grid and off-grid solar systems
- How does grid tie solar work?
- Grid tie solar system sizing (on-grid)
- How much power do solar panels produce?
- Advantages of grid connected solar PV system
- How many solar panels do I need for off grid?
- How many batteries for off grid solar?
- Other questions – grid-tied & off-grid solar power systems:
Differences between on-grid and off-grid solar systems
Out of the three main systems for generating home electricity; solar, wind and hydro, solar is by far the most common and easily accessible.
The two main types of solar PV power systems are roof-mounted, on-grid (also known as ‘grid-tie’) and off-grid. In this post I explain what the terms mean and what the difference is between off-grid and grid-tie solar panel systems.
The term ‘grid’ refers to the electrical or utility grid feeding domestic and commercial buildings. An on-grid solar system is directly connected to the electrical grid through an inverter and metering equipment. It cannot supply power at night. An off-grid system does not connect to the grid and charges batteries for night-time use.
Video – Grid tie (on grid) and off grid solar systems explained
How does grid tie solar work?
The diagram below gives a clear idea of what is needed to build a grid tie solar power system and how it all fits together.
Both off grid and on grid have common elements, but the essential equipment here is Net Metering. This device ensures that the flow of current is monitored and measured as it moves in or out of the grid.
Components of on grid solar system
The system needs a suitably sized inverter to convert DC from solar panels into AC for home appliances and various accessories, such as circuit breakers and junction boxes.
Once installed, operation is seamless and automatic. When the solar system generates more than the household needs, electricity flows into the grid and the homeowner receives a credit.
If the home load is higher than the solar output, such as at night-time, then power is pulled from the grid and Net Metering records all transactions.
How much does a grid tie solar system cost?
To some extend this depends on the geographic location and the amount of the sun’s energy available measured in peak-sun-hours. This can vary widely and affects the amount of power that the solar panel array can generate.
The table below illustrates the solar system size required to run a home using the average energy consumption for a home in 10 states.
The peak-sun-hours for each state is also shown and the average cost per installed kW:
Solar required for 100% energy used (kW)
Installation price Per Watt ($) 2021
Grid tie solar system sizing (on-grid)
Professional solar installers estimate solar system panel sizes using a value for the sun’s energy in any geographic location. It’s called irradiance.
The image below shows the historical irradiance in Chicago, Il, which happens to be close to the US average, or 4 kWh/m2/day. This is also known as peak-sun-hours and is used to calculate how much energy a solar system can generate.
For example, a 5kW solar system in theory should be able to generate:
5000 solar watts rating x 4 peak-sun-hours = 20kWh/day
Note: This is not enough to power the average US home at 30kWh/day.
Unfortunately, the above calculation doesn’t take into account solar PV system losses – all systems have losses, which means that the actual output would be much less.
Infographic – Solar PV losses explained
How much power do solar panels produce?
When taking the PV losses into account, we need to increase the amount of solar watts by 1.44 to make sure that the solar panels generate enough power for the designed load.
The table below shows how much energy various solar panel power ratings will generate, but doesn’t take into account the losses found in a real-life working system:
Solar Panels (Wp)
kWh per day
kWh per month
kWh per year
Advantages of grid connected solar PV system
On grid, or grid-tied, solar systems have definite advantages, automatically adjusting to the home’s needs and backed-up by the utility grid – it basically a huge AC power reservoir!
Another advantage is that batteries aren’t needed, which are very expensive.
Perhaps the biggest advantages are the financial incentives put in place to encourage homeowners to install solar.
Federal solar tax credit
The Federal Solar Credit scheme has been further extended and held at 26% until the end of 2022. Projects started in 2023 will be eligible for a reduced Tax Credit of 22%. There will be no Tax Credit after 2023 (except for commercial installations – 10%.)
It acts as a dollar-for-dollar reduction in your income taxes, so you’ll be reimbursed after filing your annual tax return. See the example below:
- Cost of solar system = $13700 – 26% Federal Solar Tax Credit = $10138
Solar buy back rates
Some utility companies in some states operate solar buyback programs. This is when the company pays the homeowner for electricity generated and injected back into the grid.
The rate of payment varies and many programs will be coming to an end in the not-too-distant future. Other solar incentives include cash incentives to encourage home solar installations.
How many solar panels do I need for off grid?
Basic solar panel sizing uses the same process for off grid or on grid solar systems. The process is driven by the load i.e. how much energy does your home consume per day?
Home energy consumption can be found from last year’s utility bill and it’s the average daily value we’re looking for. The average US home consumes about 30kWh per day.
With an irradiance value of 4kWh/day or peak-sun-hours, the amount of solar power required is:
30kWh / 4 = 7600 watt-hours solar power.
If using 200 watt solar panels, it would take 7600 watts / 200 = 38 solar panels.
However, a solar power system has losses, so it will generally produce much less than the calculation indicates.
Losses can be up to 23% of the solar system rating. For a 7600 watt system, the rating needs to be multipled by 1.44 to make up for the possible losses.
Realistic power rating needed = 7600 x 1.44 = 10800 watts, or 36 solar panels.
Off-grid solar systems need to have enough solar capacity to charge up a battery bank , as well as run the home in the daytime.
I would normally allow up to 30% of the total daily energy consumption for night-time running.
Although this would mean installing 30% more solar, or 48 panels in total, it’s better to have too much power capacity than not enough when you’re off-grid.
How many batteries for off grid solar?
The table below shows how to work out how many batteries you might need to have one day autonomy for a home using 28kWh of energy per day:
Battery Backup For 24 Hours
Total load for 24 hours backup
Battery bank voltage
Battery amp-hour rating
Required Batteries (60% DOD) Lead-Acid
583/0.6 = 972 (say 1000)
Number of batteries @250Ah each
Other questions – grid-tied & off-grid solar power systems:
What is a on-grid solar system?
The term ‘grid’ refers to the utility grid, so called because the power lines criss-cross the countryside. An on-grid solar system connects directly to this grid.
When the solar system generates more power than is needed by the home it automatically feeds into the grid and the home-owner earns credits for future consumption.
If more power is required than can be generated by the solar system, then power is taken from the grid. The flow of power both ways is controlled, measured and monitored by net-metering equipment.
How does off-grid solar system work?
An off-grid solar system works a little differently from a grid-connected solar power system.
Solar panels cannot generate electricity at night and also suffer from reduced output in very shady or cloudy conditions. This means they cannot power the home at night when the sun stops shining.
With no grid connection, the only solution is to store solar energy produced in the day in batteries as a form of energy storage.
A battery bank of sufficient size can feed the house through the night using an inverter to change the DC electricity into the AC power home appliances need.
Which solar power system is more expensive off-grid or on-grid?
Solar panels sizing calculations are the same for off-grid and on-grid solar systems, but off-grid solar systems are much more expensive for a couple of reasons.
First, a substantial battery bank is required to feed the home during the night. For the average home with a load of 30kWh/day this would be in the region of $5000 to $10000 for an autonomy of 24 to 48 hours, depending on the load during the night.
Secondly, in addition to the solar panel output required to feed the normal home consumption, extra watts are needed to charge up the batteries ready for the night, or for cloudy days.
I would increase the number of solar panels for an off-grid solar system by about 30%, as most of a home’s consumption is during the day.
The table below gives a comparison of grid-tie solar system outputs and installation costs by US State:
Ave kWh used per day
Solar required for 100% energy used (kW)
Installation price Per Watt ($) 2021
How many solar panels does it take to run a house off grid?
The average US home consumes about 900kWh of electricity per month, which equates to about 30kWh per day. Using an average irradiance value of 4 peak-sun-hours the amount of solar power needed would be:
30kWh / 4 peak-sun-hours = 7.6kW solar panel power.
If using 300 watt solar panels, you would need 7600 watts / 300 = 25 solar panels.
However, that is theory. A solar system has inherent losses that generally amount to about 23% of the system rating. In the case of a 7.5kW system, the power rating should be multipled by 1.44 to compensate for the PV losses.
Adjusted power rating required = 7.5 x 1.44 = 10.8kW, or 36 solar panels.
In addition, extra solar would be required to charge up a battery bank to run the home through the night. Normally, most of the energy consumed is in the day, so I would allow 30% of the total daily consumption for night-time running.
For complete autonomy in all circumstances, I would install 30% more solar, or 48 panels in total. Better too many than too few!