Grid-tied is also referred to as grid interactive or utility interconnected. What this means basically is that if your utility allows it, your system would be connected through your meter to the electric grid. Most electricity meters accurately record in both directions, allowing a no-cost method of effectively banking excess electricity production for future credit. In the U.S.A., as part of the Energy Policy Act of 2005, all public electric utilities are now required to make available upon request net metering to their customers.
If you are producing more power than you are using, the electric meter will spin backwards which means you are producing excess electricity which is then being fed back into the grid. There are two basic types of grid tied solar systems, grid tied and grid tied with battery backup.
A grid-tied system is made up of solar panels, a grid tie inverter, and other electrical components. This is the least expensive and most logical choice if you live in an area which is serviced by the utilities. Since the power is not stored in batteries, as in an off grid solar system, there are no batteries to replace. However, this type of system provides no back-up power in case of power failure.
Grid-tied with battery backup is a type of solar system which is roughly the same as the grid tied system with a couple of additions. Along with the inverter and solar panels you would need 12 volt deep cycle batteries and a solar charge controller. With the addition of the batteries comes more expense and maintenance. A solar charge controller is used to maintain the proper charge to the batteries so that overcharging will not occur. Although this system is more expensive than a grid-tied solar system, it will provide you with at least some power in the event of a power failure.
Off-grid solar systems are completely independent of the utility grid. An off grid solar system is most often used in areas where electricity is not readily available. It is basically the same configuration as the grid tied solar system but a different type of inverter is used. In an off-grid system you would not use a grid-tie inverter but an off grid inverter. These inverters are designed for a specific purpose so it is very important that you get the right one. An off grid solar system will consist of the solar panels, off grid inverter, batteries and electrical components.
It is important to note that solar energy prices have been declining over the past few years. This is good news to those who have always wanted a solar system for their home or place of business but could not justify the cost. To sweeten the deal and encourage the use of renewable energy, there are also energy credits, federal incentives as well as state and local incentives that make solar not just affordable, but a bargain as utility costs continue to rise.