One of the first decisions in a solar proposal is the system type: grid-tied (on-grid), off-grid, or a hybrid that combines features of both. Customers often don't know the difference and arrive with questions like "will my house have power during an outage?" or "can it work without batteries?". This article summarises how the three system types work, how they differ in cost and design, and which one suits which customer.
Grid-tied (on-grid) systems
The panels connect to the building's electrical installation through a grid-tied inverter. Energy produced is used in the building first; any surplus is exported to the grid, and any shortfall is drawn from the grid. There is no battery.
- Advantage: with no battery cost, it is the lowest-cost option per installed kilowatt, and maintenance needs are low.
- Limitation: when the grid goes down, the inverter stops producing for safety reasons. A standard on-grid system therefore does not supply the building during an outage.
- Best for: homes, businesses and industrial sites with a reliable grid, where the main goal is lower bills.
How exported energy is credited has a direct effect on savings. We cover this in our self-consumption and net metering article.
Off-grid systems
There is no grid connection. Energy produced during the day is both used and stored in a battery bank; at night and on cloudy days, demand is met from the batteries.
- Advantage: provides electricity where there is no grid, or where connecting to it would be very expensive.
- Limitation: the system must be sized for the worst month and the lowest-production days. The battery bank is a large share of the cost and needs replacing at intervals.
- Best for: cabins and holiday homes, construction sites, telecom sites, farms and other remote locations.
Off-grid design depends on the appliance list, which loads run at the same time, the start-up current of motor loads and how many days the batteries must carry the load (autonomy). The step-by-step calculation is in our off-grid sizing article.
Hybrid systems
A hybrid system is connected to the grid but also has batteries. A hybrid inverter manages energy flows between solar, battery and grid: surplus daytime production charges the battery, evening demand is met from the battery first, and during an outage selected loads continue to run from the battery.
- Advantage: provides backup power during outages and can raise self-consumption by shifting daytime production into the evening.
- Limitation: batteries and a hybrid inverter make it more expensive than an on-grid system. Which loads are supplied during an outage depends on the inverter's backup output power and the backup panel set aside in the installation.
- Best for: areas with frequent outages, businesses where outages cost money (cold storage, healthcare, telecoms), and homes with high evening consumption.
Comparison table
| On-grid | Off-grid | Hybrid | |
|---|---|---|---|
| Grid connection | Yes | No | Yes |
| Battery | No | Required | Yes |
| Power during outages | No | Yes (as long as the battery lasts) | Yes, for selected loads |
| Sizing driver | Annual consumption and roof area | Worst month, days of autonomy | Consumption + loads to back up |
| Relative cost | Lowest | High | Medium to high |
Choosing batteries: gel or lithium?
In off-grid and hybrid systems the battery type affects both the upfront investment and the service life. Gel batteries cost less upfront, but to protect their life they are usually recommended for shallower discharge, which means a larger bank for the same usable energy. Lithium (LFP) batteries cost more but allow deeper discharge and more cycles, and take up less space. Compare options using the depth of discharge and cycle life values on the manufacturer's datasheet.
What to watch in the proposal
- Ask what the customer really wants: lower bills, power during outages, or electricity where there is no grid?
- In a hybrid proposal, state clearly which appliances will run during an outage. A vague promise like "the house keeps running" leads to disputes later.
- In an off-grid proposal, state the days of autonomy and which month the system was sized for.
- Include battery replacement cost in the payback calculation, as explained in our payback period article.
System types in PVAGE
In PVAGE's production and financial analysis a system can be set up as on-grid (net-metered), off-grid or hybrid, and the inverter catalogue in roof design is filtered as on-grid, off-grid and hybrid. The off-grid module includes an appliance library, night-time usage, simultaneity and start-up current analysis, days of autonomy, gel or lithium batteries, inverter selection, recommended fuse and cable cross-section, an MPPT check that accounts for cold-weather open-circuit voltage, battery bank sizing and a wiring diagram. Each of these system types can also be selected in the proposal. See the off-grid system design page for details.
Explore the feature: Off-Grid Solar Calculator and Battery Sizing