What is on-grid solar system? How it works, its components, inverters, and battery storage

2.1 Operating mechanism

An on-grid system operates through a tightly coordinated sequence of steps, from the moment sunlight is absorbed to the moment the electricity is actually used:

1. First, the solar panels absorb sunlight and generate direct current (DC): This happens continuously throughout daylight hours, whether the panels are mounted on a roof or on the ground, as long as the installation angle captures sunlight efficiently throughout the day.
2. Converting DC to AC: since most household and business appliances run on alternating current (AC), the DC output from the panels must pass through the grid-tie inverter to be converted into AC that matches the grid's voltage, frequency, and phase — this is also the step that allows the power to feed into the grid and remain compatible with any standard equipment on-site.
3. Powering appliances: once converted to AC, the electricity is used first to directly power on-site loads — lighting, air conditioning, production equipment, and so on — directly reducing the amount of electricity that needs to be purchased from the grid.
4. Any surplus power left after on-site demand is met is not wasted; it is exported to the public grid and recorded through net metering, which offsets the electricity bill or is converted into an energy credit. Conversely, when solar output is low, the system automatically draws the shortfall from the grid — keeping the power supply continuous without any manual intervention.

💡Are you interested in rooftop solar - Take a look at: Rooftop solar power - Components, Types, and Technical considerations

2.2 Operating scenarios of an on-grid solar system

An on-grid system automatically switches between four main scenarios, depending on the balance between solar output and consumption demand at any given moment:

1. When solar output exceeds demand: after on-site loads are fully covered, the surplus power is exported to the national grid. This is recorded and offset through net metering — the meter effectively runs backward to log the exported power, which is credited against the electricity bill or compensated according to the local utility's policy at the time.
2. When solar output is lower than demand: all power from the solar system is used first; the shortfall is automatically and instantly supplemented from the grid, without any disruption to running equipment.
3. When the grid goes down (outage or planned shutdown): once the grid is lost, the solar system stops operating. This is known as anti-islanding: the inverter continuously tracks the grid's phase and frequency signal through a phase-locked loop; when the grid disappears, the reference signal is lost, causing the inverter to detect the phase mismatch and disconnect within a few electrical cycles. This exists to ensure electrical safety and prevent equipment damage from unsynchronized power. As a result, a standard on-grid system (without battery storage) cannot supply power during a grid outage, even on a bright sunny day.
4. At night or when there isn't enough sunlight: with no sunlight to generate power, all loads are supplied from the grid as usual.

The inverter is considered the "brain" of a solar power system: beyond converting DC to AC, modern inverters also monitor the system and provide grid services such as reactive power adjustment and response to grid frequency fluctuations; for systems with battery storage, they can also operate independently during an outage if designed to do so.

Choosing the right type of grid-tie inverter depends on system size, power consumption, and actual installation conditions (whether the roof is shaded, available roof area, and whether battery storage is planned for the future). There are three main types of inverters commonly used in on-grid systems:

💡Learn more about the role of inverters—Understand the differences between grid-tied, off-grid, and hybrid inverters

5.1 Feed-in (non-zero-export) on-grid system

This is a solar system without battery storage, where all surplus power is exported straight to the grid. It's the lowest-cost type of on-grid system, but it loses power entirely during a grid outage.

This is the most common type of on-grid system: solar power is used for on-site loads first; any surplus is exported ("fed back") to the national grid through a bidirectional meter and recorded via net metering; when output falls short, the system automatically draws the difference from the grid. It's called "feed-in" because the direction of current flow when exporting to the grid is the exact opposite of the direction when drawing power from it.

5.3 On-grid system with storage (Hybrid)

This is an add-on layer that can be integrated into either of the types above. With battery storage in place, the system becomes far more self-sufficient: it can operate independently and keep supplying loads even during a grid outage, an export restriction, or a technical fault. Because of this, storage-equipped systems are typically the preferred choice for loads that demand high reliability, such as emergency communication systems, medical equipment, gas stations, or lighting/signage at shelter sites.

7.1. Advantages

• Significantly lower upfront cost compared to hybrid or off-grid systems, since no battery or storage equipment is needed.
• Surplus power can be sold back to the grid through net metering.
• Helps ease pressure on the transmission grid during peak hours and reduces long-distance transmission losses, since power is generated and consumed close together.

7.2. Disadvantages

• Fully dependent on the grid: during an outage, the system is required to shut down for safety reasons (anti-islanding), unless battery storage is added in a hybrid configuration.
• Grid connection must comply with the technical standards and procedures set by the local utility.
• Not well suited to areas with frequent power outages.

8.5 Integrated solutions and energy management solutions

• Sigen Energy Gateway: a central coordination hub that lets multiple inverters run in parallel and automatically switches between the grid, inverter, battery, and diesel generator with zero interruption to connected loads. Rated 12 – 30 kW for residential use (Gateway HomePro), scaling up to several hundred kW for industrial projects.
• Sigen Cloud & mySigen App: a remote monitoring and management platform for real-time tracking of energy production, consumption, and battery status.
• Sigen EVAC Charger: an EV charger integrated into the wider energy ecosystem, with bidirectional (V2X) charging support on select models.