A “Grid-Tied” solar power system is a basic type of system that is interconnected to the grid, and the grid accepts (the utility meters) power coming from the solar power system to the grid. In other words, the home's breaker panel is powered simultaneously by solar power and grid power, and excess solar power can flow to the grid (resulting in credits issued from the utility).
Grid-tied solar requires an interconnection agreement with the utility, in order for the utility to compensate the generator (homeowner) for power generation according to PURPA guidelines.
Even solar power systems with batteries can be grid-tied, except that with a battery, less solar power is exported to the grid.
However, if a solar power system is configured to not export power to the grid, it is not technically grid-tied (even though the home may still be drawing power from the grid).
A basic grid-tie system serves one function for the homeowner: to offset a building's use of power from the grid. The purpose is not to sell power to the grid (unless the generation credit is worthwhile). Since a solar power system must synchronize with a power source, whether the grid or a battery, a grid interconnection has a lower cost than a battery system and offers a lower cost of entry for solar power as an investment.
Since solar power is generated only during the daytime, and systems are therefore sized to meet the average daytime power usage, grid-tie-only systems can only reduce grid use by about half. And since power generation and usage both fluctuate at any time, solar offsets only part of the demand from the grid and exports any extra power to the grid (unless otherwise curtailed). In other words, energy use that aligns with solar power generation reduces grid use, but since not all energy use is concurrent with production, it is not possible to consume 100% of the solar power (unless energy storage is utilized).
How it works
As solar power is generated it flows directly through the breaker panel and to any concurrent electrical loads on the property, reducing grid power use. Excess solar power flows to the grid, and insufficient solar power is compensated by the grid. The percentage of solar power used compared to solar power exported to the grid is known as your solar “self-consumption”. Higher self-consumption of solar power results in greater bill reduction since the price of electricity (from the grid) is much higher than credits (to the grid).
Power use and sunshine fluctuate constantly, varying by the season, the home, and the occupants. To fully optimize self-consumption, try to align power use with sunshine as much as possible, such as for vehicle charging, clothes drying, and cooking/baking. Invest in a battery system if you would like to store and use extra solar power overnight and have backup power.
Fortunately, several options for battery systems now exist that make it easier to start with solar panels alone and add a battery system later when you're ready.