A grid-tie system requires a handful of components. The installation of solar panels will enable not only the collection of solar power but also the conversion of this energy into a direct current (DC). A combiner (junction) box provides connectivity, while an inverter will convert DC power into an alternating current (AC). An import/export meter tracks the generation and consumption of energy. The grid disconnect allows consumers to shut down the flow of power between the solar power system and the in-house electrical system, allowing for routine maintenance.
The two types of grid-tie systems are those with battery storage and those without. Grid-tie systems with battery backup, known as battery-to-grid (B2G), continue to provide energy when the power grid goes down. Because stored power can be used instead of drawing power from the grid, a B2G system reduces electricity costs. The downside revolves around the cost of both batteries and a charge controller. Grid-tie systems without battery backup require only photovoltaic panels and an inverter; however, these systems are unable to supply power if the grid fails.
Currently in use in many states, the solar net-metering program enables the consumer with grid-tie systems to send surplus energy back to the local power plant. Consumers who participate in these programs will have a smart meter—also known as Time of Use meter—installed to record not only how much but also when energy is used or produced. In general, daytime peak energy is most expensive. State regulations also vary. Some states require utilities to purchase solar power at market rates while others are less restrictive on pricing. There are states that forbid consumers, who own grid-tie systems with battery backup, from participating in net-metering programs.
To date, consumers are eligible for a federal tax credit of 30 percent for solar systems that meet the government’s qualifications. This credit is due to expire in 2016.
Some power plants use a tiered-rate structure to bill consumers for energy use. As consumption increases, the price per unit of energy (kWh) also increases. Hence, a cost-effective, grid-tie system enables “peak shaving,” or the reduction of energy use during those hours when power is most expensive.