There are currently two types of solar panel systems sold on the market. Although they both offer the same energy producing principals they have different features that separate them in cost.
A grid tied unit is the more cost effective system of the two. These solar power systems are tied into the main utility grid and make up over 99% of all solar systems installed in the United States.. Grid-tied allows for the transmittance of excess power to be collected back onto the main grid, which in turn the utility company will give power credits for. In essence, grid tied system are selling the extra power back to the utility company for later use.
Before getting too excited about the prospect of selling power to the power company understand that there is good reason for creating the power credit. Solar panels do not produce energy at night or in the dark. At night you will need to draw power from the utility companies grid. The goal being to draw the same amount of power at night that you so generously sold to them during the peak of the day. Thus, canceling out any costs incurred.
The grid tied systems are more cost effective than the off grid systems because they differ in one area. They must still rely on the power companies for off hours power.
Off Grid Systems
Off grid systems or photovoltaic systems are self reliant “and completely off the grid”. Unlike grid tied system, they have the ability to store there excess power in battery cells for later use. In the night hours or non sunlight hours the charge on the batteries can then power the home. These systems have zero reliance upon the utility companies and are self sufficient. Although the off grid systems cost slightly more, mostly due to the cost of the batteries. They have the benefits of removing your household from future electrical bills, and power outages.