On-Grid vs Off-Grid Solar Power Systems: What’s the Difference?

Installing solar power systems, whether at your home, office or in an organization requires a heavy initial investment. Not only this, but solar panels do also have a longer payback period.

So, it is best to have good knowledge of various PV systems before installing one. Doing so will not only help you in making investment-worthy decisions but also prevents you from regretting later.

Well, in this post, I am here with a detailed comparison between on-grid vs off-grid solar power systems.

Here’s what we will learn today?

  • 3 different types of solar power systems,
  • The difference between on-grid & off-grid systems &
  • Which one is best for you?

If you are new to our blog, then I suggest going through the basics of solar energy that we have covered in our earlier posts.

3 Different Types of Solar Power Systems

Before we begin, let us first understand what a solar power system is?

Here how we can define it –

A solar power system is a system that constitutes all the components required to harness solar energy. Some main components of a solar PV system are:

  • Solar panels, for converting sunlight into energy.
  • A Solar Inverter, that converts DC (Direct Current) into AC (Alternating Current).
  • A digital meter that measures the amount of energy produced.
  • Batteries can also be used to store energy for later use, etc.

Related: AC vs DC Solar Battery Storage

Generally, there are 3 main types of solar power systems: on-grid, off-grid & hybrid systems.


On-Grid System

Also known as a grid-tied system, an on-grid system is a system that is connected to the utility grid. Let us understand it with a simple example.

Suppose, you have installed solar panels at your home that produce 1 kWh of electricity every day. However, your home requirement is just 500 Watts. Now, If you send the rest of the electricity back to the utility grid, then it is called an on-grid system.

The below image can depict the complete working of an on-grid solar power system.


Working of an on-grid system involves the following steps:

#1: Solar panels generate electricity in the form of direct current with the help of the photovoltaic effect.

#2: Next, a solar inverter is used to convert DC into AC. We need to do this because the appliances we use at our home are AC compatible.

#3: The inverter then sends the required amount of energy to our home & the rest to the grid through a net meter.

At night when PV panels stop working, the flow of electricity gets reversed. Now, the electric current starts flowing from the grid to our home.

This is the complete working of an on-grid solar power system. Let’s also have a look at its pros & cons.

Pros of On-Grid Solar Power Systems:

  • It can help you make money (with the help of net-metering) while enjoying free electricity during the day.
  • You can use the grid as a storage system from where you can use electricity at night.

Cons of using an On-Grid System:

  • If a power outage takes place at night, then you will be left with no power.
  • It does not completely lead to energy independence.

Off-Grid System

In an off-grid system, batteries are connected for backup & electricity is not sent to the grid.

Here is the complete work-flow of an off-grid solar power system:

#1: Similar to on-grid, first solar panels convert sunlight into direct current which is then received by an inverter.

#2: The inverter then converts it into AC (that can be used by electrical appliances at our home).

#3: From the inverter, AC is then delivered to our home & the rest energy is used to charge the battery.


Suppose, the power coming from solar panels is 1000 watts & out of which 700 watts are used in our home during the day & rest 300 watts to charge the battery.

Now, consider the battery is fully charged & our home requirement is still 700 watts, then, in this case, the 300 watts get wasted which is a drawback of this type of system.

At night when solar panels stop working, the inverter first uses the energy stored in the battery & when it is about to finish, it initiates the connection from the grid.

The electricity coming from the grid is now used to charge the battery as well as to power the home.

Note: In an off-grid system, you can also use a generator instead of a grid for backup power supply.

Pros of Off-Grid System:

  • It gives you a battery backup to deal with the power outage.
  • Can help you become energy independent.

Cons of using an Off-Grid System:

  • Extra energy left after charging batteries can go waste.
  • At night, the battery discharges & charge continuously because of which its lifespan reduces. 

Hybrid System

In both on-grid & off-grid systems, there are some complications. These complications are removed & a new type of system is formed called the hybrid system.

In a hybrid system, both battery and grid are connected to the inverter. It works out as a combination of both on-grid & off-grid systems.

Working process:

#1: Similar to the other two systems, solar panels are used in hybrid systems to convert sunlight into electricity. 

#2: Inverter is then used to convert DC into AC supply.

#3: Now, from here the inverter first provides electrical supply to the home & then to the batteries. When batteries are fully charged then the left energy will be sent to the grid.

This way, it does not lead to energy wastage.

At night, when solar panels stop working, the inverter connects the home supply with the grid instead of the battery. Doing so can help in saving battery cycles.

If there is a power outage at night, then in this situation, the inverter will connect the home with batteries.

Hybrid Solar Power System

Pros of Hybrid System:

  • Zero wastage of power as the energy left after charging batteries is sent to the grid.
  • Since charging & discharging don’t take place frequently, it increases the lifespan of batteries.
  • You can make money by selling extra energy to the grid.
  • Provides an uninterrupted power supply.

Cons of Hybrid System:

  • High cost associated.
  • The number of appliances you can connect is limited.

On-grid vs Off-grid Solar Power Systems

Till now, we have seen three types of solar power systems; on-grid, off-grid & hybrid systems.

Let us now compare on-grid & off-grid based on factors like the cost associated, power loss, storage methods & grid outage problems.

1. Cost Associated

The overall cost of going on-grid is lesser as compared to off-grid. 

It is so because in the case of off-grid you are not sending any power to the grid. Thus, a lot of power gets wasted. Also, if you run out of battery backup then you have to pay for extra energy that you have taken from the grid.

On the other hand, in the case of on-grid, there is no power loss as any additional energy is sent to the grid. Furthermore, there is no cost associated with batteries that you may have to change every 3-4 years.

On comparing on-grid vs off-grid solar power systems on the basis of cost, we can say that on-grid is cost effective.

2. Power Loss

In case of off-grid excessive power is used to charge batteries & still if any power is left, it will get wasted.

While the power left after supplying to the home, is sent to the grid in case of grid-tied systems.

Thus, overall power loss is higher in the case of off-grid as compared to on-grid. 

3. Storage Methods

For storing electricity, batteries are compulsorily required in the case of off-grid. 

Although, the grid itself works as a power storage device in the case of on-grid systems. However, we cannot consider the grid as a backup for emergency usage.

4. Power Outage Problems

In the case of power outage problems, off-grid is better as compared to on-grid.

During the day, if there is a power cut, then you don’t have to worry about both these systems. However, during the night if a power outage appears, you can use batteries as a backup in case of off-grid.

On-grid on the other hand does not include a battery backup & so will leave you with no electricity at night.

Comparison Table: On-Grid vs Off-Grid

A tabular representation of the comparison; on-grid vs off-grid solar PV systems is as:

On-Grid SystemsOff-Grid Systems
1. No batteries are required.1. Batteries are required for energy storage.
2. No waste of energy since excess energy is sent to the grid.2. Excess energy is used to charge batteries. However, after batteries are fully charged, the rest of the energy gets wasted.
3. No battery backup, so if a power outage takes place at night, then you will be left with no power.3. Battery backup can help run electrical appliances, even if there is a power cut from the grid.
4. It does not completely lead to energy independence.4. It leads to complete energy independence irrespective of the size of the battery that you are using.
5. Best for regions where there are no frequent power cuts.5. Best for regions where there are frequent power cuts.
6. Lesser cost associated.6. Higher installation cost.

Suggested: 21 Surprising Benefits of Solar Energy That You may not Know

Conclusion: Which one is better?

Both on-grid & off-grid have their own importance. I have compared on-grid vs off-grid solar PV systems along with their key differences.

Now, the question is which one is better?

If you are living in those areas where there is no power outage issue, then you can go with on-grid. However, for areas with frequent power cuts, off-grid might be a good choice.

Choices are not limited to these two, you can also go for hybrid solar systems as it provides the functionality of both on-grid as well as off-grid.

Overall, what do you think – which one is best for you? Let us know in the comment section.

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1 Comment

  1. Erwin Friassays:

    How about explanation from comparing between hybrid and on grid, any prons and cons? Kindly or briefly explanation from that. Currently I’m using hybrid connection but having fear with batteries for so many reasons most likely expenses. Thanks and more power, and more sharing ideas!