How to choose the right system: Grid-tied, off-grid, or hybrid?

Currently, the majority of homeowners are installing grid-tied solar systems that interact with their utility. However, there are other types of solar PV plus Battery systems, like Off-Grid, and Hybrid solar systems. These alternatives help reduce carbon emissions, lower electricity costs, and enhance energy security. 

While finding the best solar system for your home, the choice between these three installation categories may depend on your location, budget, and overall energy goals.

In this guide, we discuss solar energy system basics, explore pros and cons, and showcase precisely how to choose the best solar power system for your home.

Grid-tied solar systems

In the mid-2020s, a large majority of solar panels on homes are considered “grid-tied,” which means that they’re “tied” to the local utility grid and rely on it to function. With the help of net metering or net billing programs, grid-tied systems can lower your home’s energy costs with minimal investment required.

Pros of Grid-tied solar systems

• Low upfront costs. Compared to off-grid and hybrid systems, grid-tied solar systems are typically installed with the lowest total costs.
• Net metering and net billing participation. Connected to the utility grid, the excess electricity your panels produce can lower your monthly energy bills. Although policies vary by location and utility, net metering is currently mandatory in over 35 states.
• Access to grid power. Grid-tied solar systems do not force your home to run on the sun alone—utility power remains available on your property.

Cons of Grid-tied solar systems

• No power during outages without a battery present. If you experience a utility power outage, whether planned or unexpected, grid-tied solar panels will automatically shut off. Your solar panels must then remain shut down for the outage’s duration to protect those working to repair lines or restore power.
• Restrictions and fees may apply. Though not usually excessive, grid-tied solar panels can be subject to more fees and regulations than off-grid solar systems. Before your system becomes operational, approval must be granted by the local building authority and energy utility before and after your installation.

Off-grid solar systems

With the help of an energy storage battery or a generator, off-grid solar systems function independently as a sustainable source of electricity anywhere the sun shines. Off-grid systems are necessary in remote areas without access to utility power.

Pros of Off-grid solar systems

• Energy independence. Off-grid solar systems are completely independent and suitable for remote locations.
• Separate form grid influences. Unconnected to utility power lines, off-grid systems are unaffected by fluctuations in energy prices or solar policies and will remain operational during local outages.

Cons of Off-grid solar systems

• Higher upfront costs. Due to the hefty amount of storage required to back up an entire home, off-grid systems usually come with higher upfront costs than solar panels installed without a battery.
• Limited by battery capacity. When completely off-grid, careful energy management is required to keep your home’s essentials running within the constraints of your battery reserve.

Hybrid solar systems

Offering the “best of both worlds,” a hybrid system refers to solar panels interconnected with the grid as well as a battery backup. Hybrid system popularity is accelerating, with grid-connected, battery-backed installations estimated to make up 28% of new distributed solar projects by 2028.

Pros of Hybrid solar systems

• Backup power. A hybrid solar system can remain functional and deliver power to your home during a local grid outage.
• Operational versatility. In shifting between grid-tied and off-grid modes, hybrid systems provide high levels of control over your energy sources and costs.
• Storage capacity flexibility. Unlike an off-grid system, a hybrid system’s performance is not restricted by battery capacity alone; homeowners can purchase smaller or less expensive batteries for infrequent use.

Cons of Hybrid solar systems

• Higher upfront costs. Battery storage and hybrid solar inverters can drive up total installation costs and limit potential return on investment (ROI).
• Extra equipment required. With additional hardware on-site, hybrid systems require more installation space and increase the amount of potential points of failure.

How to choose the best solar system for your home

While comparing grid-tied, hybrid, and off-grid solar systems, you can weigh the following four factors to find the best solution for your home.

1. Location

If your home is connected to the grid, your choices may be limited to a grid-tied or hybrid solar system, as utility disconnection is not permitted in most residential areas. Conversely, an off-grid solar system may be your only option on a property that does not receive electricity as a service.

2. Backup power

Homes that frequently experience blackouts due to local weather or power line conditions should strongly consider a battery-backed solar system for ongoing access to electricity. Hybrid systems also allow you to use more of your solar energy directly, thus providing greater control over your power costs and carbon emissions.

3. Budget

Although the total price of an off-grid solar inverter and battery has lowered significantly in the last five years, hybrid systems are still more expensive than those without storage. Knowing this, grid-tied panels usually deliver the quickest payback period for American homeowners with the lowest upfront costs.

As you make these financial decisions, it’s also important to consider any solar tax incentives or rebates available. Critically, the Inflation Reduction Act of 2022 allows eligible homeowners to earn income tax credits worth up to 30% of the total costs to install a solar system, with or without storage.

4. Local energy programs

A grid-tied or hybrid solar panel system’s value largely depends on what utility programs are available in your area. For example, the time-of-use billing structure and value of grid exports in NEM 3.0 incentivizes Californians to install batteries for maximum solar savings. Even further, states like Massachusetts and Colorado have launched smart grid-sharing programs specifically for homeowners with solar batteries.

Bottom line

If you are interested in going solar, it’s worth it to explore your options and weigh the pros and cons of grid-tied, off-grid, and hybrid systems. Whether you want to maximize your savings, energy security, or environmental impact, an Enphase Home Energy System can help you reach your solar goals.

Learn more about home solar with Enphase.