The difference between on-grid, off-grid, grid-tied, grid-connect

Wondering about the difference between on-grid, off-grid, grid-tied and grid-connect solar power systems?

If you’ve been thinking about investing in solar power you’ve probably been flooded with a range of terms you’ve never heard before. Take heart: you’re not alone.

Going the solar way requires you to make some crucial decisions, one of which is whether you want to stay with or without power from the grid. We break down the definitions below.


On-grid solar power systems are ones you’ll find most commonly, and grid-tied, grid-connect and grid-direct systems refer to the same kind of solar power systems. Such a system connects to your energy supplier in case your solar system doesn’t produce enough energy. As a result, an on-grid system does not have to produce all the energy you require. If it ends up producing more energy than required, it sends excess electricity to the grid.

In the absence of adequate sunlight, when solar panels cannot work at optimum levels, you can conveniently draw electricity from the grid to meet your requirements. You can even have a net metering agreement with your electricity supplier, through which you stand to receive compensation for the excess electricity you provide to the grid.

If you opt for an on-grid system, know that it will not protect you from power outages. When there’s a failure at the grid, on-grid systems stop working with immediate effect. This is so the utility provider’s crew can fix the faults without the fear of electrocution owing to power coming through solar power systems.

Components that go into making an on-grid solar power system include:

  • PV panels
  • An inverter or more
  • Electrical safety gear like breakers, fuses and disconnects
  • A system to monitor production and transfer of energy


The use of off-grid solar systems is more common in regional and rural parts of Australia, where people cannot connect to the grid at all. An off-grid solar power system runs independently of the grid, and it requires enough PV panels to take care of all your power needs. Since homes tend to have higher demands for power in evenings and nights, when production is minimal or absent, such systems normally use batteries or rely on backup in the form of a generator.

Off-grid systems are definitely more complex than their on-grid counterparts, and they offer considerably lesser flexibility. In addition, you have to monitor electrical usage continually and keep the panels’ output below maximum levels because you cannot supply any excess power to the grid.

Components you’ll find in an off-grid system include the following:

  • PV panels
  • Battery
  • Inverter/s
  • Charge controller that keeps the battery from overcharging
  • Electrical safety gear like breakers, fuses and disconnects
  • A system to monitor and balance consumption of energy with production
Back to top


You have the option of upgrading an on-grid system by incorporating the use of battery backup. Power from the solar power system and the grid works in charging the battery backup, and if you suffer from a power outage you can turn to the backup. Switching to the backup in such a scenario can be manual or automatic, depending on the kind of system you choose.

The components that go into making a hybrid system are essentially the same as ones you’ll find in an on-grid system, with the addition of suitable battery backup.

Back to top

Which is best for you?

If you don’t have access to the grid, you have no other option than to go the off-grid way. If you have access to electricity from the grid, installing an on-grid system makes more economic sense. This is because on-grid net-metered systems get very high levels of efficiency and almost unlimited storage in the grid. An off-grid system, on the other hand, can lose a considerable percentage of power in the form of charging and discharging losses, and battery systems cannot really make up for lost winter production during summer months.

Choosing between an on-grid and an off-grid system essentially boils down to whether or not you have access to the grid, especially if you’re looking at it from a monetary point of view.

Shahedul Islam

Shahedul is the publishing assistant for He's Internet savvy and loves to learn new things about finance and technology. He spends most of his time learning about the wonderful world of the internet.

Was this content helpful to you? No  Yes

Related Posts

More energy guides

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.

2 Responses

  1. Default Gravatar
    MASMay 28, 2017

    If there are frequent interruptions or massive load shedding by the grid system, which system works best in fulfilling the household needs but not closing the system when there is no supply? If it is hybrid then it will function jointly thru use of a battery backup for emergency load only?

    • Default Gravatar
      JonathanJune 1, 2017

      Hi MAS!

      Thanks for the comment.

      Usually, Hybrid system is being used due to its flexibility of using the stored power from the batteries during severe power interruptions. It is only a back-up system, therefore on-site grid is still accessible once power is available.

      Please get in touch with your energy distributor as availability, technical requirements and monetary resources may be considered for any grid choices.

      Hope this helps.


Ask a question
Go to site