Grid-Tied Vs. Off-Grid (What are the key differences?)

Grid-tied vs. off-grid, which is best for you?

Whether you’re looking to become self-sufficient, save money, or simply want to lead a more environmentally friendly lifestyle, there is a solar system out there for you!

Solar power systems allow you to either be completely independent of your grid supplier or remain partially dependent on them. Either way, there are pros and cons to each type of solar power system, ranging from location to suitability and cost.

In this article, we look at the various systems and aspects to consider when choosing between grid-tied vs. off-grid setups to help you better understand your choices.

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Grid-Tied Vs. Off-Grid Solar Systems

Let’s start by looking at the specialized aspects of grid-tied vs. off-grid solar systems.


Having a grid-tied solar power system means that you still have a connection to your local power utility grid.

If the electricity demand from your house is greater than the power produced from your solar panels, then this solar power system comes into play. In other words, this type of system is useful when you need more power than what your solar panels have produced.


An off-grid solar power system is completely independent of your local power grid.

These systems allow you to rely entirely on the energy your panels produce to power your household.

Here is a quick look at the major differences between the two in relation to power:

Grid-Tied Solar Power SystemOff-Grid Solar Power System
Uses solar power generatedYesYes
Back-up connection to your local service gridYesNo
Dependency on power from your panelsPartialFull
Affected by local grid power outagesYesNo

So which type of solar power system is the right one for you? Is one better than the other?

The answer to these questions depends on your needs and how suitable each system is for you.

In order for you to make the choice, let’s explore how to gain an understanding of how the systems work and what costs may be involved.

How Does A Grid-Tied Solar System Work?

Grid-tied systems work by having solar panels that provide power to your house (through an inverter) along with a connection to your local utility grid. Your house will run on solar power until the demand is higher than what is available, then your house will switch to using power from your local utility grid connection.

To have a grid-tied system set up, you’ll need to buy suitable equipment that is non-negotiable for a functioning system. This includes:

  • Grid-Tied Inverter: To regulate the power coming in from your solar panels. The direct current your panels bring in is converted into alternating current, which your appliances use. Another type of inverter you could consider is a micro-inverter. This inverter sits at the back of each solar panel and converts the power per panel instead. A pretty decent option if your panels seem to be under shade quite often. 
  • Power Meter: To measure the power going from your solar panels and your utility grid connection. This meter measures the power going both ways, and sometimes your local provider will install one cost-free.
Grid-Tied solar system diagram -Grid-tied Vs. off-grid.
Source: Green Coast

How Does An Off-Grid Solar System Work?

The standalone solar power option which keeps you completely off-grid is a good alternative if you want or need to be fully independent of the local utility grid. In other words, you’ll be completely power-independent due to your solar panels. This power will run from your panels to a set of solar storage batteries, through an off-grid inverter, and straight into your household.

If you wish to install this system for your household, there is crucial equipment that must be installed for your system to function as a unit. This includes:

  • A Solar Charge Controller: these regulate the amount of power flowing to your solar batteries. This is really important to have in order to prevent damage to your batteries by stopping them from overcharging.
  • A Battery Bank: this stores the power generated from your panels. The battery bank is important to have unless you prefer living in the dark after sunset.
  • DC Connect Switch: this sits between the battery bank and the inverter. This switch is used to switch off the current when maintenance needs to be done.
  • Off-Grid Invertor: this regulates and converts the current flow from your panels into AC current which your appliances use to power on.

There are extras you can install, such as a backup generator for when there is no sunshine for your panels to charge. This, however, depends on the area you live in and the budget you’re on.

Off-grid solar system - Grid-tied Vs. off-grid.
Source: Green Coast

Cost Comparison: Grid-Tied Vs. Off-Grid Solar Systems

After reading about the types of grid solar systems and the equipment you’ll need, you’re probably wondering how heavy this is all going to be on your wallet.

Well, each system has different costs over the short and long term, so it’s important to look at these and think about your budget options in a balanced way. But consider this – what is costly now could save you money in the future.

Whew! Where To Begin?

Well let’s start by comparing grid-tied vs. off-grid equipment and installation costs to run a household:

Grid-Tied System (Full KIt)Off-Grid System (Full Kit)
$15,000 for the lower effective panels and the lowest range monthly output (to run minimal appliances)$30,000 for lower range systems (lower range panels, lower quality batteries, and lower range output)
$30,000 for kits with highly effective panels and high monthly output (to run multiple appliances)$ 70,000 for higher-end systems (effective panels, quality batteries, and excellent output)

It’s also important to consider the location you live in. Are you staying in a hot and dry area with daily sunshine? Or do you have cloudy days on a regular basis? This will have an impact on how many panels you need for your household, therefore affecting the total cost. Basically, the more panels you need, the more you will pay.

Maintenance Cost Per System

Grid-Tied SystemOff-Grid System
Inverters and DC controllers are to be replaced after an average of 8 years.Batteries, inverters, and DC controllers are to be replaced after an average of 8 years.
General check-up 2-3 times a year ($400 per check-up)General check-up every 3 years ($400 per check-up)
Cleaning of panel system a few times a yearCleaning of panel system once every few years

The Result

What the table above shows us is that grid-tied systems are more expensive to maintain, whereas off-grid systems cost less to maintain (depending on the quality of your system, of course).

Don’t Forget About Incentives

There is one last factor to consider when working out the cost of your potential system incentives.

In some states, there are local and federal power-generating incentives where you actually get credited for the electricity that your system creates.

These incentives differ across local areas and types of solar installations but can make a wonderful difference to the impact of your spending!

Which Is Better For Me: Grid-Tied Or Off-Grid?

When deciding which type of solar grid system is best for you, there are a few things to consider:

Your Immediate Environment

Shadier, colder areas will need more solar panels to generate enough power for your needs. This will cost you more to install.

Your Location

Remote areas without local grid connections are areas where off-grid options are the best fit. Residential areas could offer local or regional incentives to credit you for generating green power, which lowers the expense of a grid-tied system


If you can afford a big spend immediately without breaking the bank, then off-grid systems are great independent options with low costs over time. Grid-tied systems will save you more in the short term but cost more to maintain over time.

A great idea would be to visit one of your local solar system providers and find out what full system kits they sell. This will give you a great idea of what options are on the market which will give you the power you need at a price range you can afford.

 An example of a full kit.
An example of a full kit.
Source: Unboundsolar

Your needs

The choice between grid-tied vs. off-grid depends on your needs.

If you need to run a big household with a high level of power usage, then grid-tied solar power systems provide a great backup option. Off-grid systems have the advantage of being able to store power to use later, through the day, and at night.

Final thoughts

As the grid-tied vs. off-grid question circles your mind, deciding on the type of solar power system that will be right for you can seem like a daunting task surrounded by uncertainty. Am I making the right choice? What if I regret the system I have chosen. Is it enough for what I need?

Don’t panic! Each grid solar power system has its pros and cons.

Where off-grid is better suited to remote areas and is more costly in the short term, grid-tied systems are better suited to residential areas. They will just cost you more in the long run (depending on where you live). Where demands for power are higher throughout the day and night, off-grid systems provide consistent power without additional grid costs that are a part of grid-tied systems.

Truthfully speaking, it’s really important that you consider the following:

  • Immediate living environment (do you get a lot of sunshine?)
  • Your location (is there a local grid available for connection?)
  • Your budget over time (what can you afford now, and what can you pay for later?)
  • What your needs are (are you going to need a lot of power over day and night?)

Once you have those aspects carefully figured out, then do some research on your local providers and take the time you need to make your purchase!

Have more questions for us? Let us know in the comment section below.

Charissa Worthmann
Charissa Worthmann

Charissa has a Master’s in Environmental Management (Environmental Science). Her research area of interest and expertise is in the interaction between energy and the environment. She practices as an environmental consultant and has extensive experience working on renewable energy projects.