The vast majority of solar electricity systems being installed in California and throughout the United States today are a configuration called grid-tied systems. This means that they operate without batteries or other forms of on-site energy storage, and that a home or business that installs one of these systems remains connected to the local utility grid. During the day, large systems may generate more energy than the home or business they are installed on uses, and the surplus of energy is fed back out onto the utility distribution system and helps to power loads elsewhere. In the simplest case, this back-feeding process moves the counter of the electricity meter on site in the reverse direction, effectively canceling out some or all of the electricity use that was recorded the night before when the system was not active, and allowing the possibility of a net usage, and a billed usage, of zero, even though at certain times energy is being drawn from the utility grid. This process is called net-metering.
In many cases in California, net-metering is coupled with time-of-use billing, in which a new meter is installed that notes the time of day electricity is being used, or produced, along with the quantity. A time-of-use rate schedule values electricity at a higher rate during certain times of day than during others, in particular during the times of day when demand is highest, and use of peak plants to meet this extra demand means this electricity is most expensive to generate. The solar resource is greatest during the summer in the middle of the day, which is also the period when the use of air conditioning units for cooling places the most strain on the grid in California, and so generally surplus power generated by a solar system during the day will yield a credit at an appreciably higher rate than the electricity consumed at night will result in a charge. This means that in many cases a system does not need to be large enough to produce all the energy that is used at a home or business annually to deliver a balance-free bill.
The basic components of any grid-tied solar electricity system are the photovoltaic modules and the inverter. Photovoltaic modules – solar panels – produce a voltage that can be used to drive a direct current, the same kind produced by a battery, when exposed to light. This electric current is transmitted through wires to the inverter, which changes the direct current it receives into an alternating current, the kind most home appliances are designed to operate with and the kind which is transmitted on the utility grid. Grid-tied inverters track and regulate the voltage level of the photovoltaic modules at the point that optimizes the energy produced as this point changes with conditions, and shut down automatically when the utility grid goes down to safeguard the welfare of line workers. The inverter is most commonly wired directly to a circuit breaker in the utility panel of the home or business, through which it feeds power to the loads there or elsewhere on the grid. Many grid-tie inverters have integrated direct current and alternating current system disconnect switches, and in some municipalities additional disconnecting means are installed as well.
Currently, in the state of California there is a rebate offered on the purchase of a solar electricity system for a home or business, based on the expected production of the system, which is administered through the applicable utility company. There is also a federal investment tax credit offered on the purchase of a solar electricity system, worth thirty percent of the remaining cost of the system after available rebates.