On-grid vs off-grid vs hybrid solar inverters: which one does your business need?

The inverter is the brain of a solar system. Panels produce direct current (DC); your machines, lights and air conditioners run on alternating current (AC). The inverter converts one to the other, tracks the best operating point of the panels, protects the system and decides what happens when the grid fails.

That last point is where most buyers get surprised. Many businesses install solar expecting backup during power cuts, then find their system switches off the moment the grid does. Whether that happens depends on which type of inverter you choose.

On-grid (grid-tied) inverters

An on-grid inverter connects the solar panels directly to your building's electrical supply and the utility grid. Solar power is used first by your loads; any surplus is exported to the grid, and any shortfall is drawn from it.

What happens in a power cut: the inverter shuts down. This is a safety requirement called anti-islanding: it stops the system from feeding power into grid lines that utility workers believe are dead. So a plain on-grid system gives no backup.

Best for: sites with reliable grid supply that want the lowest cost per unit of solar energy. With net metering or net billing, exported units are credited against your bill, subject to your state's regulations and sanctioned load limits.

Advantages: lowest cost, no batteries to maintain, highest efficiency, simplest design.

Off-grid inverters

An off-grid system is not connected to the utility grid at all. Panels charge a battery bank, and the inverter supplies your loads from the batteries.

What happens in a power cut: nothing, because there is no grid. You run entirely on solar and batteries, often with a diesel generator as backup for long cloudy spells.

Best for: remote sites with no grid connection, such as farms, telecom towers, construction camps and rural facilities.

Considerations: batteries are a large share of the cost and need replacement during the system's life. The system must be sized carefully for your consumption and for the worst weather you expect.

Hybrid inverters

A hybrid inverter combines both: it connects to the panels, a battery bank and the grid. It can use solar first, store surplus in batteries, draw from the grid when needed and, crucially, keep critical loads running during a power cut.

What happens in a power cut: the inverter disconnects from the grid (anti-islanding still applies) and supplies a backup circuit from the batteries and panels. Switchover is typically fast enough for most equipment, but check the stated transfer time if you have sensitive loads.

Best for: businesses with frequent power cuts, critical loads (servers, cold rooms, medical equipment), or high peak-time tariffs where stored solar can be used in the evening.

Considerations: more expensive than on-grid, and battery choice (lithium-ion vs lead-acid) has a big effect on cost and life.

Central, string and micro inverters

Separately from on-grid/off-grid/hybrid, inverters also come in different architectures:

• String inverters connect groups (strings) of panels. They are the common choice for commercial rooftops.
• Central inverters are large units used in utility-scale plants.
• Microinverters sit behind each panel. They help on complex roofs with shading but cost more per watt.

Specifications to compare

• Rated AC output (kW) and maximum DC input (kWp).
• Number of MPPT trackers: more trackers let you connect panels facing different directions or with different shading.
• MPPT voltage range and maximum input current: must match your panel strings. Modern high-current panels need inverters that accept their current.
• Maximum efficiency and European/weighted efficiency.
• Phase: single-phase or three-phase, matching your supply.
• Protection features: surge protection, DC switch, anti-islanding, ground-fault monitoring.
• Monitoring: Wi-Fi or GSM data logger, app and web portal access.
• Ingress protection (IP rating) for outdoor installation.
• Warranty: standard years and extension options.
• For hybrids: battery voltage range, battery chemistry supported, charge and discharge power, backup output rating and transfer time.

Sizing in brief

The inverter is usually sized close to the solar array's capacity. Many designers use a DC-to-AC ratio slightly above 1 (more panel capacity than inverter capacity), because panels rarely produce their full rating in real conditions. Your installer should base the ratio on your location and the inverter's limits. For hybrid and off-grid systems, the battery is sized from the loads you want to back up and for how many hours.

Approvals

For grid-connected systems, your electricity distribution company (DISCOM) must approve the connection and net metering. They may require inverters that meet specific standards or are on an approved list. Ask your installer to confirm before you buy.

Frequently asked questions

Will my on-grid solar system work during a power cut?

No. On-grid inverters shut down when the grid fails, for safety. You need a hybrid inverter with batteries, or a separate backup system, to run loads during power cuts.

Can I add batteries to an on-grid system later?

Often, yes, either by replacing the inverter with a hybrid model or by adding an AC-coupled battery system. Plan for it at design time if you think you will want backup later.

What is MPPT?

Maximum Power Point Tracking is the inverter function that keeps the panels operating at the voltage and current that give the most power. Inverters with multiple MPPT inputs can optimise panel groups facing different directions separately.

Single-phase or three-phase inverter?

Match your electricity supply. Most commercial and industrial sites have three-phase supply and use three-phase inverters, which also balance generation across phases.

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Compare suppliers in solar inverters, solar panels, energy storage systems and batteries. If you're planning a project, post your requirement with your load, site location, grid situation and backup needs. For panels, read our solar panel buying guide.