(Nectr formally known as InstyleSolar)

What Are Solar Inverters? How Do They Work?

The solar inverter is a very important part of your solar power system: photovoltaic panels generate direct current (DC) when they receive sunlight, but your home appliances run with alternating current (AC) like that from the grid. In simple terms, the solar inverter is the device in charge of converting DC power to AC. If you connect solar panels and home devices directly, without a DC-to-AC conversion, your devices will simply not work or they can be damaged.

Solar inverters also have the ability to synchronise with the AC voltage and frequency supplied by the local power grid, which means both systems can operate as one. Thanks to this feature, your home can use electricity from solar panels and the grid at the same time, and there is no need to separate both sources with a physical switch.

  • When your home appliances are consuming more power than what your solar panels are generating, the difference comes from the grid.
  • On the other hand, when your appliances are consuming less power than what your solar panels are generating, you can send surplus power to the grid. In this case, the electricity provider gives you a credit that is subtracted from your next bill.

There are many types of solar inverters, each designed for a different type of solar system. The following table summarises some of the main inverter types, which will be covered in detail in this article:

Inverter TypeApplications
Traditional string inverterGrid-connected solar systems with no battery, where one inverter converts the DC power from multiple solar panels.
MicroinverterGrid-connected solar systems with no battery, but are smaller inverters that go directly on solar panels. In other words, you need one microinverter for each panel.
String inverter with power optimisersThis is a string inverter with an additional feature. Each solar panel is equipped with a power optimiser, an electronic device that increases electricity output by optimising voltage and current.
Hybrid inverterThis inverter is designed to manage solar panels and battery systems simultaneously. In other words, you can connect both systems to the same inverter. Some hybrid inverters can operate off-grid during blackouts, but not all models have this feature.
Battery inverterThis inverter is designed exclusively for a battery system, which is separate from solar panels.
Multi-mode inverterA larger and more powerful type of inverter that is designed for off-grid solar power systems, but it can also connect to the grid.

As you can see from the table above, each type of inverter is designed for specific applications. For example, if you plan to install solar panels and batteries together, you can use a hybrid inverter to connect both systems. However, if you already have solar panels with a traditional string inverter, you can install a separate storage system with its own battery inverter.

Modern solar inverters have a feature called maximum power point tracking or MPPT. Using power electronics, they can constantly adjust the voltage and current of each solar panel circuit, achieving the highest possible output. Since MPPT increases the electricity production of solar panels, it also increases your power bill savings.

Customer looks at solar inverter outside home and points at LED display
Sungrow Inverter

Traditional string inverters

When you read the term “solar inverter”, it generally describes a traditional string inverter for solar systems without batteries. This type of inverter is designed to control several solar panels at once:

  • Solar panels are wired together in series circuits, also called strings.
  • The solar panel circuit is wired to the string inverter, and some models can handle multiple circuits.

Since the solar panels are wired in a string, their power generation adds up. If you have a string of 10 panels and each is generating 300 watts, the circuit will deliver 3,000 watts to the inverter. However, this is DC power that cannot be used directly by your devices, and the inverter converts it to AC power.

No power conversion device is 100% efficient, and this also applies to solar inverters. However, the best brands normally offer efficiency ratings above 97%. Assuming this value, the 3,000 watts of DC power in the example above are converted into 2,910 watts of AC power.

Since solar panel arrays rarely reach their maximum capacity, inverters are normally sized smaller than them. For example, you will often find 6.6-kW solar systems with 5-kW inverters. However, there is an economic reason for this:

  • The wattage of solar panels is tested under laboratory conditions, and their power output under these ideal conditions is what you see in specifications.
  • However, solar panels almost never have ideal operating conditions in actual projects, and this means they operate at lower wattages most of the time.

Solar inverters can be sized smaller to reduce upfront costs, and this has a minimal impact on electricity production. In rare occasions where your solar panels generate more watts than the inverter can handle, the extra power is simply “clipped off”. This only happens for short periods during the sunniest days, and the cost of a larger inverter is more than the extra savings it offers.


Microinverters are smaller devices that go directly on solar panels, as discussed in the table above. This means each solar panel operates independently from the rest, which is an advantage on rooftops with uneven shading or complex geometry. However, microinverters are also more expensive overall, since you need one for each solar panel. For example, you need to use 20 microinverters if you have 20 panels.

When solar panels are connected in strings, they become dependent on each other. This means all panels will be affected if one of them is malfunctioning or covered by a shadow. You can also have issues if solar panels with different orientations are wired together: 

  • When two solar panels get sunshine from different angles, their power generation profile is also different.
  • As a result, they will interfere with each other when wired together.

Microinverters eliminate shading and orientation issues, by making each solar panel independent. However, you can achieve the same effect by simply using a smart layout: a qualified provider like Nectr can identify the best areas of your roof, and solar panels are grouped according to their energy production profile. In this case, microinverters are not necessary, and you can save on installation costs by using a traditional string inverter.

Enphase Micro Inverter on white background
Enphase Micro-inverter

String inverters with power optimisers

This type of inverter can be considered a mix of the two types above. There is a central inverter that converts the DC power coming from solar panels, but the system also uses an individual power optimiser for each panel. As you might guess, solar systems with power optimisers are also more expensive, since there is an additional device connected to each panel.

Some manufacturers offer inverters that can operate with or without optimisers, giving solar system designers more flexibility. If your solar panels can be arranged into a smart layout that prevents shading and orientation issues, DC optimisers are not necessary and the inverter works like a traditional unit.

Hybrid inverters

Hybrid inverters are compatible with both solar panels and batteries, and they are often described as “battery-ready inverters” by manufacturers. If you want a solar PV system with energy storage capacity, a hybrid inverter makes the installation much simpler:

  • The first solar battery systems were more complex to install: They needed a charge controller to manage the flow of electricity from solar panels to the batteries, and then an inverter to convert DC power into AC.
  • A hybrid inverter makes the installation simpler, since it can manage batteries directly without an external charge controller. In other words, it combines two devices into one (solar inverter + battery charge controller).
  • The Fronius Symo is an example of a hybrid inverter that offers excellent performance.

A hybrid inverter is recommended if you plan to install solar panels in the short term, and you are considering batteries in the future. The unit can operate like a traditional solar inverter initially, only with photovoltaic modules, and the battery system can then be connected and configured. 

On the other hand, if you already have solar panels with a traditional inverter, there are two ways to add energy storage:

  • You can upgrade to a hybrid inverter, and connect the existing solar panels and the new battery system to the same unit. This is called a DC-coupled system, since solar panels and batteries interact using DC power, connected to the same inverter.
  • You can install a separate battery system with its own inverter, and the existing solar panels and inverter will continue operating without changes. This is called an AC-coupled battery system, since the solar array and battery system are connected independently to your AC installation, each with its own inverter.

A DC-coupled solar battery can achieve higher efficiency since there are fewer power conversions involved (one hybrid inverter). On the other hand, an AC-coupled battery loses some efficiency because there are more power conversions between DC and AC (one solar inverter and one battery inverter). However, an AC-coupled battery is easier to install if you already have solar panels with a traditional inverter.

  • The LG Chem RESU series is an example of a DC-coupled battery, which is normally installed with a hybrid inverter like the Fronius Symo.
  • The Tesla Powerwall 2 is an example of an AC-coupled battery.

Just like traditional string inverters, some hybrid inverters are compatible with power optimisers. This means you have four possible configurations with the same device:

  • Traditional solar power system (no power optimisers, no storage).
  • Solar PV system with power optimisers only.
  • Solar PV system with battery storage only.
  • Solar PV system with both power optimisers and battery storage.

This design is used by the Huawei FusionSolar series, which has optional SUN2000-450W-P power optimisers for solar panels while being battery-compatible.

Battery inverters

This type of inverter is designed exclusively for batteries, as you might guess from its name. There are two main ways to use battery inverters in solar power systems:

  • Adding energy storage to an existing solar system: As mentioned above, if you already have solar panels with an inverter that is not battery-compatible, you can install an independent energy storage system with a battery inverter.
  • Converting DC power from a battery system that charges with solar panels: Off-grid installations often have solar panels that are used exclusively to fill batteries, using a charge controller. In this case, a battery inverter is used to convert the DC power from those batteries into AC.

In other words, battery inverters don’t interact directly with solar panels. However, they have applications in AC-coupled battery systems and off-grid installations. 

A battery inverter is also useful when you need to add energy storage to a solar panel system with microinverters. In this case, the DC power produced by each solar panel is converted to AC at the source, which means you don’t have the option of a DC-coupled system. However, you can easily set up an AC-coupled storage system with its own battery inverter.

Multi-mode inverters

Some hybrid and battery inverters can power small and medium appliances off-grid, which makes them useful during blackouts. However, these inverters are not designed to start larger devices like air conditioners and electric water heaters.

  • If you plan to go off-grid permanently with solar panels, you need a multi-mode inverter.
  • This is a more powerful type of inverter that is suitable for 24/7 off-grid operation.
  • Multi-mode inverters are versatile, since they can also operate as grid-tied inverters.

Going off-grid is a lifestyle decision, and can normally get a higher ROI from solar power by staying connected (even when your system includes energy storage). A grid-tied system can be sized optimally to shorten your payback period, while you continue to use the grid as backup, especially when using devices like air conditioners and electric water heaters. On the other hand, an off-grid system must power these devices on its own, and this makes it more expensive: you need a more powerful inverter and a larger battery system that never runs out.

Next Steps…

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