What is a solar inverter and how does it work?

solar panel system cabinet

A solar power inverter is critical to a solar panel system. Without it, the system can’t generate electricity.

Solar panels are usually made from silicon, which provides a semi-conductor surface. The panels sit within a metal frame encased in glass. When particles of light – photons – hit the silicon of each individual solar panel, electrons become agitated. This creates a photovoltaic (PV) charge, which in turn produces an electrical direct current (DC). The panel’s wiring captures this current, and it’s the solar inverter that converts the DC to an alternating current (AC). Solar inverters connect the solar panel system to the existing electrical meter, or it feeds the power to the electrical grid.

How does a solar inverter work?

Direct current flows in one direction. Appliances at home run on AC, so conversion has to happen. The solar panel inverter accomplishes this over four steps.

DC-to-AC solar power inverter:

DC to AC solar panel inverter

Step 1) The inverter channels DC through its internal transformer

Step 2) The inverter transformer function is to lower the voltage and switch to AC

Step 3) The DC runs through two or more transistors

Step 4) The transistors are rapidly turned on and off to feed the transformer’s two different sides

A comparison: On grid and off grid solar inverters

Solar inverter connection to grids is gaining in popularity. The connection is made while wiring the system during installation. If the customer’s solar system produces more power than they need, it’s transferred to the utility meter and then to the grid.

With an on-grid solar inverter, also known as grid-tied, they can either build credit to reduce their bills for when they need the grid – called net metering – or depending on where customers live, get paid a feed-in-tariff (FIT). The benefit here for customers is not only reducing their electric bills, but in essence, the grid acts as their battery storage. That said, it’s also possible to add a battery to this type of system and store energy yourself, but the customer will need a battery-specific inverter to convert the electricity from AC to DC to store and discharge.

An off-grid solar inverter system is connected directly to the residence or commercial site to work with the building’s mains. The customer has no access to the grid, so a battery, which isn’t cheap, is needed for storing excess energy. That still might not be enough to ensure energy will always be available, so a generator as a back-up is a good idea.

On-grid solar inverter

Off-grid solar inverter

Connected to the grid

Relies solely on the sun – ideal for people who live remotely, away from power lines

Can sell excess electricity to utility company or reduce utility bill for power used

Connected to building or home’s mains – no electrical bills

Cost effective – no batteries involved, though batteries can be added

Requires a charge controller to maintain battery at highest state of charge

Special circuitry matches the voltage, frequency and phase of the grid –will not operate if it fails to detect the grid, i.e. power outages

Unaffected by power outages

Smart hybrid solar inverter system

There’s also a hybrid inverter, which is grid-tied. It’s a solar inverter with battery storage. A solar inverter and battery-based inverter come together to make one piece of equipment to ensure an uninterrupted supply of power. With a hybrid solar inverter, users incorporate storage without the need for separate batteries.

The benefit of a hybrid inverter is that back-up power is available, thanks to the built-in battery – which is also a reason why these units tend to be expensive.

What are the types of solar inverters

There are three main types of solar inverters:

Solar power string inverter

Application: commercial and residential

solar inverters working diagram

A string inverter functions in a series circuit. The panels are installed in rows. So if there are 12 panels total, they might be installed three across in four rows. This is called a "series string," or as some people call it, a multi-string solar inverter.

Each string carries the DC power generated by the solar panels to the string inverter. The inverter converts the DC to usable AC power. Depending on the size of the installation, multiple string inverters might be required.

As the panels are all wired in a series, what happens to one happens to them all. If one panel is shaded, its sun exposure is limited, weakening not only that one panel’s output, but all of the panels. Another point: if the customer wants to add additional panels at some point, a new inverter will have to be added.

Power optimizers

To combat this problem, string inverters can be paired with power optimizers. These devices are installed at the module level. Each panel has one. They’re also available already integrated into the panels. The advantage of power optimizers is that they mitigate the impact of shading. They achieve a high-energy harvest before sending the DC to the inverter.

Solar panel microinverter

Application: commercial and residential

solar panel micro inverter

Microinverters are similar to power optimizers, as these are module-level electronics. One is placed on each panel, though there are some that can handle two or four. Power optimizers don’t convert DC to AC, but microinverters do. Conversion takes place at the panels, so if one panel is shaded, it doesn’t affect the other panels’ performance.

As microinverters are installed at the module level, they can also monitor the performance of each individual panel. In comparison, string inverters can only show how each string is performing, which is one reason why microinverters cost more. Installing solar panels with microinverters is also more time consuming than setting up string inverters, which adds to the cost.

Central inverters

Application: Industrial – typically used on solar farms

This solar power inverter installation will require a mounting pad. Central inverters are similar to string inverters. They’re larger, mounting on the ground or floor, and able to support far more strings of panels. Instead of the strings connecting directly to an inverter, they connect to a combiner box. The combiner box carries the DC power to the central inverter, which converts to AC.

They can range in power and are rated for either indoor or outdoor use. Architecture varies in structures this large, but the simplest consists of a single DC-AC conversion stage. You’ll find that some inverters have a DC-DC boost stage to increase the maximum power point (MPP) voltage range. To boost the AC voltage and provide isolation, sometimes, a low-frequency transformer is provided at the output. The disadvantage to this is that it reduces the efficiency and increases the size, weight and cost of the inverter. To get around this, inverters without transformer inverters with a front-end boost stage can be used.

Inverters in solar panel systems: at a glance






-Solar panels are installed in rows, each on a string

-Module-level electronics so one is installed on each pane

-Microinverters are the smallest inverters and slowly gaining popularity and market share

-Similar to string inverters but much larger and can support more strings of panels

-This type of inverter is the largest in terms of capacity


-Suitable for installations without shading issues –can be paired with power optimizers to mitigate these effects

-Available in 3 types: on-grid, off-grid and hybrid

-Good for installations with shading issues or with panels on multiple planes facing various directions

-Designed to connect directly to the electric grid. Require fewer component connections, but require a pad and combiner box

Rated power

-Range from 1kW to 100kW

-Usually range from 250W to 1kW

-Can range from 100kW to a few megawatts

Maximum input voltage –refers to the maximum DC voltage that the inverter can withstand on its input side; dictates maximum voltage that PV array can have


N/a: manufacturers of microinverters specify the ratings of PV modules that their microinverters are compatible with

-Usually 1,000V, though some are 1500V

Maximum Power Point Tracking (MPPT)

-Typically 2-3 MPP inputs that accommodate 2-3 PV module strings

-Best MPPT capability, as each PV module is connected to its own MPP input

-Least amount of MPP inputs and are the most inefficient in terms of optimizing the power production of PV modules. However, this is usually not a problem since central inverters are usually used where the PV module’s tilt and orientation are uniform


-Less expensive than systems with microinverters

-Efficient, but often cost more than string inverters

-Installation can be cheap and easy as microinverters are often already integrated into the panel

-Inexpensive in terms of per kilowatt cost


-Less reliable due to single point of failure

-Highly reliable as no single point of failure

-Often placed in protective environments, though still open to single point of failure

Typically used

-Great for residential and commercial applications

-Can also be a popular alternative to central inverters in small utility installations smaller than 1 MW

-Popular choice for residential and commercial installations

-As technology improves slowly being used for commercial and even utility-scale applications

-Perfect for large installations with consistent production across the array

-Utility-scale systems such as solar farms

What is a solar inverter monitoring system?

Monitoring systems operate through the inverter. As already mentioned, microinverters monitor the performance of each solar panel. Nowadays, most solar inverter manufacturers and distributors offer a monitoring software setup that works on the cloud, and it’s an attractive feature for customers. When the solar inverter system converts DC to AC, they’re given information about power levels and the amount of power produced. They can access these details on apps and other smart devices. Monitoring systems also provide diagnostic information, which helps manufacturers identify and fix any issues.

Download free CADs and try before you buy

Download free CADs and request free samples, which are available for most of our solutions. It’s a great way to ensure you’ve chosen exactly what you need. If you’re not quite sure which product will work best for inverters for solar panel systems, don’t worry. Our experts are always happy to advise you. Whatever your requirements, you can depend on fast despatch.

You can also learn more from our Quick guide: components for your solar PV system.

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Email us at sales@essentracomponents.com or speak to one of our experts for further information on the ideal solution for your application 800-847-0486.