Solar Panel Inverters Explained June 2023

While solar panels play an important role in a home solar system, other components are also needed to produce clean energy — including solar inverters. A solar inverter is an electronic device that converts the energy generated by your solar panels to electricity that can power your home appliances, electronic chargers and lights.

In this article, we at the Guides Home Team will discuss what a solar inverter does, the different types and the best inverters for solar systems. Our information is based on an analysis of the best solar companies, discussions with industry experts and market research into the top solar products.

A solar inverter converts direct electrical current (DC) generated by your solar panels into alternating electrical current (AC) needed to run your home appliances. The inverter also synchronizes with your local electrical grid, which uses AC voltage, allowing you to use both power sources simultaneously.

Home appliances are designed to use AC voltage from the local grid and cannot run on solar energy directly. But since solar inverters are DC-to-AC power conversion devices, you can solve this problem by installing an inverter between your solar panel array and your electrical wiring system.

When exposed to sunlight, solar photovoltaic (PV) cells generate DC electricity like a battery. Solar panels have an array of PV cells wired together, which determines the voltage and power output of each individual panel. Most cells produce around 0.46 volts (V) of electricity, meaning a 60-cell solar panel can generally output around 30 V and 300 watts of direct current electricity.

An inverter converts the DC output of solar panels into AC electricity of the same frequency as the local grid to synchronize both power sources. Here's a quick breakdown of how this system works:

You can classify solar power inverters into three main types:

As a general note, hybrid inverters can handle solar panels and batteries simultaneously. Traditional inverters, like string and microinverters, are not hybrid and are meant only for photovoltaic panels. You would need a separate inverter to add battery storage.

We outline each type of inverter, including pros and cons, in the following sections.

String inverters are the most common type of inverters for a home solar array. This setup wires your solar panels together in "strings" or series circuits that connect to a central inverter. The inverter, which connects to your home wiring, converts the combined output of your panels into AC power.

String inverters have a lower installation cost since it only requires one device to convert the electricity output of all your solar panels into AC power. In other words, you do not need to install a power conversion device on each panel. Since string inverters are so popular, you can find more vendors and solar installers familiar with this equipment.

The main disadvantage of using a string inverter is having to wire your solar panels together in a series of circuits. So if a single panel malfunctions or becomes obstructed, all the panels in that string suffer a drop in performance — even if the remaining panels are under full sunlight and in working condition.

Solar panels in a string circuit can also suffer from performance loss if they have different energy production profiles. This generally happens when panels are facing in different directions and exposed to uneven sunlight.

A microinverter system involves small inverters you can install directly on each solar panel. There is no need for a string inverter since the output of each panel is converted into AC power directly.

The main advantage of microinverters is having a dedicated power conversion device for each solar module. If any of your panels become shaded or malfunction, the rest of your solar panel system is not affected. As a result, microinverters increase the overall energy output of your solar system. You can also take advantage of roof areas with different orientations since your PV array is not affected by uneven sunshine — unlike solar panels that utilize a string inverter.

Microinverters also have longer warranties than string inverters. Generally, you can expect a 10 to 12-year service lifespan with a string inverter, but you can find microinverters with up to 25-year warranties.

One of the main drawbacks of microinverters is the higher price — if you plan to install a solar system with 20 panels, you also need 20 microinverters. Since installers place microinverters behind solar panels, they are harder to access for maintenance and replacements.

Microinverters can reduce your solar battery options if you’re considering energy storage. Keep in mind that you charge batteries with DC power, while microinverters convert the output of solar panels directly into AC power. This means you need a dedicated battery inverter and a device called a charge controller to manage a battery's charging and discharging process.

Some string inverters use power optimizers installed directly on each solar panel (like microinverters). Optimizers regulate the voltage and current of each PV module, which increases total electricity output.

Unlike a microinverter, an optimizer does not directly convert DC power into AC power. As previously described, string inverters wire panels in a DC series circuit and convert the combined energy output into alternating current.

An inverter with power optimizers combines certain advantages of microinverters and string inverters. When using a traditional inverter without optimizers, any issue that affects one panel negatively impacts the entire circuit. Power optimizers mitigate this dynamic by controlling the power output of each panel individually.

String inverters with power optimizers allow you to install a solar battery without a second inverter. The battery can connect to the DC side of an inverter and charge before the system converts solar electricity into AC power. However, this is only possible if the inverter is compatible with solar batteries.

The best power optimizers have 25-year warranties, so homeowners don't have to worry about replacements for over two decades.

Power optimizers increase the cost of your system because you need one for each panel. Power optimizers also limit your inverter options since they are incompatible with all models.

Although power optimizers have a 25-year warranty, they depend on a string inverter that typically has a 10 to 12-year warranty. You will eventually need an inverter replacement, even if the optimizers still have 15 years of service life left.

A hybrid inverter is simply a string inverter that you can use with both solar panels and batteries. Traditional inverters are only compatible with photovoltaic panels and require a separate battery inverter to add energy storage. Hybrid inverters can operate like standard inverters, but can also manage a battery system's charging and discharging cycles.

The main benefit of using a hybrid inverter is not having to install a second inverter for solar batteries. Hybrid inverters are a great option if you install solar panels and plan to add energy storage in the future. The inverter can operate with or without batteries, so you do not have to install an energy storage system right away.

By using a hybrid inverter to combine solar panels and batteries, you can create a backup power system for electricity outages. However, you must ensure the inverter model can operate off-grid — some models are only designed for grid-tied operation, not power outages.

Since hybrid inverters have a built-in charge controller for battery systems, they are higher in price than traditional string inverters. While hybrid inverters offer the flexibility to add energy storage in the future, not all inverters are compatible with all battery models. For example, you can only use the Tesla Powerwall with a dedicated Tesla inverter, not a hybrid inverter from another manufacturer. However, some Enphase batteries can use third-party inverters.

Each type of inverter has advantages and disadvantages, and the best option depends on the solar project. Most solar installation companies are familiar with all inverter types and can help you choose the ideal option for your solar array. For example:

The cost of a solar inverter can vary depending on the brand, installer and size. According to Palmetto Solar, most string inverters cost between $1,000 to $2,000 or more. A microinverter can add $1,000 or more to that price, whereas power optimizers range between $50 to $200 or more. Hybrid inverters are a bit more expensive, with prices ranging from $1,000 to $3,000 or more based on our market research.

However, the price you pay for an inverter as part of a solar system may vary compared to purchasing a solar inverter separately. And since inverters are necessary for solar power systems, you can claim the 30% solar federal tax credit.

String inverters are the most common type of inverter. They are also the most affordable since you only need to install one central inverter rather than individual units on each panel.

A charge controller regulates the voltage and current delivered to solar batteries to ensure the charging process does not cause damage. An inverter converts DC power generated by solar panels and batteries to the AC power required to power home appliances. Hybrid inverters have a built-in charge controller, which makes them compatible with batteries.

It depends on the type of inverter you install. You can install a microinverter on each solar panel or wire the panels together and connect them to a string inverter. In the case of a string inverter, you only need one central unit versus multiple microinverters.

Leonardo David is an electromechanical engineer, MBA, energy consultant and technical writer. His energy-efficiency and solar consulting experience covers sectors including banking, textile manufacturing, plastics processing, pharmaceutics, education, food processing, real estate and retail. He has also been writing articles about energy and engineering topics since 2015.

Tori Addison is an editor who has worked in the digital marketing industry for over five years. Her experience includes communications and marketing work in the nonprofit, governmental and academic sectors. A journalist by trade, she started her career covering politics and news in New York's Hudson Valley. Her work included coverage of local and state budgets, federal financial regulations and health care legislation.