What is a Solar Inverter and How Does it Work? - Fallon Solutions

Understanding Solar Systems:

With the increased interest in renewable energy sources across the globe, the interest in solar systems has also shot up at amazing rates. The ability of the sun to power an entire home is a huge environmental plus (think of all the electricity saved!) and is a great use of a resource that we have many hours of each and every week.

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But, when it comes to solar systems, do you actually know what they are made up of and how they work? Solar systems consist of solar panels, (or photovoltaic (PV) panels), a solar inverter (super important) and a rack to keep everything in place. They may also contain a battery, depending on the system and an electric meter, and the amount and type of panels for each system will depend on the energy output needed. Considering how important and beneficial solar systems are, we thought we would put together a little information regarding solar inverters, how they work and what to look for in a good solar inverter, given their importance.

How Does a Solar Inverter Work?

A solar inverter works by taking in the variable direct current, or ‘DC’ output, from your solar panels and transforming it into alternating 120V/240V current, or ‘AC’ output. The appliances in your home run on AC, not DC, which is why the solar inverter must change the DC output that is collected by your solar panels.

To be a little more technical, the sun shines down on your solar panels (or photovoltaic (PV) cells), which are made of semiconductor layers of crystalline silicon or gallium arsenide. These layers are a combo of both positive and negative layers, which are connected by a junction. When the sun shines, the semiconductor layers absorb the light and send the energy to the PV cell. This energy runs around and bumps electrons lose, and they move between the positive and negative layers, producing an electric current known as direct current (DC). Once this energy is produced, it is either stored in a battery for later use or sent directly to an inverter (this depends on the type of system you have).

When the energy gets sent to the inverter, it is in DC format but your home requires AC. The inverter grabs the energy and runs it through a transformer, which then spits out an AC output. The inverter, in essence, ‘tricks’ the transformer into thinking that the DC is actually AC, by forcing it to act in a way like AC – the inverter runs the DC through two or more transistors that turn on and off super fast and feed two varying sides of the transformer.

Types of Solar Inverters

Now you know what a solar inverter is and how it works, it’s time to look at the different types of inverters. There are 5 different kinds of solar inverters, all with varying benefits :

• Battery Inverters

A battery inverter is the best option if you are needing to retrospectively fit a battery into your solar system, or are wanting to keep your battery separate from your solar panels and run through a different inverter. A battery inverter converts your battery power into 230V AC and feeds it into your switchboard (instead of grid power) wherever possible.

• Central Inverters

A central inverter is huge and is used for systems requiring hundreds of kilowatts (or even sometimes megawatts) of volume. They aren’t for residential use and resemble a large metal cabinet, with each ‘cabinet’ being able to handle around 500kW of power. They are generally used commercially for large-scale installations, or for utility-scale solar farms.

• Hybrid Inverters

Hybrid inverters, otherwise known as ‘multi-mode inverters’, are pretty uncommon in Australia and allow you to connect batteries to your solar system. It engages with the connected batteries through ‘DC coupling’ (when both the solar and batteries use one inverter and the DC from the solar panels charges the batteries via a DC charger) and its electronics organise the charging and discharging of the battery.

• Microinverters

As their name suggests, microinverters are super small (the size of a book!) and the ratio of solar panels to microinverters is 1:1. The benefit of a microinverter, among others, is that they optimise each solar panel individually, which offers more energy (especially in shady conditions).

• String inverters

Last but not least, there are string inverters. String inverters are the most common inverter option for residential use, and there is usually 1 string inverter per solar installation. They are known as ‘string inverters’ due to the fact that a string of solar panels is connected to them.

Solar inverter key points:

• Solar inverters are required components in a solar energy array that enable you to use energy created in solar panels to power your home. 

• Different types of solar inverters vary in terms of function, cost, and compatibility.

• Many contemporary solar inverters offer advanced safety and performance-monitoring features.

While it’s the solar panels that convert sunlight into electricity, you wouldn’t be able to use that energy without a solar inverter. That means that your inverter is just as important to your solar technology system as the panels themselves.

We created this guide to solar inverters to help you understand what solar inverters do, how they work, and the differences between types of inverters. You’ll also learn how some solar inverters can help you maximize the performance of your solar array.

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What is a solar inverter?

A solar inverter is a device in a home solar power system that converts DC electricity from solar panels into AC power for home use. It enables grid compatibility, battery storage, and efficient energy management through MPPT technology (more on that below).

How does a solar inverter work?

When DC energy is created in the solar panels, it is transferred to the solar inverter. The inverter uses a series of transistors to switch the flow of electricity from its DC state into AC energy. Once the transformation has completed, the now-AC power is ready to be used or stored in a solar battery.

What are the types of solar power inverters?

There are several types of solar inverters used in renewable energy systems: string, micro, hybrid, and central. Much like the panels themselves, they have key differences that make them more useful in some applications than others. In this section, we compare the most prominent types of inverters.

String inverters

The name string inverter refers to their design, which connects multiple panels to one inverter. This makes them a cost-effective inverter solution, since they require less hardware to run the system. 

With older string inverter technology, partial shading could cause the whole string to produce less output. However, modern string inverters are much better at still producing as much energy as possible with partial shade.

Microinverters 

Another type of solar inverter is the microinverter. These are individual inverters attached to each solar panel. This enables them to optimize the energy output of each panel independent of other panels in the system. As a result, microinverters offer better performance in solar arrays with complex layouts or those that are prone to shading.

Hybrid solar inverters

Grid-tied systems that also employ batteries to store energy require specialized hybrid inverters. These hybrid solar inverters do the job of transforming DC energy to AC power and managing the flow of energy into the battery pack. This allows the batteries to store energy for use when grid energy or direct solar energy is unavailable.

Central inverters

Large-scale installations like solar farms tend to use what are known as central inverters. As the name suggests, these inverters serve as a centralized transformer for lots of interconnected panels. 

You can think of them as even larger string inverters. While they don’t maximize the efficiency of individual panels, central inverters make for an extremely cost-effective solution in large applications.

How does maximum power point tracking optimize energy?

MPPT (Maximum Power Point Tracking) adjusts voltage and current to match optimal solar output. It also:

• Boosts solar panel inverter efficiency in variable light or temperature conditions.

• Enhances PV system efficiency by up to 30% over traditional PWM.

• Ensures consistent DC to AC conversion even during shading or cloud cover.

• Works with hybrid inverters and solar charge controllers for smart energy management.

Recent developments in solar technology have brought MPPT controllers to the forefront. Traditional pulse width modulation (PWM) technology extracts energy at a consistent voltage, which may or may not be the most efficient voltage for the sunlight intensity and panel temperature at a given time. This can result in decreased solar panel efficiency during cloudy periods or when panels are shaded. 

MPPT technology uses sensors and algorithms to determine the optimal voltage and current combination for the specific conditions at that moment. As a result, the system can maintain its efficiency even as conditions change throughout the day.

The difference can be huge. Research has shown that MPPT-enabled systems can be up to 30% more efficient than PWM-based systems. 

How do solar panel inverters support the grid?

A grid-tied solar inverter makes sure your solar power system works seamlessly with the public grid by matching voltage, frequency, and phase. It acts as a safety buffer between solar panels, your home's wiring, and utility infrastructure.

By enabling net metering and solar energy export, these photovoltaic inverters help offset energy costs while complying with local standards like 120V/240V at 60Hz. Advanced smart inverters improve grid compatibility, voltage regulation, and load balancing. The end result is an efficient solar installation and long-term clean energy integration.

How inverters keep your solar energy system safe

Solar inverters support safety by preventing backfeed during outages with anti-islanding protection, shutting down automatically in grid failures, and regulating voltage.

If you are looking for more details, kindly visit solar inverter manufacturer.

By regulating energy flow, inverters can prevent potentially hazardous situations. Many solar inverters are outfitted with an anti-islanding feature. This stops the inverter from feeding power back to the grid during outages, which could damage transformers and other infrastructure.

Also, many inverters are programmed to shut off instantly in outages and other disturbances. This helps prevent potential electrocution hazards for utility employees working on nearby infrastructure that could be caused by energy flowing back to the grid.

Can you monitor photovoltaic inverter performance?

Yes, most PV inverters include built-in monitoring systems that let you track system performance in real time. You can:

• Monitor voltage, output wattage, current, and overall efficiency.

• Access data via mobile apps, web dashboards, or smart home integrations.

• Detect errors early to streamline inverter repairs.

• Improve solar system maintenance with performance trend analysis.

• Verify solar backup system readiness and PV system efficiency.

Most modern solar inverters include technology that allows you to observe the performance of your system. Onboard monitoring and data logging features can track metrics like output power, voltage, current, and system efficiency. They can also detect and report errors in the system, similar to the OBD-II scanner in your vehicle.

Many of these systems now include wired or wireless connectivity technology that makes it easy to see and keep track of system diagnostics and statistics. With these systems, homeowners and technicians can easily monitor the performance of the system through mobile apps or web portals. Some systems can even integrate with larger smart home systems.

These capabilities can make it easier to repair your system and maximize its performance. By noticing patterns in efficiency, you can use the feedback to make adjustments that optimize energy output, potentially allowing for even greater energy savings.

How do you choose an inverter?

Keep these tips in mind if you’re in the process of choosing an inverter for your system.

Matching the inverter capacity to the panel kWp rating

For the best performance, your solar inverter’s capacity (in kilowatts, kW) should closely align with your solar panel system’s peak capacity (in kilowatt-peak, kWp).

• An inverter typically ranges from 0.8 to 1.2 times the total panel kWp.

• Undersizing (e.g., 0.9 inverter-to-panel ratio) can improve performance in low light but may cap output on very sunny days.

• Oversizing may be needed if you plan to expand your system or use battery storage.

• Grid regulations and inverter efficiency ratings (like 97–99%) also affect sizing decisions.

Always consider local solar irradiance, panel orientation, and system load profile to calculate the best inverter capacity sizing for your setup.

Bottom line on how solar inverters work

Simply put, your solar energy system can’t work without a solar inverter. Solar inverters convert DC energy created in the panels to AC energy that you can use in your home. Without one, there would be no way to power your lights and appliances with the energy made by the panels.

While the primary job of a solar inverter is transforming captured energy into electricity you can use, advances in technology have increased their functionality. Many inverters you’ll find today can also provide you with diagnostics you can use to help ensure a safe system and get the most out of your solar energy investment.

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Learn more about solar from PowerOutage.us

At PowerOutage.us, we monitor real-time power disruptions for over 150 million U.S. customers using data from 900+ utilities. Trusted by news outlets and emergency agencies since , we create educational content to help homeowners understand technologies like solar energy that improve power resilience and independence.

This article is part of our expert series on solar panel technology, which also includes:

• What are solar panels made of?

• Solar panel types

• How solar racking works

You might also find these in-depth solar guides useful

• Home solar panel guide

• How solar panels work

• Are solar panels worth it?

• Solar panel cost

Taking your time to research is important, because solar panels aren’t always best for every situation.

FAQ about solar inverters

Below are a few frequently asked questions about solar inverters:

What does a solar inverter do?

A solar inverter converts DC energy created by the solar panels into AC energy that can be used to power your home. Many inverters have additional features, such as energy management tools and performance monitoring.

How do solar inverters synchronize with the grid?

Solar inverters synchronize with the grid by ensuring the energy you export matches the standards of the grid energy. This allows for safe integration between your solar setup and the public grid.

What is the biggest disadvantage of using a central inverter on a solar array?

The biggest disadvantage of using a central inverter on a solar array is that the performance of the system as a whole is dependent on each individual panel. In other words, one panel performing poorly due to shading or poor wiring can substantially reduce the efficiency of the entire system.

How does an inverter work when there is no electricity?

When there is no electricity from the grid or sunlight, a solar inverter with battery storage converts stored DC to AC for home use. In grid-tied systems without batteries, the inverter shuts down, and power is unavailable during outages.

For more information, please visit residential inverter.