What Does a Solar Inverter Do?: Types, Benefits, Costs, and How ...

Author: Clarissa

Jul. 14, 2025

Energy

What Does a Solar Inverter Do?: Types, Benefits, Costs, and How ...

Solar panels generate electricity. Your TV uses electricity. It’s not quite as simple as running a wire from one to the other. Without a solar inverter, your TV couldn’t use the solar energy from your home solar panels. An inverter must change the direct current electricity to alternating current electricity. 

With competitive price and timely delivery, Senergy sincerely hope to be your supplier and partner.

What else do you need to know about solar inverters? We could go back in scientific and American history to Thomas Edison and Nikola Tesla. More practically though, what do inverters do for watching football, cooking dinner, safety, and making clean, efficient energy possible?

How a Solar Inverter Works

A solar power inverter’s primary purpose is to transform the direct current (DC) electricity generated by solar panels into usable alternating current (AC) electricity for your home. Because of this, you can also think of a solar inverter as a solar “converter.”

Once transformed to AC, solar electricity can power most household electronics and appliances. In the US, the power grid also uses AC, which means your post-inverter solar electricity can be sold to the grid and shared with others.

How a grid-tied solar inverter works

When a solar-powered system is connected to the grid, the inverter is the middleman between your home and the utility power lines. A grid-tied inverter allows your home to have uninterrupted power, no matter how much electricity your solar panels generate throughout the day.

When your solar power system is producing more electricity than your home is consuming, your solar inverter can transmit that excess power into the energy grid. Likewise, if your panels are producing some electricity, but not enough to run your entire home, you can utilize a mix of solar and grid power.

At night, when solar panels produce no electricity, your home may need to consume 100% of its power from the grid unless your system includes integrated energy storage. With solar batteries, your inverter can draw stored solar energy from your backup reserve at night or during an outage.

No matter if your home is running on grid power or the sun’s energy, your solar inverter can seamlessly switch between power sources to keep the lights on and systems running throughout your property.

Converting DC electricity into AC electricity

For those who want to know precisely how solar inverters work, here are the key principles to understand.

  • Direct current electricity involves the flow of energy in a single direction. Conversely, alternating current electricity can change (or alternate) direction.
  • When the sun’s rays hit photovoltaic (PV) panels, they trigger a one-directional movement of electrons into solar cells, generating DC electricity.
  • The current then travels through the system’s wiring into a solar inverter. Here, the inverter rapidly switches the direction of the current back and forth, transforming it into AC.

The Benefits of a High-Quality Solar Inverter

While your solar inverter allows you to use the electricity your solar panels generate, it is also capable of many other essential tasks. A solar inverter can help maximize your energy production, monitor your system’s output, communicate with the utility grid, and detect faults that might otherwise cause damage or personal harm.

Maximizing energy production

Solar inverters can track your panel array’s voltage and maximize the ongoing efficiency of your renewable solar energy system. Today’s premium inverters for homes are very efficient, and can typically transform DC solar power into AC electricity at efficiency ratings up to 97%.

At the electrical level, high-quality grid-tied solar inverters output a pure sine wave, which is a measure of how smoothly the direction of the current can change. On the other hand,  low-cost inverters generate a modified sine wave, which can be used to power non-delicate devices without a variable speed motor. Almost always, a pure sine wave inverter is recommended for home solar energy systems.

Monitoring system output

It's exciting to see your solar panels generate thousands of watt-hours on a sunny afternoon, so naturally, most people want to monitor their renewable energy system’s performance. Today, most solar energy system monitoring is done by the inverter.

With a modern solar inverter, you can typically view how much energy your solar panels are producing at any time through a mobile app or website. In the Palmetto App, users can see precise reports of solar watt-hour production alongside energy bill savings.

If things aren’t working as they should in your solar energy system, many inverters operate ongoing system performance checks to alert you of issues. You can also use your solar inverter’s performance tracking to periodically verify all components are working and generating the amount of electricity expected.

Communicating with the utility grid

If you have a full solar battery bank, or your household cannot use all the electricity being generated by your panels, your inverter can seamlessly feed this surplus power into the energy grid. If you live in an area with net metering, this can earn you credits that reduce your energy bill.

During a power outage, some solar inverters can separate your home from the grid, keeping the lights on at home while protecting line repair workers from the electricity your solar panels are producing.

Fault detection and automatic shut-off

When not properly maintained, aging electrical wiring and solar equipment can create potential electrical hazards, like ground faults or arcs. If such an event occurs, the solar inverter will quickly detect the issue and shut down, protecting the rest of the system and alerting you to the need for service before any additional damage occurs.

Inverters are a key feature of a safely operating solar panel system. Correct installation by a professional is a key first step to ensuring a long, safe, and productive life for your system.

Comparing Different Types of Solar Inverters

The type of solar inverter you get installed at your house will be determined by several factors.

  • The shape and complexity of your roof
  • The extent and frequency of shade on your property
  • The brands your installer has partnered with

To guide your solar design decisions, the four key solar power inverter technologies to know are string inverters, microinverters, power optimizers, and hybrid inverters.

String inverters

Also called a central inverter, string inverters are most suitable for simple solar power system designs. The technology gets its name from arrays (or groups) of solar panels connected by 'strings' of wiring. From each string of solar panels, the DC electricity is then fed into one central inverter, where it is converted into AC power all at once.

Pros: String inverters have a few things going for them.

  • Easy to install (typically at ground level)
  • Most affordable
  • Durable

Cons: Here are the main downsides of string inverters.

  • One underperforming panel affects the rest of the string
  • Not a good match for shaded roofs
  • May not be a good match for complex or irregular system designs

Best For: A string inverter may be the best option as a low-cost solution for properties with basic roof layouts and little to no shade on-site.

Microinverters

Unlike string inverters (which are centrally located) microinverters are usually installed beneath or next to each solar panel in a system. So instead of power flowing into a single central inverter, microinverters transform DC electricity at each individual panel.

Pros: Here’s why you should consider a microinverter.

  • Great for complicated system designs
  • Better for roofs with shading
  • Makes expanding your system easier

Cons: Here are the drawbacks.

  • More expensive
  • Harder to access for maintenance

Best for: Overall, microinverters are best for maximum energy output on complicated or shaded rooflines, where neighboring panels may generate varying amounts of electricity.

Power optimizers

Sort of a compromise between string and microinverters, power optimizers help maximize the performance of individual solar panels within a central inverter system. Like microinverters, power optimizers are installed at the panel-level and modify solar electricity before it is sent to a central location.

Pros: Power optimizers bring the benefits of microinverters.

  • Maximize individual solar panel output
  • Better for shading and complex designs
  • Might be cheaper than microinverters

Cons: They have some of the same drawbacks as microinverters, too.

  • More expensive than string inverters
  • May make maintenance and part replacement more difficult

Best For: String inverters with power optimizers are a great alternative to microinverter-based systems where individual panel performance must be considered.

Hybrid inverters

Hybrid inverters are one of the newest additions to the fast-moving world of solar energy technology. A hybrid inverter combines a traditional solar inverter with a battery inverter component, with configurations optimized for every kind of solar energy system.

Pros: Hybrid inverters add capabilities to the basic inverter design.

  • Can convert electricity from AC to DC and from DC to AC
  • Integrates solar, battery, and home in one device
  • Easier to add a battery at a later date
  • Can allow more efficient direct current charging of batteries or electric vehicles

Cons: Hybrid inverters have one main downside.

  • Higher initial cost (though can be a good long-term investment)

Best For: Hybrid inverters are the best option for those considering solar, battery storage, and EV charging as parts of a whole, comprehensive home energy system.

Measuring Solar Inverter Efficiency

During a solar inverter's DC to AC electricity conversion, some energy is lost in the form of heat. The less energy lost through heat, the greater the inverter’s efficiency.

Solar conversion efficiencies vary by brand, but most quality home inverters have a maximum efficiency of 97% to 99%, so energy loss is relatively minor. While operating in real-world conditions, however, shading, weather, and your other solar equipment will have an impact on your system’s overall energy production efficiency.

Solar Inverter Sizing

Inverter manufacturers always specify the input energy their products can process and their maximum power output. For instance, a string inverter may be able to handle a maximum input energy of 4,000 watts from solar panels, and output 3,000 watts.

In the real world, however, you will rarely achieve your inverter's nameplate power rating, which is measured at Standard Test Conditions, or STC. Instead, your typical daily activities may end up 10% to 20% below the nameplate power rating. To keep costs down, inverters are often selected with an input power rating lower than your solar panel array’s maximum output.

Inverter clipping explained

Solar installers will make sure the photovoltaic inverter size matches the capacity of the solar array for optimum power conversion. You may be surprised to learn it’s usually not an exact match. For instance, just because you have 5 kilowatts of solar panels doesn’t mean you will pair them with a 5-kilowatt inverter.

Typically it’s more cost effective to pick an inverter designed to handle slightly less electricity than the maximum amount of power the solar panels can generate. When the panels are generating this extra electricity capacity the inverter can’t handle, it’s called clipping, and the extra electricity is lost to the system.

So while you may throw away this extra electricity, inverter clipping typically occurs only at the height of the afternoon during the most productive days of the year.  Therefore, most installers favor solar inverters designed to handle the average amount of daily power to keep total installation costs low, even if it means losing a little bit of solar electricity generation in peak conditions.

Local Solar Inverter Regulations

In general, local regulations for solar inverters are rarely something you need to worry about as a homeowner. Reputable solar installers will be familiar with the specific rules governing solar energy installations in your area.

Your system size is typically limited by your inverter's size, rather than the number of panels you install. In most cases, your solar inverter’s maximum capacity may be rated to match or slightly exceed your home’s approximate annual electricity demand.

The Environmental Impact of Solar Inverters

Overall, solar inverters do more environmental good than harm. While there’s an environmental cost to manufacturing anything, inverters’ role in unlocking clean, renewable solar power is more than worth it.

Thankfully, the majority of a solar inverter can be recycled, with many materials retaining their value for scrap at the end of a system’s lifetime. Solar inverters should always be handled by a professional, since some may include hazardous materials.

How Much Does a Solar Inverter Cost?

Narrowing down the price of a solar inverter to a single number can be tricky because every system design is different. Your inverter’s size will be determined by your energy consumption and your system design.

Additionally, installers typically buy in bulk and have direct relationships with suppliers, so their costs may be different than what you’d pay online. When looking at your solar system as a whole, inverters will typically make up around 10% of your total project costs.

String inverter prices usually range between $1,000-$2,000 or slightly more. Power optimizers can boost your total costs $50-$200 per panel. You can expect to pay $200-$400 per panel for microinverters.  

How Long Does a Solar Inverter Last?

Most residential string inverters have an expected lifespan and performance warranty of 10-15 years, but can sometimes last up to two decades. However, most string inverters are replaced within the operating lifetime of the solar panels to which they are connected.

Microinverters and power optimizers are newer technologies, so there is less data on their expected lifespans. That said, most manufacturers are confident their products will outlast the 20- and 25-year warranties included with the equipment. Factor possible replacement costs outside of warranty periods into your system design decision-making.

What Solar Inverter Maintenance Is Required?

Solar inverters rarely require maintenance. When something goes wrong, inverters are usually replaced, not repaired.

If your system is working less efficiently than usual or not generating electricity at all, it may be time to contact your solar company to see what maintenance is required. Trying to troubleshoot inverter problems on your own can be dangerous and could invalidate warranties.

What Solar Inverter Is Right for My Home?

If you're looking to invest in a home solar power system and trying to decide what inverter option to utilize, an easy way to get started is with our free solar savings calculator.

In a few easy steps, you will receive an estimate of how much solar can save you. You'll also get connected with a solar expert who can review the different solar options that make sense for your home and help you select the one that's right for your family’s needs.

Frequently Asked Questions

What does a solar inverter do?

A solar inverter turns DC electricity, coming from the panels, into AC electricity, which is the standard electricity used by grids, homes, and most devices in the US.

Can solar panels work without an inverter?

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

Scientifically speaking, yes. Practically speaking, to turn the electricity panels generate into electricity you can use, no.

Are string inverters or microinverters better for home solar?

Microinverters are usually better for home solar systems. Microinverters optimize your system’s efficiency as they work better when some panels are in shade at varying times. More positives include having a longer lifespan than string inverters, being able to add panels easier, being easier to do maintenance on, and getting better energy efficiency will, in the long run, more than make up for the higher initial cost compared to string inverters. A string inverter can work as a lower-cost choice for properties with basic roof layouts and little to no shade.

Solar Inverters: Types, Pros and Cons

What is a solar inverter?

Solar energy doesn’t provide electricity in a format that your table lamp could be powered by. Inverters change the power produced by your solar panels into something you can actually use.

Think of it as a currency exchange for your power. You might have a fistful of yen, but until you stop and exchange it for USD, you can’t pay for lunch stateside.

Your home is wired to conduct alternating current (AC) power. The electricity produced by solar panels is initially a direct current (DC). Inverters change the raw DC power into AC power so your lamp can use it to light up the room.

Inverters are incredibly important pieces of equipment in a rooftop solar system. There are three options available: string inverters, microinverters, and power optimizers.

Did you know? With the “One Big Beautiful Bill” signed into law, the 30% tax credit for residential solar is going away at the end of . Homeowners will need to get their systems installed by December 31, to qualify for this credit before it is gone. Start your project with multiple quotes from trusted local installers today.

See our list of the best inverters of .

Solar Inverter Types, Pros and Cons

String Inverters

String inverters have one centralized inverter — or, keeping with the metaphor — one central currency exchange station.

This is a standard inverter, and it works just fine if you don’t have any encroaching shade from nearby trees or a big chimney. It’s also great if you have all of your solar panels facing the same direction.

String inverters are standard in the industry, and they’re the least expensive.

String inverter pros:

  • Lowest cost
  • Standard inverter
  • Performs well with no shade

String inverter cons:

  • Overall production decreases if one panel is damaged or shaded
  • No ability to monitor each panel individually
  • Not optimal if your solar panels are facing different ways
  • Increasing power needs are more difficult and may require second central inverter installation

Microinverters

Microinverters are small units built into each individual solar panel that convert power. Think of it as having mini currency exchange stations on every nearby street corner.

This gives each panel the ability to function at peak performance, independent from its neighbors. Even if the panel next to it has a tree branch shading it for most of the day, all the other panels can convert at full capacity. Any drop in efficiency only affects one panel.

Microinverters also enable you to monitor the performance of each individual panel. This is helpful for spotting any issues with a single panel so you can have it repaired before it slows down the whole system’s productivity.

This type of inverter can be more expensive than string inverters, but it can pay off over time by getting more power from your system overall.

Microinverters also make it easy to increase power usage if you want to. Say you buy an electric car and you’ll need more power to charge it every night. Adding more solar panels and inverters is easier and less expensive than adding an additional central inverter for a string inverter system.

Read more about string inverters vs microinverters here.

Microinverter pros:

  • Shade from a nearby tree won’t reduce the whole solar panel system power output
  • Individual panel monitoring available
  • Increasing power needs are easier and less expensive than installing a second central inverter
  • Good for rooftops where solar panels may face different directions

Microinverter cons:

  • Higher initial cost
  • Not necessary if all panels face the same way and are not shaded

Power Optimizers

Power optimizers are somewhere in between string inverters and micro-inverters both in how they function and in price.

As with micro-inverters, power optimizers have a component (the “optimizer”) underneath and within each solar panel. But rather than change the DC to AC right there on site, these inverters optimize the current before sending it to one central inverter.

This is more efficient than a string inverter, as any sluggish production from one panel doesn’t slow the whole system, but more cost-efficient than a standard micro-inverter setup.

Imagine being able to cut to the front of the line at the currency exchange office. It’s not quite as quick or convenient as having your own exchange office a few steps from your home, but there’s no waiting around once you get to the central office.

Micro-inverters and power optimizers are gaining popularity and prices are dropping as the technology advances.

We have more details on power optimizers in this post.

Power optimizer pros:

  • More efficient than string inverters
  • Less expensive than micro-inverters
  • Individual panel monitoring available

Power optimizer cons:

  • Higher initial cost
  • Not necessary if all panels face the same way and are not shaded

Ultimately, best inverter for you depends on your roof shape and size, nearby trees, how much energy you need, and your budget.

What to Look for in a Solar Inverter

To recap, there are three kinds of inverters: string inverters, microinverters, and power optimizers.

They all transform the power your solar panels generate from direct current (DC) to alternating current (AC). This makes the energy usable for your home.

Here’s a few things to look for when shopping for inverters…

Solar Inverter Warranties

Most people feel more comfortable purchasing electronic devices with warranties. Solar inverters are no exception. Most inverters have warranties ranging from anywhere between 5 and 10 years, though some can be extended to 25 years.

When you’re looking at a company, make sure you know what’s included in the warranty and what’s not. For example, some power optimizers might not include the central inverter under the warranty.

Also make sure you understand the terms of a warranty. Is the device covered in case of an internal glitch as well as in the case of external damage? Will you be charged for labor or shipping if you have to send parts in? These are all important questions to ask.

Solar Inverter Operating Temperatures

As with most electronic equipment, inverters operate best when they’re running cool. Operating temperature is the safest temperature range an inverter maintains.

Inverters will naturally generate some heat themselves as they do their job. Since they’re typically in an uncontrollable environment outdoors, they’re exposed to a wide range of temperature fluctuations.

Obviously, conditions aren’t always ideal and some times an inverter will have to work harder than others. The higher the operating temperature (the more heat it can handle), the better.

Solar Inverter Efficiency

There are two numbers to look for in solar inverter efficiency: peak efficiency and weighted efficiency.

Peak efficiency will give you the efficiency of your inverter when it’s running optimally. It’s good to know what the best-case scenario is, but it’s also worth noting that it won’t always be hitting that level. Some days it might only reach peak efficiency for an hour or two, or maybe not at all.

Weighted efficiency figures in the variables like DC input levels. This gives a more accurate gauge as sunshine, temperature, and other environmental elements affect inverter efficiency throughout the day.

Solar Inverter Key Terms to Know

Clipping/Scalping

This is the term used to describe the energy output that is lost due to undersizing an inverter.

Any given inverter has a maximum power rating (at the residential level, measured in W or kW). When solar supplies DC power in excess of that inverter’s maximum power rating (what the inverter can handle), the resulting power is “clipped.” Think of it like a 14 foot tall truck trying to go under a 13 foot bridge — a little comes off the top.

It’s important to consider the solar panel arrays’ maximum power output and select an inverter with the correct size, model, and type in order to avoid excessive clipping.

It’s normal for the DC system size to be about 1.2x greater than the inverter system’s max AC power rating. For example, a 12 kW solar PV array paired with a 10 kW inverter is said to have a DC:AC ratio — or “Inverter Load Ratio” — of 1.2.

When you into account real-world, site-specific conditions that affect power output, it may make sense to size the solar array a bit larger than the inverter’s max power rating, as there may be very few “power-limiting days,” or instances of clipping for that system.

Inverter Efficiency

Inverter efficiency is a percentage that tells us how much DC power input to an inverter comes out as usable AC power.

No inverter is 100% efficient, although some come close in favorable conditions. In the conversion from DC to AC, power is lost in the form of heat.

While inverter efficiency is an important factor to consider in the selection process, there are other factors to consider that also affect a project’s economics, such as warranty, price, expected life, serviceability, and monitoring functions.

Maximum Power

Maximum power is the highest amount of power allowed to feed into an inverter, which is a function of the inverter’s specifications or the maximum power a solar panel can produce. This will occur at the optimal trade-off between voltage and current along a given panel’s I-V (current and voltage) curve.

Maximum Power Point (MPP)

A solar system’s maximum power output will vary with conditions, such as how much sunlight it receives, temperature, and other factors. A fixed-tilt, stationary, roof or ground-mounted solar PV system might only produce its maximum rated power during a limited period of the day. Every specific solar cell has its own unique I-V curve, which relates its maximum power output to variations in current (I) and voltage (V).

Maximum Power Point Tracker (MPPT)

A device that periodically tracks characteristics of a given panel, string of panels, or system, and optimizes and varies voltage and amperage accordingly in order to produce maximum power.

Microinverter

A device that converts direct current (DC) produced by a single solar panel into alternating current (AC).

Micro-inverters are commonly connected to and installed at the site of, or behind, each individual solar panel in an array. Most micro-inverter makes are installed in the field, while some come panel-integrated by the manufacturer.

Popular brands of micro-inverters include: Enphase, Chilicon, APS, ABB, SMA, and SunPower.

Optimizer

A DC-DC converter, optimizer, or “panel optimizer,” is a module-level power electronic device that increases the solar system’s energy output by constantly measuring the MPPT of each individual panel.

The panel optimizers relay performance characteristics via a monitoring system to facilitate operations and any necessary maintenance. In essence, optimizers support flexible system designs and arrangements – with multiple panel orientations, tilts, azimuths, and module types in a given string.

Because optimizers are a DC-DC, or DC-coupled, systems using this technology will generally be compatible with DC-coupled energy storage or battery backup solutions, like the Tesla Powerwall.

Perhaps the most advantageous benefit of using a DC optimizer is panel-level MPPT, or max-power point tracking. The result is increased energy harvest from a panel system, especially when subject to periodic or sweeping shade.

Peak Power Point

Another term for Maximum Power Point (MPP).

String Inverter

The device that converts direct current (DC) electricity produced by groups of solar panels (called strings), into usable alternating current (AC) electricity.

String inverters are considered a “mature” solar technology that has proved effective, safe, and reliable. Residential, 240V AC string inverters usually carry manufacturers’ warranties of about 10 years.

When installed to a manufacturer’s specifications, code, and best practices, a string inverter may require service or ultimately replacement during a photovoltaic system’s lifespan.

For more information, please visit commercial inverters.

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