The three main types of solar power systems are:

1. On-grid - also known as a grid-tie solar system

2. Off-grid - also known as a stand-alone power system 

3. Hybrid - Solar system with battery storage with grid-connection 

Solar system components and how they work:

Solar panels:

Solar panels or solar modules are installed together in what is known as a solar array. Modern solar panels are made up of many solar cells or Photovoltaic (PV) cells which generate direct current (DC) electricity from sunlight or energy from the sun.  Note: It is light energy or irradiance, not heat, which produces electricity in photovoltaic cells.

Solar inverter:

Solar panels generate DC electricity which needs to be converted to alternating current (AC) electricity for use in our homes and businesses. This is the role of the inverter. The DC current from the solar array solar inverter which converts the DC to AC. In a micro inverter system, each panel, or every two panels, has it’s own micro inverter attached to the back side of the panel. The panel still produces DC, but is converted to AC on the roof, and is fed straight to the electrical distribution board

Distribution Board:

AC electricity is sent to the distribution board where it is directed to the various circuits and appliances in your house that are using electricity at the time. Any excess electricity can be sent to either a battery storage system if you have one in a off-grid or hybrid system, or to the electricity grid if you have an on-grid system. 

Solar Batteries:

In an off-grid or hydrid solar system the electricity is stored in batteries which store the energy until it is required, these batteries can be lead acid, AGM, gel or Lithium. 

On-Grid System

These systems are connected to the public electricity grid and do not require battery storage. Any solar power that you generate from an on-grid system during the day(which is not used directly in your home) is exported onto the electricity grid and you usually get paid a feed-in-tariff (FiT) for the energy that you export. At night you would use grid electricity.

Unlike hybrid systems, grid-tie solar systems are not able to function or generate electricity during a blackout or power outage due to safety reasons; since blackouts usually occur when the electricity grid is damaged. If the solar inverter was still feeding electricity into a damaged grid it would risk the safety of the people repairing the fault/s in the network. However most hybrid solar systems with battery storage are able to automatically isolate from the grid (known as islanding) and continue to operate during a blackout.

Off-Grid System

An off-grid system is not connected to the electricity grid and therefore requires battery storage. An off-grid solar system must be designed appropriately so that it will generate enough power throughout the year and have enough battery capacity to meet the home’s requirements, even in the depths of winter when there is less sunlight. The high cost of batteries and inverters means off-grid systems are much more expensive than on-grid systems. 

• The battery bank. In an off-grid system there is no public electricity grid. Once solar power is used by the appliances in your property, any excess power will be sent to your battery bank. Once the battery bank is full it will stop receiving power from the solar system. When your solar system is not working (night time or cloudy days), your appliances will draw power from the batteries.
• Backup Generator. For times of the year when the batteries are low on charge and the weather is very cloudy you will generally need a backup power source, such as a backup generator or gen-set. 

Hybrid System

Due to the decreasing cost of battery storage, systems that are already connected to the electricity grid can start taking advantage of battery storage as well. This means being able to store solar energy that is generated during the day and using it at night. When the stored energy is depleted, the grid is there as a back up, allowing consumers to have the best of both worlds. Hybrid systems also have the advantage of powering your loads during load shedding.

There are also different ways to design hybrid systems 

• The battery bank. In hybrid system once solar power is used by the appliances in your property, any excess power will be sent to your battery bank. Once the battery bank is full, it will stop receiving power from the solar system. 
• The meter and electricity grid. Depending on how your hybrid system is set up and whether your utility allows it, once your batteries are fully charged excess solar power not required by your appliances can be exported to the grid via your meter. When your solar system is not in use, and if you have drained the usable power in your batteries your appliances will then start drawing power from the grid.