A solar system is said to be grid-tied when the output of the system's inverter connects directly to your utility service, as illustrated below.
The house wiring does not know what source of power it is using. The power can come from the solar panel array if there is sufficient energy being generated to meet the building’s needs, or from your utility’s grid, or from a combination of both. All of this is handled automatically and transparently by the grid-tied inverter.
The grid-tied inverter design makes this transparency possible. Before the inverter can turn on and produce power, it must sense the presence of power from the grid. The inverter must match the frequency and phase of the grid signal before it can turn on its output. With a grid-tied solar system, your solar panel output matches your utility power precisely.
The illustration above shows a “string inverter.” This inverter requires a “string” of panels to be connected in series and wired to its input. The electrical characteristics of the string must be carefully matched to the inverter or the system efficiency will suffer. A well-matched string system is the most cost-effective system in terms of cost per watt. A typical string includes 12-14 panels.
One important limitation of the grid-tied solar system is that if the utility power grid goes down for any reason (storm damage, power outage, etc.) the grid-tied inverter must shut off. If your goal is to offset your conventional energy usage, the grid-tied system is completely appropriate and the most cost-effective option. If your goal is to have a source of energy in the event of a power outage, you should consider a battery back-up system.