What are Grid Tie Systems? This is a small solar energy or photovoltaic (PV) system that acquires alternate(back-up) electricity from a the utility when the PV system is not producing enough electricity. And when the system generates too much electricity, the utility is obligated to purchase the excess energy via a net metering and/or rate arrangement.
How do these systems work?
A solar electric system produces electricity and is interconnected to the utility's distribution system is called a "grid tie" system. Usually, grid tie systems are a series of photovoltaic (PV) panels that convert the sun's energy into electricity. This electricity is in the form of direct current.
The direct current is then sent to an inverter that changes the electricity into alternating current that is used by the various electric loads found within the home. This alternating current can also be sent into the utility's distribution system where the home owner can either receive a credit on his electric bill or receive a payment for excess energy generated that is sent into the utility's grid system.
Net metering is perhaps the best arrangement for the utility customer. Under this arrangement, the power provider (utility) essentially pays you the retail price for the electricity you put back into the utility's distribution grid. Some utilities may pay the wholesale price in under these arrangements. The wholesale price is less than the retail price.
A net-metering arrangement provides a benefit to the utility customer. Through this type arrangement, the utility uses a single bi-directional meter to measure energy taken from or sent into it's distribution system.
This meter measures the amount of energy the customer takes from the utility or feeds into the utility's grid system by either spinning forward or backwards. Then the meter spins forward, the customer is taking electricity from the utility. When it spins backwards, it means the extra electric energy from the solar panels is being fed into the utility's distribution system.
Then when the electric utility reads the electric meter, it will determine if the solar system produced more energy than the customer used or if the customer used more energy than the solar system produced. In the event the system produced excess energy, the customer will either be give a credit on his bill or receive a payment for the excess electricity generated. If the customer used more energy than what the solar system produced, the customer will only pay the for the amount of electricity obtained from the utility.
The Public Utility Regulatory Policy Act of 1978 (PURPA) requires electric utilities to purchase excess power from these small renewable energy systems at a rate equal to what it costs the utility to produce the power itself. Electric utilities generally achieve this requirement through some net-metering arrangements.