What is a Solar Inverter and How Does it Work?

Although we have harnessed the sun to generate power for more than a few decades, surprisingly few people understand how solar inverters work. Even some solar panel owners don’t understand how their inverters work. Despite this, the inverter is one of the most important parts of a solar power system. So, what are these machines and what do they do?

A solar inverter is the part of a solar display that converts energy produced in photovoltaic cells into usable electricity. It uses the same technology as a transformer to alternate current and feed energy to our homes. Without the right inverter, we would not be able to use solar electricity.

Solar inverters come in a variety of types depending on your electrical needs. Considering that a solar inverter is one of the most important parts of your solar display, you should guarantee that you have the right variety installed. To help out, we have compiled everything you need to know about solar inverters, how they work, and how to find the right inverter for your home or business.

What Does a Solar Inverter Do?

how inverters work diagram
Inverters work by converting DC power from solar panels into AC power for home appliances.

It’s an easy mistake to confuse a solar inverter with a solar panel. Both parts are essential for generating solar power but the inverter and panel are two separate parts with their own responsibilities. The panel is the iconic blue glass plate we often envision when we think of solar power. The inverter is a smaller box often mounted to the side of a building.

When sunlight shines down onto your roof, the photovoltaic cellsOpens in a new tab. inside a solar panel absorb the sun’s energy and transform it into electricity. This works thanks to the semiconducting materials used to produce photovoltaic cells:

  • Crystalline silicon
  • Gallium arsenide
  • Germanium
  • Selenium

Using a unique layering system of semiconductors such as crystalline silicon and gallium, solar panels contain separate regions with positive and negative electrical charges. Photons of light excite the electrons in the semiconductor layers, causing them to flow from negative regions to positive regions and produce electricity along the way.

While this sounds straightforward, the problem with producing electricity this way is that it creates a direct current (DC) and most home appliances run on alternating currentsOpens in a new tab. (AC). For solar electricity to be useable, it first has to pass through an inverter, which changes the current from a direct current to an alternating current. If the current is not passed through an inverter before arriving in our homes, our appliances will not work and could even catch on fire.

Functions of a solar inverter listed

Click into each dropdown below for details on each inverter function.

Converts DC to AC:
  • Converting the Direct Current (DC) that is produced by the Photovoltaic solar panels into usable Alternating Current for homes, factories, offices, and other camping purposes. This appears to be the most important function of the inverter and without it; the energy produced by solar power will be useless for homes, offices, factories, etc. 
Optimizes Power Production:
  • Solar inverters are equally responsible for continuous tracking of the solar generator’s voltage in other to identify the maximum power at which the modules can work. This means that if shading happens from environmental causes or modules are reduced, the inverter can quickly identify the wrong peak in the string, thereafter reducing the overall energy production of the system.  
Reports for Power Production:
  • The inverters make it possible for the owners to keep track of the power usage of their systems. Due to innovations and advances in technology, most inverters now have communication abilities through hardwired Ethernet, Wi-Fi, or Bluetooth.
  • This feature enables solar generator owners to view error codes, diagnostics, and power production information from inverters on their computers or even on dedicated smartphone applications. Owners of large-scale solar arrays might need to additionally spend money on advanced monitoring services to help them identify and fix issues on multi-inverter arrays via a third-party vendor.
Ensures safe operation of the system:
  • Because inverters are made up of so many electronic parts and perform multiple functions, they tend to fail faster than other components of the solar generator. Solar inverters are designed to shut down in the event of an electrical discharge, which can be caused by material degradation and system aging.

How Do Solar Inverters Change Electrical Currents?

Changing DC to AC isn’t exactly easy. To understand how your solar inverter pulls it off, you first need to understand the difference between these two types of current:

  • Direct Current – Electrical current flows around a circuit from the negatively charged side of an electrical source towards the positively charged side of an electrical source. Electricity can only flow in one direction and must flow back around to complete a circuit.
  • Alternating Current – Electrical current pulses backward and forwards from the electrical source dozens of times a second. This works by alternating which side of the electrical source is negatively and positively charged, hence the name “alternating” current.

To put it in perspective, if you tried recreating an alternating current by hand using a battery, you would have to manually flip the battery 3,600 times a minute! Fortunately, an inverter can do all the work for you. By repeatedly switching electrical contacts (imagine the small prongs you attach a battery to), an inverter can take direct currents and manipulate them back and forth into alternating currents.

Picking the Right Inverter for Your Needs

Not all inverters are the same. Some work well with panels installed in shaded areas whereas other inverters work well with panels installed in direct sunlight. Some are designed for large-scale operations and others are fine for a single panel display. The type of inverter you should purchase depends largely on your setup and electrical needs. Here are the five types of inverters and everything you need to know about them.

Micro-Inverters on Every Panel

Pikasola 800W Waterproof IP65 Micro Solar Inverter with 22-50VDC Wide Input Voltage to auto 110VAC for 4 pcs 200w Solar Panels MPPT Grid Tie Inverter
Pikasola 800W Waterproof IP65 Micro Solar Inverter

As their name suggests, micro-inverters are small individually installed inverters connected to every panel in your display. As a panel produces direct current, the micro-inverter instantly converts it into alternating current without having to run the power through a central organizing system. The benefits of this include:

  • Safety – By instantly converting current in the panel, micro-inverters eliminate any chance of a surge in voltage.
  • Potential to monitor panels – Switching currents at the source allows you to gauge each panel’s performance. You can preempt deterioration and quickly identify damaged or defective panels.
  • Longer warranties – Most micro-inverters are sold with a 25-year warranty, allowing you to replace them if they ever break or deteriorate.
  • Multipurpose – Micro-inverters can be used with any sized display, from a home to an industrial scale.

Micro-inverters are, however, more expensive than other types of inverters and if they do begin to break down over time, you will have to replace them individually, potentially causing a shortage in your power supply.

Examples of micro-inverters:

String Inverters Group Panels Together

String inverters are one of the oldest yet most reliable types of solar inverter. Named after the way solar panels are “stringed” together into groups, they have the potential to convert direct currents from multiple panels at one time. They are one of the most common types of inverters thanks to their reliable reputation and come with a couple of prime benefits, including:

  • Low cost – Compared to other, more complex types of inverters, string inverters are the least expensive. Expect to spend around $1,000 less than you would on micro-inverters.
  • Easy Installation – Because string inverters connect multiple panels at once, they take less time to install than micro-inverters.
  • Multipurpose – String inverters can be used in both industrial and home displays.

String inverters are not perfect, though. Since they combine current from multiple panels, they work based on the lowest current available. If one panel performs below the others in a grouping, the higher-performing panels will be dragged down to the same level as the worst performer. This makes string inverters less useful if some of your panels are installed in shaded areas.

Power Optimizers Can Boost Efficiency 

Power optimizers take the best qualities of both string and micro-inverters. Like micro-inverters, power optimizers are individually attached to each panel. However, instead of instantly converting direct current into alternating current at the panel site, they monitor every panel individually to get the highest efficiency possible. Direct current still passes through a string of panels to be converted into an alternating current, but thanks to the optimizers, the current is more stable and less prone to variation.

Benefits include:

  • Potential to monitor panels – In the same way that micro-inverters can monitor panel performance, power optimizers can also track which panels are underperforming or are defective.
  • Increased power output – With optimizers attached to each panel in your display, you can get the maximum amount of power available from your setup.
  • Reduced effect of shade – Optimization also means that your display will not be as heavily affected by shade or cloud cover.
  • Multipurpose – Power optimizers work well with home and industrial solar displays.

Compared to micro-inverters, power optimizers are less expensive but you should still be prepared to pay more for an optimizer than you would for a standard string inverter. If your display is installed in a partially shaded area, it could be worth the investment.

The following video illustrates the differences between micro-inverters, string inverters, and power optimizers.

This video illustrates the differences between micro-inverters, string inverters, and power optimizers.

Central Inverters for Large Scale Displays

Central inverters work the same way as string inverters but are designed for large-scale displays, making them ideal for industrial buildings and solar parks. If you’re only looking to convert current for your home, a central inverter would be far too powerful for your needs.

Compared to smaller inverters, central inverters are actually more economical per watt than a micro-inverter or even a standard string inverter. Since they are installed with fewer parts, you will save money on the amount of material installed per panel. You will, however, have to pay a larger fee for installation on a mass scale.

Hybrid Inverters for Added Power Storage

Sol-Ark 12K Hybrid Inverter

Hybrid inverters are perfect for anyone planning to install a storage system along with their solar display. As its name suggests, a hybrid inverter combines two parts – a solar inverter and a battery inverter. This allows it to convert solar electricity into alternating current for your home or business while simultaneously shifting direct current from your panels into batteries or back into the electrical grid.

This is ideal for anyone producing more electricity than they need. You can sell your electricity to the power company or store it in solar batteries for a rainy day. As grids become more reliant on renewable energy, hybrid inverters will become more common. Although they are generally more expensive than string inverters, you can make up the extra cost by selling power back to the electrical company.

Similar: Do You Need A Generator With Solar Panels? (Plus Alternatives)

What to Look for When Buying an Inverter

Before you buy a new solar inverter, you should also keep an eye out for a few other points of interest:

Guarantee it Has Safety Approval

If you don’t use quality equipment, unregulated electricity can cause fires and electrocution. Before you purchase a new inverter, always check to see if it has been tested and approved by an independent safety regulator. Depending on where you live, look to see if it meets safety standards set by one of the following international regulators:

  • International Electro-technical Commission
  • Underwriter Laboratories Inc.
  • The Institute of Electrical and Electronics Engineers
  • European Committee for Standardization
  • Clean Energy CouncilOpens in a new tab. 

Check the Capacity and Size

You will likely be the best judge of which size inverter you need. Generally, a home display can operate using a standard string inverter and if you like the high-tech benefits of a micro-inverter or a power optimizer, they are also well suited for home setups. However, if you plan to operate a large-scale display for powering industrial complexes, prepare to invest in a central inverter system.

If you already know that you will expand your solar display in the near future, it’s best to invest in an inverter that can handle the additional load. Oversizing your inverter by up to 1.3x isn’t a bad idea if you know that you’ll soon add additional panels and will need the extra inversion power. For more advice, talk with your panel installer about which type of inverter best suits your needs.

Is the Unit Weatherproof?

If you do not plan to install your solar inverter outside, you can get away with buying a unit that is not weatherproof. However, if you choose to buy a weatherproof unit, you’ll have a wider range of options of where to put it. On the off chance that you have already purchased a non-weatherproof inverter, you can always install it outdoors in a weatherproof cage. This will set you back an additional cost but it’s best to be prepared.

Weatherproof inverters have the benefit of:

  • Longer lifetimes
  • Better performance
  • Lower risk

Look for High-Tech Display Features

Some inverters are more advanced than others. Certain models come with advanced displays that give richer information about your panels and can be monitored indoors using a home display or remotely using a mobile app. Some useful information you should look out for includes:

  • Runtime – You want to track how long your solar system has been running to produce electricity.
  • Realtime output – You also want to know how many kilowatts of energy are produced at any given time.
  • Daily production – This will help you track day-to-day variations and gauge overall efficiency.
  • Total production – This will tell you how much electricity your solar system has produced since you had it installed.

Most inverter displays show their measurements in DC input and AC output, so use both to track your panels’ performance.

Find the Best Warranty

Never buy a solar inverter that does not come with a warranty. Most brands offer 5 to 10-year warranties but be safe and double-check before you invest in a pricey product. Realistically, a quality solar inverter should last at least a decade. If your inverter malfunctions before then, you don’t want to be stuck paying for a new one.

Additionally, some brands offer warranty extensions at a minimal extra fee. Compared to paying the cost of a new unit, extending your warranty can help shoulder the burden of replacing a solar inverter at the end of its lifespan. Read the warranty closely and find a brand that matches what you are looking for.

Will it Connect to the Grid?

If you liked the sound of using a hybrid inverter to sell electricity back to the power company, you will first want to find an inverter that connects to the electrical grid. These days, almost all inverters are grid-connected so this shouldn’t be too much of a hassle. Nonetheless, be sure to do your homework and make the right purchase before spending several thousand dollars on an inverter that won’t meet your needs.

Additionally, look for a product that offers at least 93% efficiency if it’s transformer-based or at least 95% efficiency if it’s transformer-less. These are pretty standard levels for any quality product.

Look Beyond Price for Your Needs

Here is the final clincher. Critics of solar power often talk about how expensive it is to set up a solar display, yet you don’t have to spend a small fortune to get a quality solar inverter. That being said, your total overhead will come down to a few things:

  • Size of the unit – Larger solar inverters cost more but can manage more output.
  • Type of unit – String inverters are generally less expensive than micro, hybrid, and power optimizing inverters. Central inverters are the most expensive but offer the lowest price per watt.
  • Bells and whistles – An inverter with a high-tech display and remote monitoring features will cost more than a basic unit.

At the end of the day, you should prepare to spend anywhere from just under $1,000 up to $5,000 for a single inverter unit for your home. However, understand that the more you spend on a high-quality inverter setup, the better your results will be. Purchasing cheap electrical equipment will cost you more in the long run because of shorter lifespans and the potential hazards they pose to your home.


Although most people imagine solar panels when they envision solar power, the solar inverter is the unsung hero behind powering our homes with renewable energy. By repeatedly switching electrical contacts, inverters change direct currents produced in photovoltaic cells into the alternating current we can use in our homes. 

With several different options, you can easily find the right unit to fit your electrical needs. Whether you plan to power a solar farm or simply want to turn your lights on, you can find units with advanced displays, weatherproofing, and grid connectivity.

Max Peters

Hi! I'm Max and I am passionate about off-grid solar technology and adventure! I'm using my knowledge of solar generators, solar panels, and everything in between to provide you with the best tools to keep you powered while off the grid. Read more about me here: About Max Peters."

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