In Grid Tie Solar system in which the solar inverter is connected to the AC power grid, when the solar radiations hit the solar panels surfaces, they produce direct current electricity (called DC), then the solar inverter will convert this DC electricity to AC electricity to run our household appliances and others loads. This process is done every day quietly and automatically.
The more the sun shines, the more DC electricity the solar panels can produce, and the more AC energy we can get. When the AC power is larger than our loads requirements, the excess electricity will send back to the electric power grid allowing other neighbors customers to use this clean solar energy. But if the AC power generated from the solar grid tie system is less than our loads requirements, then our loads will pull extra power required to run properly from the electric power grid. The 2 cases will be done automatically via the brain of the solar system which is the inverter, without any other interventions.
The power will proceed go forward and back based on your loads consumed power and grid tie solar system generated AC power. Eventually, a system called “Net Metering” is generated, which mean that the electric utility will ask you to pay the power difference price or charge you the power difference price, based on whether you consumed electricity or generate electricity over the entire agreed billing period.
Of course, there will be economical feasible study that should be produced by the grid tie solar system designer, to indicate return on investment for this project. And usually, the grid tie solar system returns its whole installation price in 5-6 years while its expected life time is approx 20-25 years. The return on investment differs from one country to another based on the energy tariff and solar radiation intensity.
Typically, the grid tie solar system is designed to cut off a certain part of electricity bill Not the whole bill because of high capital costs of large solar system, but usually the large grid tie solar system will be more economically feasible and return back of investment period will be lower.