The vast majority of solar electricity systems being installed in California and throughout the United States today are a configuration called grid-tied systems. This means that they operate without batteries or other forms of on-site energy storage, and that a home or business that installs one of these systems remains connected to the local utility grid. During the day, large systems may generate more energy than the home or business they are installed on uses, and the surplus of energy is fed back out onto the utility distribution system and helps to power loads elsewhere. In the simplest case, this back-feeding process moves the counter of the electricity meter on site in the reverse direction, effectively canceling out some or all of the electricity use that was recorded the night before when the system was not active, and allowing the possibility of a net usage, and a billed usage, of zero, even though at certain times energy is being drawn from the utility grid. This process is called net-metering.
For an update on PG&E's net-metering changes starting in December 2016, check out this article.
In most cases in California, net-metering is coupled with time-of-use billing, in which the Smartmeter notes the time of day electricity is being used, or produced, along with the quantity. A time-of-use rate schedule values electricity at a higher rate during certain times of day than during others, in particular during the times of day when demand is highest, and use of peak plants to meet this extra demand means this electricity is most expensive to generate. The solar resource is greatest during the summer in the middle of the day, which is also the period when the use of air conditioning units for cooling places the most strain on the grid in California, and so generally surplus power generated by a solar system during the day will yield a credit at an appreciably higher rate than the electricity consumed at night will result in a charge. This means that in many cases a system does not need to be large enough to produce all the energy that is used at a home or business annually to deliver a balance-free bill. You can check out PG&E's Time of Use rate schedule here.
The basic components of any grid-tied solar electricity system are the photovoltaic modules and the inverter. Photovoltaic modules – solar panels – produce a voltage that can be used to drive a direct current, the same kind produced by a battery, when exposed to light. This electric current is transmitted through wires to the inverter, which changes the direct current it receives into an alternating current, the kind most home appliances are designed to operate with and the kind which is transmitted on the utility grid. Grid-tied inverters track and regulate the voltage level of the photovoltaic modules at the point that optimizes the energy produced as this point changes with conditions, and shut down automatically when the utility grid goes down to safeguard the welfare of line workers. The inverter is most commonly wired directly to a circuit breaker in the utility panel of the home or business, through which it feeds power to the loads there or elsewhere on the grid. Many grid-tie inverters have integrated direct current and alternating current system disconnect switches, and in some municipalities additional disconnecting means are installed as well.
In PG&E territory. there is no longer a rebate offered on the purchase of a solar electricity system for a home or business. Silicon Valley Power does still offer a generous rebate. There is a federal investment tax credit offered on the purchase of a solar electricity system, worth thirty percent of the remaining cost of the system after available rebate.
Will my solar system produce power when the grid goes down? In general the answer is no, unless you install a battery backup system. However, there is one inverter manufacturer, SMA, that enables you to tap into your solar panels to generate up 1500 Watts of power. You must plug an extension cord directly into the inverter to access the power and the sun must be shining on your panels. This can be very useful in case of emergencies. Here is a link for more information from SMA on this unique feature.
Here is a link to additional information on going solar.