When you think of going solar, the first thing that comes to mind is the panels. However, the most important part of the system is, in fact, the inverter. Solar inverters serve as the brain of a solar installation and make it so you can actually use the electricity your solar panels are producing. 

Because inverters are so important, it can be a bit intimidating figuring out which inverter setup is right for your home. This guide will help you understand how inverters work, what types are available, and which solar inverter setup is the right fit for you. 

How do solar inverters work?

When solar panels produce electricity, they produce something called direct current, or DC electricity. However, most home appliances don’t use DC electricity to operate. That’s where an inverter comes in: the electricity flows from the solar panels to the solar inverter, which then converts that DC electricity into alternating current (AC) electricity that can actually run appliances. 

Learn more: AC vs. DC power

Solar inverters do way more than just convert electricity - they also help maximize the amount of solar power your system produces. Not only that, they make sure your solar system is operating as safely as possible by detecting abnormal electrical currents and utility grid outages to prevent damages to your solar panels, home, and utility workers. 

Types of solar inverters

Your solar installer will recommend which inverter you should use and it will be included in their system design. The cost of the inverter will be rolled into the entire cost of the solar installation.

There are four main inverter options to consider when designing your home solar system:

• String inverters
• Microinverters
• Power optimizers
• Hybrid inverters 

There are other types of solar power inverters that are used for commercial-sized and off-grid installations like central inverters and standalone inverters, but we won’t be focusing on them.

Let’s get into the details of some of the inverters you’ll actually come across when you’re installing solar panels on your home. 

String inverters

Top brands: Fronius, SMA 

Average price for a 6 kW solar system: $1,000 - $1,500 

Best suited for: Homes with simple roofs and little to no shade

String inverters are the oldest solar inverter technology, and they’re designed to work with solar panels that are wired together in strings. 

The DC electricity produced by the string of panels gets sent all at once to the inverter, where it is converted into AC power, and then is sent to your appliances. String inverters have the least amount of hardware, making them the most cost-effective inverter to install. 

You can get more details about how they work by reading our complete guide to string inverters. 

Despite being the original solar inverter, they aren’t perfect. Shading has a bigger impact on solar systems that use string inverters because of the way the panels have to be wired together. Basically, if one panel’s output is decreased by shading, the output of all of the panels in the string will drop, as well. 

You can also run into issues with string inverters if you have a complex roof where you need to install panels on multiple roof planes or at many different angles. Plus, string inverters typically have to be replaced every 10 to 12 years. And if your string inverter breaks, your whole system goes down. The silver lining is, however, they’re easier to fix than some of the other types of inverters. 

Microinverters

Top brands: Enphase

Average price for a 6 kW solar system: $2,000 - $2,500 

Best suited for: Homes with complex roofs and some shading, and homeowners who might want to expand their solar system in the future

Microinverters convert DC to AC at the back of every single panel. Enphase came onto the scene in 2008 with their new inverter technology, the microinverter, hoping it would solve all those pesky performance problems that come with installing a traditional string inverter. 

By having a microinverter on the back of each panel, you don’t have to worry about the shading or orientation like you do with string inverters because every panel is monitored individually. In fact, a study conducted at the University of Virginia found that shaded solar installations that used microinverters were 27% more efficient than those that used string inverters. Plus, they’re warrantied for 25 years!

For a closer look at microinverters and how they work, check out our in-depth guide here.

Although microinverters solve many of the issues that come with string inverters, they have their own set of downsides. Mainly that they’re about $1,000 more to install than string inverters. But price isn’t the only issue - having an inverter on the back of each panel means you have a lot of hardware on your roof, which increases the chances that something could break. 

And if there is a broken inverter, you have to get someone up on the roof to replace it (typically, the installer who set up your system).

Power optimizers

Top brands: SolarEdge

Average price for a 6 kW solar system: $1,300 - $1,800

Best suited for: Homes with complex roofs and some shading

Power optimizers, also called DC power optimizers or DC power converters, are a lot like microinverters in that they are attached to the back of each solar panel and allow for individual panel monitoring. However, they don’t convert electricity from DC to AC. Instead, optimizers maximize each individual panel’s output and send it to a string inverter, where the DC electricity is subsequently converted to AC electricity.

Want more details? Check out our DC power optimizer breakdown. 

Power optimizers allow you to override the issues of traditional string inverters and harness the benefits of microinverters - without having to pay an arm and a leg. They also make it easy to install solar batteries with your panels. 

Plus, they add only about $300 on top of string inverter costs for an average solar installation. And because they boost how much energy your system produces, it’s more than worth it. 

One negative aspect is if one power optimizer has an issue, the entire system needs to be shut down to replace it, which means you might not produce solar for a few hours while it’s being fixed. It can also be difficult to detect whether issues with the solar system are because of the power optimizers or the string inverter. 

And even though the optimizers themselves are warrantied for 25 years, the inverter will only last 12 years. This means you’ll need to have someone come and replace your inverter at some point. It’s not a huge deal, but it is a bit of an inconvenience (not to mention having to keep track of two separate warranties) and an added cost down the line. 

Hybrid inverters

Top brands: Outback

Average price for a 6 kW solar system: $1,500 - $3,000

Best suited for: Homes with solar-plus-storage systems

With the public’s increased interest in resiliency and energy independence, it’s worth noting that hybrid inverters pair well with home battery backup systems. 

Hybrid inverters have the capability to convert DC electricity from your solar panels to AC power for your home, and also the ability to convert AC electricity from the electrical grid to DC power to charge your battery bank. 

The cost for a hybrid inverter can vary considerably, depending on what features it has. It’s possible to find ones for cheap, but if you want more advanced capabilities, you’re going to have to be willing to shell out some more money. 

Learn all about hybrid inverters here. 

They also come with a charge controller to smartly detect when to direct solar energy to:

• Your energy storage system,
• Your home circuits, or 
• The grid 

The charge controller can also pull electricity from the grid to charge your battery. Not only that - some hybrid inverters have multiple modes, which can be configured to provide power to essential home circuits when the power grid is down. 

What does the future of solar inverters look like?

Module level power electronics (MLPEs), like power optimizers and microinverters, have been steadily gaining popularity ever since they were introduced to the market back in 2008, and they don’t show any signs of slowing down. According to a report released by Berkeley Lab, 94% of solar power systems in 2020 were installed with some form of MPLE. 

However, this isn’t all that surprising. While installing microinverters and DC optimizers does increase the cost of installing solar panels, they provide so many added benefits, like panel-level monitoring, that it's worth the cost. 

MPLEs also meet rapid shutdown safety requirements set forth in the National Electric Code (NEC) to protect emergency responders in case of a fire. Why would you install a string inverter on its own when there is a proven way to make the system safer, operate better, and make design easier? 

What is the best solar inverter for home solar installations?

DC power optimizers are going to give you the best value for what you’re paying for, especially if you have a more complex system design or if you’re looking to incorporate solar battery storage. 

They let you monitor the performance of your panels, maximize your solar system’s performance, and they won’t break the bank (like microinverters). We recommend going with the SolarEdge DC power optimizer, since they are one of the only reputable manufacturers of power optimizers on the market.

Despite that, we have to admit that the newest Enphase microinverter, the IQ8, is pretty impressive. The IQ8 is the first microinverter that allows your solar panels to stay on in the event of a power outage even if you don’t have a battery. This is a pretty big deal for homeowners who live in areas that experience regular utility blackouts but can’t afford to spend the extra $10,000 (or more!) for solar battery backup power. 

Of course, the inverter setup that's best for you and how much it will cost really depends on your individual situation. To find what type of inverter is right for your home, we recommend getting quotes from local solar installers in your area who can assess your roof conditions and energy consumption to determine what makes the most sense. The easiest way to compare quotes from reputable installers near you is by using our solar panel calculator.