Solar electric systems can be applied in many different situations, although they mostly divide into two major categories:

1.Grid-Interactive systems
2. Off grid systems

Grid-connected
Grid interactive systems are the most common and are used in applications when an electrical grid is available. They account for about 95% of all installations. In this scenario, a grid is used to store the energy that was produced during the day. This is the most efficient way of utilizing a solar generating system into the building structure because there is no need for an energy storage bank.

The operating procedure is very simple: during the day time when your system is producing the most and you are consuming the least, energy is pushed back into the electric grid. While this is happening, your electric meter spins backwards and the grid takes on the role of an energy storage bank. When the sun sets, your electric meter spins normally, and you are billed by your utility company for the net energy consumed if you used more electricity than you produced.

These systems will not work during power outages. If the grid is down, the inverter will shut the system down to prevent any workers from being electrocuted while fixing any problems. This is a safety measure, implemented by regulating authorities and cannot be avoided.

Off-Grid systems
Off grid systems are used in installations when an electric grid is unavailable or the customer wants to go completely independent.

The major difference between grid-tied and off-grid systems is that off-grid systems must have a battery storage bank. This battery bank is used to store produced energy, so it can be supplied during the night or on cloudy days when energy production is lower than consumption. These systems are initially more expensive than grid-connected systems because of the additional cost of batteries, battery storage shelves, charge controllers and extra wiring. They also require regular battery maintenance, which involves an additional operating cost. But usually it is still the most cost effective way of generating energy when a grid is out of reach.