How Power Grids Work

Grid-Connected Renewable Energy Systems

If you live in states like Arizona, New Mexico and Nevada, it pays to have solar panels. The city of Tucson, Arizona averages more than 3,800 hours of sunshine each year [source: Current Results]. In the past, if you wanted to generate your own power using renewable resources like solar panels or wind turbines, you would have to operate "off the grid" — disconnected from the power grid run by your local electrical utility.

Now, thanks to upgrades in technology and changes in policy and regulations, most states and utility companies allow individuals to generate their own power and remain linked with the larger grid.

How does it work? Armed with a special electrical meter and some current inversion equipment, homeowners can tap renewable resources like sunshine and wind to supplement the electricity they receive from the grid. If it's a cloudy day in Tucson, folks with grid-connected homes don't have to read in the dark. They can use as much or as little electricity from the main grid as they want.

Even better, if homeowners are able to generate more power than they need, the local utility will buy the excess power from them, essentially "turning back the meter" [source: DOE].

Home Battery

One drawback of traditional grid-tied solar energy systems is that consumers use most of their electricity in the morning and evening, while solar power production peaks in the middle of the day. In essence, homeowners sell their daytime energy to the utility and buy it back at night. In 2015, Tesla Motors, the electric car company, announced its Powerwall system, a wall-mounted lithium ion battery that stores kilowatts of solar-generated power right in the home, rechargeable and ready for use [source: Tesla].