Solar PV power plant consists of
1. Solar panels
2. Solar Inverter
3. Battery (optional)
Solar panels convert solar radiation into DC electricity. Our loads at home or factories run using AC electricity. To convert DC electricity from panels into AC electricity, solar inverter is required. AC electricity from solar inverter can be used to run loads.
Solar radiation is intermittent in nature. Therefore, more often production from solar panels does not match load requirement. To balance generation from solar and load, there are two options:
Batteries
Store electricity from solar panels into battery and withdraw as per load requirement
Grid
When solar generation is more than load, inverter exports the extra generation into grid. The exported units can be used when generation from solar is less or not available to run loads. These exported units are recorded by your utility; adjusted in monthly bills. This process is called net metering. Please read here about net metering.
If you use grid to balance solar generation and load, they are called on-grid systems. If you use batteries, they are called off-grid systems.
On-grid systems cost less but work only when electricity connection and supply are there. Off-grid systems cost more as it involves extra money for batteries. Also, type and amount of load does not matter in on-grid systems as grid takes care variations from load and solar.
When it comes to financing Solar PV Power Systems, two models in the industry work. They are OPEX and CAPEX.
CAPEX
In CAPEX model, customer invests, owns and enjoys all the benefits from the system. Customers generally hire third parties to maintain the solar plant for yearly fees. Check Out How Much Area Do You Need to Meet Your Energy Requirements.
OPEX
In OPEX model, customers just provide space for installation of the solar plant. The third party invests, operates and maintains the power plant. Customer pays monthly bills at a discount of the existing electricity bill. This frees up capital for the customer to invest in other activities. Read more about CAPEX, OPEX.