Solar panels produce DC power, whereas our home appliances run on AC.
That's why, besides the panels themselves, every solar system also needs devices called "inverters" to convert the DC power output to AC.
Every inverter also has a maximum amount of power it can handle. Many homeowners are surprised, however, to discover that their inverter capacity is lower than the maximum amount of power their panels can generate.
Their concern is understandable. After all, wouldn’t using inverters with a lower capacity than your solar panels place an unnecessary limit on the amount of power they produce?
As we saw in Part 1 when we examined a sample solar system with 11.8 kW of panel capacity but only 10 kW of inverter capacity, the answer turns out to be"no."
Additional expense with minimal benefit
In Part 1 we discussed one reason for keeping inverter capacity slightly below panel capacity.
Higher-capacity inverters are more expensive. Whereas, since your panels will on their capacity reach the amount of power that would be gained by using them turns out to be minuscule
But there’s another even more important factor at play here which we'll turn to today.
Higher capacity = less efficiency
Like any physical change, it takes energy to convert DC power to AC. That means some energy always gets lost in the process.
It turns out, however, that the closer an inverter gets to its maximum capacity, the more efficiently it operates.
So, let's suppose our sample system had larger inverters in order to handle the tiny amount of extra power the solar panels are capable of generating for a few hours on very sunny mid-summer days.
Besides costing more, the higher capacity inverters would also be operating further below capacity and, hence, less efficiently all the time.
In fact, the worst drop in efficiency would occur during those rare sun-soaked hours those higher-capacity inverters actually seem like they might serve a purpose. During those times, the lower capacity 10 kW inverters are working at full capacity and, hence, as efficiently as they possibly can.
Whereas higher capacity 11.8 kW inverters would only reach maximum capacity for at most a fraction of that time and very likely not at all.
The upshot is that the power gained by sizing inverter capacity to panel capacity would have been offset by a pretty much permanent drop in the percentage of panel power getting converted into usable house power.
So, any small gain achieved by upsizing the inverters to 11.8 kW would wind up getting wiped out by a much larger loss.
The Ideal Ratio
It turns out that making panel capacity around 120% larger than inverter capacity usually keeps conversion losses below 0.25%, which is about the best you can do.
That’s why the system featured in our graph had panels that could produce 11.8 kW of power paired with inverters that could only handle 10 kW—11.8 is 1.18% of 10.
And that’s also why the inverters in your solar system have a lower capacity than your panels. Once the loss of efficiency entailed by using higher-capacity inverters is considered, it turns out that sizing your inverters slightly below your panels gets you more free energy, not less.