On-Grid Systems
Definition: On-Grid Systems are solar pv systems that only generate power when the utility power grid is available. They must be connected to the grid to function. They can send excess power generated back to the grid whenever you are overproducing so you credit it for later use.
Benefits: These are the simplest systems and the most cost effective to install. These systems will pay for themselves by offsetting utility bills in 3-5 yrs.
Downside: They do not provide power during a grid outage.
Off-Grid/Hybrid Solar Systems
Definition: These systems allow you to store your solar power in batteries for use when the power grid goes down or if you are not on the grid to replace generators in general. Hybrid systems provide power to offset the grid power whenever the sun is shining and will even send excess power to the grid for credit for later use.
Benefits: Provides power for your critical loads when the power grid is down.
Downside: Cannot be expected to provide power for all your loads since the cost and volume of batteries would be prohibitive. Off-Grid systems require a lot more specialized equipment to function that is more costly and more complex to install. Specifically they require a central/string inverter, a charge controller as well as a batteries.