A recent development in renewable energy technology is 'grid-interactive' or two way grid interconnection. These systems use sophisticated control equipment so that when your renewable energy system produces more power than you need, the excess power is fed back into the grid i.e. power is exported to the grid. When your system doesn't produce or have enough power, then you draw power from the grid. Some electricity retailers offer 'net billing' arrangements, so that they buy the electricity you produce at the same price as they sell their electricity to you. The renewable electricity is produced as Direct Current (DC). The DC electricity from the panels passes through a grid-interactive inverter, which converts the DC electricity into Alternating Current (AC), which is the type of electricity supplied by the grid.

This AC electricity is then used by any appliances operating in the house. If more electricity is produced than the house needs then the excess will be fed into the main electricity grid. Conversely, when the renewable system is not generating enough electricity to power the house, the house will draw power from the grid. Grid interactive systems eliminate the need for a battery backup for when the sun doesn't shine (if it’s a solar system) or the wind doesn't blow (if it’s a wind turbine). In effect, the grid serves as your battery. This means that maintenance costs for your system will be less. It should be noted that without battery storage, a grid connected system will shut down when there is no power on the grid.