When using grid-connected systems solar photovoltaic electricity is fed into the grid. As the electricity generated by a PV module is in the form of direct current (d.c.) the electricity needs to be converted to alternating current (a.c.) for which an inverter is required.

We distinguish two types of grid-connected PV systems. Small utility interactive PV-systems can be used by private owners for their own consumption. Energy surplus will be fed into the grid, while in times of shortage (e.g. at night) energy will be consumed from the grid. The other option is utility scale, central station PV fields, managed by the utilities in the same way as other electric power plants. All d.c.-output of the PV field, which are generally of megawatt range, is converted to a.c. and then fed into the central utility grid after which it is distributed to the customers.

In a grid-connected power system the grid acts like a battery with an unlimited storage capacity. Therefore the total efficiency of a grid-connected PV system will be better than the efficiency of a stand-alone system: as there is virtually no limit to the storage capacity, the generated electricity can always be stored, whereas in stand-alone applications the batteries of the PV system will be sometimes fully loaded, and therefore the generated electricity needs to be "thrown away".

In industrialized countries, where a connection to the mains network is generally available, PV systems are not economically attractive. For example, a 1,5 kW roof mounted PV system would typically have an installed cost of some USD 10 000. The cost of electricity produced by this system would depend on the overall system efficiency, the resource availability, the lifetime of the system and the assumed discount rate, but unit costs are typically in the order of USD 0,35-0,65 per kWh. Nevertheless, this might not be an entirely accurate reflection because it is often not appropriate to assign a monetary value to the benefits that PV can bring. The most recognized "added value" of solar photovoltaic electricity is that it does not pollute our environment.

Many people today are concerned for the future of the planet. Conventional energy technologies are widely recognized as a major cause of environmental destruction - both in terms of depletion of natural resources and pollution. PV and other renewable energy technologies are gaining acceptance as a way of maintaining and improving living standards without harming the environment. More and more energy utilities are responding to the wishes of consumers by including PV in their supply mix.

Incorporation into rooftops and facades of buildings is anticipated to be the main application for PV in many industrialized countries. Japan, Germany, the Netherlands and Switzerland in particular are already progressing along the path of distributed PV systems. The main attraction is that various costs - such as purchase of land and building components and transmission and distribution costs - can be avoided either wholly or partially.

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