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An inverter is one of the most important pieces of equipment in a solar energy system. It's a device that converts direct current (DC) electricity, which is what a solar panel generates, to alternating current (AC) electricity, which the electrical grid uses. Types of Solar Inverters: Key types include grid-tied inverters for net. . This article explains how inverters work in their basic framework, contrasts an inverter with a generator, and introduces high-performance solar product options to install in your solar energy setup. Generator:. . Home solar panels generate electricity you can use in your home, but it's not quite as simple as running some wires from your panels to your refrigerator.