A grid-tie inverter (GTI) or synchronous inverter is a special type of power inverter that converts direct current (DC) electricity into alternating current (AC) and feeds it into an existing electrical grid. GTIs are often used to convert direct current produced by many renewable energy sources, such as solar panels or small wind turbines, into the alternating current used to power homes and businesses. The technical name for a grid-tie inverter is "grid-interactive inverter". Grid-interactive inverters typically cannot be used in standalone applications where utility power is not available. During a period of overproduction from the generating source, power is routed into the power grid, thereby being sold to the local power company. During insufficient power production, it allows for power to be purchased from the power company.
Residences and businesses that have a grid-tied electrical system are permitted in many countries to sell their energy to the utility grid. Electricity delivered to the grid can be compensated in several ways. "Net metering", is where the entity that owns the renewable energy power source receives compensation from the utility for its net outflow of power. So for example, if during a given month a power system feeds 500 kilowatt-hours into the grid and uses 100 kilowatt-hours from the grid, it would receive compensation for 400 kilowatt-hours. In the US, net metering policies vary by jurisdiction. Another policy is a feed-in tariff, where the producer is paid for every kilowatt hour delivered to the grid by a special tariff based on a contract with distribution company or other power authority.
In the United States, grid-interactive power systems are covered by specific provisions in the National Electric Code, which also mandates certain requirements for grid-interactive inverters.