With the on-grid system, you are still connected to your existing utility provider while having the solar panels. Your primary source of energy during daytime is going to be the solar panels. utility provider will only supply you if the energy demand of your house is higher than the generation of your solar panels. At night, your utility provider is going to be the one to supply you the energy or electricity. During a power outage, the on-grid system is not going to power up your house because it does not have a back-up battery. This is ideal to help you lower down your bill.