Updated on August 6, 2025
On your solar journey, especially if you’re well on your way in your research about systems, you’ve probably discovered that the type of inverter you invest in is way more important than the type of solar panels you’re considering.
Deciding on an inverter type will influence every other decision you make around your solar system. There are three types of inverters: the central string inverter, the hybrid string inverter, and the microinverter. And let’s not forget that there are batteries with inverters within their system as well. It’s a lot to wrap your head around.
At PSC Energy, we’ve been addressing issues with inverters for years. We do it every day. And we’re here to help you understand everything you need to know about solar, so you can make the best choices for yourself and your home.
In this article, you will learn:
- What is a Hybrid Inverter?
- Battery Storage and Inverters: What You Need to Know
- Do You Need a Hybrid Inverter to Connect a Battery?
By the end of this article, you’ll know whether or not a hybrid inverter is a necessary investment for your solar system.
What is a Hybrid Inverter?
Solar panels – at this moment in the history of science and technology – are only capable of producing direct current (DC) power, and your home and the grid utilise alternating current (AC) power. That’s just the way it is.
An inverter, whether it’s central, hybrid, or microinverter, is responsible for converting DC power harvested by the solar panels into AC power for the home to use.
The hybrid inverter was developed and manufactured to solve the issue of incompatibility between external inverters and solar batteries. An AC-coupled solar battery (like the Enphase IQ Battery 5P or the Tesla Powerwall 3) will have an inverter in it that converts the AC power it’s receiving back into DC power for storage, so there’s no reason to install a hybrid inverter.
It’s a little different if you have a central inverter and you want to have a DC-coupled battery. The inverter cannot communicate with it. It’s only able to convert the DC power from the roof into AC power for the home to use. It can’t send AC power to a battery without it being transformed into DC power.
The hybrid inverter combines central and battery inverters into one unit, allowing excess solar energy to be stored in batteries for later use. It can operate in different modes, including battery backup mode for power outages.
To provide backup power, household switchboards may need modification, adding to installation costs.
They also direct traffic for your solar system by controlling the flow of electricity between panels, batteries, and the grid for optimal efficiency.
Hybrid solar inverters come with advanced features like Wi-Fi connectivity and smartphone apps, allowing users to monitor energy production and battery status in real time.
This helps them make informed decisions about energy usage and optimise their solar energy system’s performance. This is called consumption monitoring (energy use monitoring), and it’s helpful in determining how to use your solar system based on your energy habits.
If you’re interested in learning a bit more about solar panels and energy systems, you might want to check out the following article titled, Are Solar Panels Worth It in NSW, Australia? A Price Breakdown for 2025.
Battery Storage and Inverters: What You Need to Know
Each household installing a battery storage system requires an inverter to convert stored DC electricity into usable AC electricity for the grid and appliances. Then, to convert the stored DC energy back to AC power, another inverter is needed. The options include battery-specific inverters and hybrid inverters.
Standard String Inverters:
As we’ve already mentioned, a solar system inverter’s job is to change the DC power from solar panels into AC power. While different brands may offer extra features, this conversion is essential for them to be considered inverters. In Australia, there are many brands available, such as SMA, Fronius, and ABB/Power-One.
Pros:
- String inverters have been popular for a while now, with multiple installers across Australia who know how to install and service them.
- It’s not just a lot of options for service, it’s a lot of options for products as well.
- String inverters are incredibly popular because they are cheap.
Cons:
- Your system will need an inverter upgrade if you want to add a DC-coupled solar battery because a standard string inverter is incompatible with that technology.
- The monitoring functions are very ineffective because a string system cannot provide panel-level performance information (unless you invest in optimisers).
Hybrid Inverters:
In residential solar with battery storage setups, a hybrid inverter can handle power from both solar panels and a battery because it can convert DC power to AC power and back again. It sends electricity to charge batteries using solar panels or the grid, depending on how you program your inverter to function.
Pros:
- Considered an all-in-one inverter solution for grid-connected systems with a DC-coupled solar battery.
- Can be installed without batteries for “futureproofing.” This futureproofing only applies to DC-coupled batteries.
Cons:
- They are central inverters that can convert power in two different directions, yes. Unfortunately, they are limited by being a component in a string system, and string systems have all the problems we mentioned earlier.
- Less efficient than dedicated solar-only or battery-only inverters. There is some energy loss in converting DC power to AC power and back to DC power again.
Battery Inverters:
Battery inverters (which are contained within the housing of your AC-coupled solar battery) control how batteries charge and discharge. Like regular inverters, they convert DC to AC electricity, but they will also convert AC back to DC to charge batteries and again convert DC power back to AC power when the battery is discharged.
Pros:
- A battery with a built-in inverter offers greater system design flexibility.
- They are easily added to existing solar systems for additional battery storage.
Cons:
- There are a few cons to an AC-coupled battery with a built-in inverter. However (on rare occasions), if the solar battery with a built-in inverter has only one built-in inverter (like the Tesla Powerwall 3) and that inverter fails, then you’d need to replace the entire battery. This does not happen often, but when it does happen, comprehensive warranties from manufacturers fulfilled by your in-house installer make sure the damaged equipment is replaced as swiftly as possible.
If you’re interested in solar batteries, you might want to check out the following article titled, Are Solar Batteries Worth It in NSW? PSC’s Ultimate Guide for 2025.
Do You Need a Hybrid Inverter to Connect a Battery?
Hybrid solar inverters are marketed as a truly “battery-ready” inverter. What does it mean for an inverter to be “battery ready?”
Many Sydney residents investing in solar are interested in solar batteries, but the upfront expense and extended payback period make homeowners cautious. Some are waiting for the cost of solar batteries to drop. However, as you wait for prices to come down, you’re still paying a premium for electricity from the grid.
If you hear the phrase “battery ready,” you might think that a hybrid inverter is what you want to install if you want to add a battery later. After all, that’s what the phrase seems to mean when used to sell hybrid inverters.
Hybrid inverters are technically “battery-ready” in that you can install a solar battery to them later. Probably. Possibly. Honestly, you might not be able to do that.
This is where the truth about hybrid inverters starts to get sticky.
You don’t need a hybrid inverter for an AC-coupled battery system. You can retrofit batteries to any existing solar system, regardless of the inverter type.
Hybrid inverters still have limitations. They only work with some batteries, and that equipment might not be available when you want to buy it later. They’re also more expensive than regular inverters.
Here with a few words on hybrid inverters is our founder, Founder and Director of PSC Energy, Jake Warner:
They say you can buy a hybrid inverter at any time and just go bolt a battery on it magically – as if that’s how it works. The reality could not be further from the truth. No matter what any salesperson says, it’s difficult to futureproof a solar system [futureproof in this context means technology remaining compatible years from now].
For example, SolarEdge manufactured an RWS model hybrid inverter that was compatible with the Tesla Powerwall 1. LG Chem offered equipment that did the same. If you purchased either of those inverters back in the day and thought that in five years you could bolt a battery onto them, you’d be significantly disappointed right now. Like really disappointed. There are no batteries compatible with those inverters today.
My opinion is: if you’re going to spend an extra $1,000 or whatever they’re marking up these things as, just purchase the battery right away. You know it will be compatible with your solar system.
No matter what anyone says, even us, it’s impossible to “futureproof” your solar system. No one can guarantee backwards compatibility. Even the Tesla Powerwall 3 is not backward compatible with the Powerwall 2, and Tesla is producing one of the most advanced battery systems in the world.
I say, do it once and do it right.
However, if you do want to install them separately, you’ll need an AC-coupled battery solution.
For example, we install Enphase solar systems. It’s very easy for someone to come back later and bolt on a Tesla Powerwall 3 as an AC-coupled option.
If the client has an Enphase system and plans to upgrade to Enphase batteries, they’ll need to replace the iBoard with an IQ Controller. Some clients think it’s a great idea to install the IQ Controller instead of the iBoard to be futureproof, which is a terrible idea because that IQ Controller might not even be compatible with Enphase batteries five years from now. Don’t spend a ton of money on anything to “futureproof” it or be “battery ready” or anything else along those lines.
Sometimes technology simply evolves, like Apple changing the plugs for USB and charging cables on their MacBook laptops.
When you’re ready to invest in batteries, then go in whole hog and do it right. Half measures will end up costing significantly more.
If you’re interested in learning a bit more about the price of solar batteries, you might want to check out the following article titled, How Much Are Solar Batteries? A Full Breakdown of Prices, Rebates, and Value in 2025.
Hybrid Inverters: Wire You Spending Money on Them?
Now you know the ins and outs of hybrid inverters. Sometimes we get equipment in the solar industry that’s meant to solve a problem, but because the industry is evolving in leaps and bounds, newer technology will eclipse older equipment and methods.
At PSC Energy, we want you to be informed so you’ll be happy with your solar system. A happy solar enthusiast knows what they need to spend money on and what they don’t need to invest in. There are a variety of options and solutions to every possible difficulty a solar installation might encounter.
Just because we have a bias against hybrid inverters doesn’t mean they won’t be a good fit for your solar system. But make sure you are fully educated on what they can do for you before you upgrade your inverter.
If you’re interested in learning a bit more about the federal solar rebate, also known as the Federal Cheaper Home Batteries Program, you might want to check out the following article titled, What the 2025 Federal Election and the Government Rebate Means for Solar Batteries in Australia.
FAQ: Hybrid Inverters
What does a hybrid inverter do in a solar system?
A hybrid inverter converts the direct current (DC) power from your solar panels or battery into alternating current (AC) power for your home. It also manages the flow of electricity to and from a battery.
Do I need a hybrid inverter if I want to add a battery later?
Not always. You only need a hybrid inverter if you plan to install a DC-coupled battery. These batteries need the inverter to handle charging and discharging using DC power. If you’re using a battery with an enclosed inverter, like the Tesla Powerwall or the Sigenergy SigenStor, you don’t need a hybrid inverter at all. These batteries come with their own built-in hybrid inverters.
What’s the difference between AC-coupled and DC-coupled solar batteries?
An AC-coupled battery stores energy using alternating current. It includes a built-in inverter to convert electricity in both directions. These are easier to retrofit to existing solar systems. A DC-coupled battery stores energy using direct current and relies on a hybrid inverter to manage charging and discharging. DC-coupled setups can be more efficient but are harder to add later.
Is a hybrid inverter truly “battery-ready”?
Some hybrid inverters are advertised as battery-ready, but that doesn’t always mean you can easily add a battery years later. Battery models change over time, and not all batteries stay compatible with older inverters. For example, some SolarEdge and LG hybrid inverters from a few years ago can’t connect to any current battery models. Always check current battery compatibility before relying on future upgrades.
Can I futureproof my solar system with a hybrid inverter?
No inverter can truly be futureproof. Technology changes quickly, and manufacturers update batteries, software, and communication standards. Even the Tesla Powerwall 3 is not backward compatible with the Powerwall 2. If you plan to add a battery in the future, use an AC-coupled battery or wait until you’re ready and install the system all at once.
Are hybrid inverters worth the extra cost?
That depends on your situation. Hybrid inverters tend to cost more than regular string inverters. They’re helpful if you plan to install a DC-coupled battery at the same time as your solar panels. If you’re not sure about adding a battery or plan to add one much later, a standard inverter plus an AC-coupled battery may give you more flexibility.
What are the pros and cons of a hybrid inverter?
Pros:
- Can charge and discharge DC-coupled batteries.
- Offers energy monitoring and backup modes.
Cons:
- Adds complexity and cost
- May not be compatible with future battery models
What is the difference between a hybrid inverter and a string inverter?
A string inverter only handles solar panel output. It converts solar DC power into usable AC power. It does not control battery charging or storage. A hybrid inverter does both. It converts power and manages battery flow. It allows for direct connection to a DC-coupled battery.
Do hybrid inverters support blackout protection?
Some hybrid inverters can offer backup power during an outage, but not all do. Even with blackout protection, your home’s switchboard may need extra wiring, which adds to the cost. Always ask your installer if the system you’re buying will power your home during a blackout and which circuits it will support.
Can I use a hybrid inverter without installing a battery?
Yes. You can install a hybrid inverter without a battery and add the battery later. But this only makes sense if you’re planning to add a DC-coupled battery soon. Otherwise, you’re spending more upfront on an inverter that may not suit future technology.
Are microinverters better than hybrid inverters?
Microinverters and hybrid inverters serve different purposes. Microinverters are mounted beneath each panel and convert power independently. They’re great for homes with shading or roofs facing multiple directions. Hybrid inverters are central units that manage both solar energy and battery storage. Each has benefits, depending on your home’s layout and energy goals.
