An on-grid system has no batteries. It works alongside the DISCOM supply, exports surplus units through a net meter and shuts down during a power cut for lineman safety. It is the cheapest per unit generated and is what over 90% of our residential customers choose.
An off-grid system runs entirely on batteries and is only sensible where there is no grid at all — remote farms, forest sites, telecom towers. It needs a much larger battery bank, careful load discipline, and battery replacement every 5 to 8 years.
A hybrid system combines both: it exports to the grid like an on-grid plant but also charges a battery bank that carries your essential loads through an outage. Hospitals, laboratories, data rooms, hotels and homes in outage-prone areas benefit from it.
The honest rule of thumb: if your area gets fewer than a handful of outages a month and you already have an inverter for lights and fans, on-grid solar plus your existing inverter is usually the better value. Pay for batteries only when downtime genuinely costs you money.
Also note that only on-grid and the grid-tied portion of hybrid systems are eligible for PM Surya Ghar subsidy, since the scheme requires net metering.