It is usually applies where Electric Backup is not requires, its main purpose is to reduce electricity bills or more saving purpose. Now a days it is using more at commercial/Industries uses  to save energy with lots of money saving.

On-grid means your solar system is tied to your local utility’s GRID. This is what most residential homes will use because you are covered if your solar system under or over-produces in regard to your varying energy needs. All this means for you is that your utility system acts as your battery space.