An inverter is an electrical device which converts DC voltage, almost always from batteries, into standard household AC voltage so that it is able to be used by common appliances. In short, an inverter converts direct current into alternating current.
Direct current is used in many of the small electrical equipment such as solar power systems since solar cells are only able to produce DC.
They are also used in places where a small amount of voltage is to be used or produced such as power batteries which produce only DC. Other than these fuel cells and other power sources also produce DC.
AC power is widely used and since most of the appliances require a relatively higher amount of power than DC can supply since DC power is designed to work on low voltages. So due to the reason that the power produced by DC producing devices has to be made available to our regular appliances, we need inverters nowadays.
These are the basic type of inverters, which along with the inversion of DC to AC, also produce an increase in the amplitude of the voltage and hence produce a change in the frequency.
The output of these types of inverters is a sine wave usually, but in some cases, the output gets distorted due to several reasons and appears in the form of a modified sine wave or a square wave.
Grid-Tie inverters, as their name indicates, the output AC power is supplied to a grid type network, i.e. a larger scale supply unit. Afterward, through this unit, the power is distributed further. Due to this reason, they have a complex construction and internal circuitry, because they have to synchronize with the grid network.