All solar panels generate DC power. An AC solar panel is the combination of a solar panel with a pre-installed DC to AC inverter. These inverters are referred to as micro-inverters. They come either pre-installed on a solar panel or are attached to the solar panel on the job site during installation.
Because each AC panel is equipped with its own micro-inverter, the disadvantage of voltage drop affecting entire solar array, as it does in centralized inverter systems, is eliminated. Each solar panel can work independently to produce its maximum power in all conditions. The disadvantage of possible higher initial cost is offset by increased power production from the same modules over time and the ability to monitor output at a single module level.