Backfeeding occurs when electric power is being induced into the local power grid. Power flows in the opposite direction from its usual flow. An alternating current (AC) power station typically delivers power to the power grid by inducing a current to flow into or to the power grid when the voltage is positive, and inducing it to flow out of the power grid when the voltage is negative, and a typical power grid load (e.g. factory or home) induces current to flow out of the power grid when the voltage is positive and into the power grid when the voltage is negative. If either of these types of facilities starts inducing current like the other, then backfeeding is occurring. Generators that are backfeeding pumping energy into the grid making it available for all to use.
A power station will typically backfeed when it is shut down, due to local loads (e.g. lights or repair equipment). A power grid load may backfeed if it has distributed generation installed, such as a grid-connected photovoltaic solar power system or a microturbine-based power generator. It is also possible for an electric motor to temporarily backfeed if it is mechanically overpowered (see regenerative braking).
For cost reasons, many of the circuit (overcurrent) protection and power quality control (voltage regulation) devices used by electric utility companies are designed with the assumption that power always flows in one direction. Setting up an interconnection agreement for equipment designed to backfeed between an electric utility customer with distributed generation and their power company can involve nontrivial engineering and possibly equipment upgrade costs to keep the distribution circuit properly protected. Such costs may be minimized by limiting distributed generation capacity to less than is locally consumed and guaranteeing this condition by installing a reverse-power relay that opens if backfeeding occurs.