The DC to AC ratio (also known as the Inverter Load Ratio) is an important parameter when designing a solar project. The key driver here is the “clipping loss”. When the DC power feeding an inverter is more than the inverter’s capacity to, the resulting power is “clipped” and lost.
Adding 20% extra panel capacity to your inverter is a wise choice:
The main reason to oversize an inverter is to drive it to its full capacity more often. As PV modules do not consistently perform at their nominal output rating. The module output power is affected by the weather, the sun’s position during the day/different seasons, local site conditions and array orientation. In addition, module output power may decrease due to aging, soiling and shade. Oversizing the inverter is typically not a requirement, however an experienced PV system designer may choose to oversize the inverter in order to maximize the power production
Secondly, additional loading of inverters offers reduction in overall cost of the system.
However, in some countries, the local authorities prohibits inverter oversizing. In this case, one has to always follow the local regulations.