Found this from Jon Watte on quora:
"The inverter has a measured efficiency curve. E g, at output power X (or output current X, which together with the average voltage, gives you power) it is measured to be Y efficient.
Thus, you can easily calculate the (average) power balance — DC voltage in x DC current in equals average AC voltage out x AC current out divided by efficiency in percent. (The rest of the power goes into heat.)
Typically, there is a “sweet spot” where it is most efficient, and typically this is close to the maximum rated continuous load, and efficiency falls off with lighter loads.
A cheap inverter for occasional use may be only 80% efficient at average load. A high-quality inverter for whole-house use might be 96% efficient, which sounds like only 16% better, but the cheap one actually generates 5 times as much heat as the quality one in this case. (20% heat versus 4% heat.)"