How is solar power consumed before grid power
Basically, all the power is merged, and you are billed for the difference between the output from your solar panels and the power used in your house.

Simplified, the power grid's transmission lines are inductors, so when the voltage rises on one end, a current needs to get going through the line. If you simultaneously raise the voltage on your end, that current can be smaller, so the network sees your area as needing less power (the local substation serves multiple houses that at least for now will still have a net draw). When solar becomes widespread enough that you and your neighbours produce more than you consume, then indeed the current may flow in the other direction.

When more solar power is produced, then this means less load on the other generators. The power companies will then turn off some water turbines (because these can react quickly) and leave the big power plants online. If more power is produced than consumed (regardless of the source) they start pumping water uphill, which they can then run through generators at times of high demand (basically, using a lake as a huge capacitor).