The duck curve describes how the electricity demand left for other resources can fall during strong daytime solar production and then rise as solar output declines. It is a graph of net demand over time, not a graph of solar-panel efficiency.
The US Department of Energy explains the familiar California chart using a spring day: sunshine is plentiful, while mild temperatures can keep heating and cooling demand low. The evening decline in solar output can then coincide with rising demand. Flexible demand, storage, and grid operations all belong in the discussion. Department of Energy explanation.
Read the two problems separately
The midday dip and the evening rise pose different planning questions. During the dip, operators need ways to accommodate abundant generation. During the rise, they need resources that can meet the change in net demand over the available time.
Storage, shifting electricity use to solar-rich hours, and more flexible grid operation can help. The right mix depends on the system. The curve does not establish that a particular region must build one specific type of power plant.
A worked illustration
Suppose a fictional grid has demand of 100 units at noon and solar output of 60 units. Ignoring other variable sources for this example, its net demand is 40 units. Later, demand is 110 units and solar output is 10 units, leaving 100 units.
The change is 60 units. But that number alone is incomplete: a change over one hour requires a different response from the same change over six hours. Label the time axis, the units, and which sources have been subtracted before comparing curves.
These numbers are illustrative, not California operating data.
Avoid a common reading mistake
Low net demand does not mean consumers stopped using electricity. Some demand is being supplied by solar. Likewise, a steep evening rise need not mean total consumption rose by the same amount: falling solar production also changes the subtraction.