Solar Energy Glossary
A complete reference of key terms, concepts, and industry jargon to help you understand estimates, quotes, and contracts. 33 terms defined in plain English.
B
- Battery Storage
- A home battery system (typically lithium iron phosphate) that stores excess solar energy for use at night or during grid outages.
C
- California NEM 3.0
- California's 2023 net metering reform that cut export compensation by ~75% — dramatically changing solar and battery economics in the largest U.S. solar market.
E
- Energy Offset
- The percentage of your home's annual electricity consumption that solar panels cover — a key system sizing metric, typically targeted at 80–100% for financial optimization.
F
- Federal Solar Tax Credit (ITC)
- A U.S. federal income tax credit equal to 30% of total solar system cost, including installation — the most valuable solar incentive available to most homeowners.
I
- Inverter
- Device that converts the DC electricity produced by solar panels into AC electricity usable by home appliances and the utility grid.
- Interconnection
- The utility approval process that allows your solar system to connect to the electrical grid — a required step before your system can export power or earn net metering credits.
K
- Kilowatt-Peak (kWp)
- The rated maximum power output of a solar system under Standard Test Conditions — the standard unit used to size and compare solar installations.
L
- LCOE (Levelized Cost of Energy)
- Total lifetime cost of a solar system divided by total lifetime electricity produced — the apples-to-apples metric for comparing solar to utility power.
M
- Microinverter
- A small inverter mounted on each individual solar panel that converts DC to AC at the panel level — eliminating shading losses and enabling panel-level monitoring.
N
- Net Metering
- A utility billing arrangement where excess solar electricity you export to the grid earns credits that offset your electricity bill during low-production periods.
- NABCEP Certification
- North American Board of Certified Energy Practitioners certification — the solar industry's most rigorous installer credential, requiring experience, training, and passing a comprehensive exam.
O
- On-Grid vs. Off-Grid Solar
- Grid-tied systems connect to the utility and use net metering; off-grid systems are entirely self-sufficient with batteries — most residential installations are grid-tied.
P
- Photovoltaic (PV)
- Technology that converts sunlight directly into electricity using semiconductor cells — the core technology behind rooftop solar panels.
- Peak Sun Hours
- The number of hours per day when solar irradiance averages 1,000 W/m² — the key location variable that determines how much electricity your panels will actually produce.
- Power Optimizer
- A module-level device that maximizes each panel's DC output before sending it to a central string inverter — a cost-effective middle ground between string inverters and microinverters.
- Solar Panel Degradation
- The gradual decline in solar panel output over time — typically 0.3–0.7% per year, with manufacturer warranties guaranteeing at least 80% output after 25 years.
R
- NEC Rapid Shutdown
- A National Electrical Code requirement that solar systems be able to quickly de-energize DC wiring on the roof to protect first responders from high-voltage hazards.
- Racking System
- The mounting hardware that secures solar panels to your roof — a critical structural component that must penetrate roofing material and attach to rafters.
S
- Solar Panel
- A module of photovoltaic cells encapsulated in a protective frame that converts sunlight to DC electricity — the visible component of a solar installation.
- Solar Payback Period
- The number of years until cumulative electricity savings equal the net cost of your solar installation — the primary metric for evaluating solar financial return.
- SREC (Solar Renewable Energy Certificate)
- A tradeable certificate representing 1 MWh of solar electricity generated — homeowners in eligible states can sell SRECs for significant additional income.
- Solar Lease
- A financing arrangement where you pay a fixed monthly fee to use a solar system owned by a third party — no upfront cost but you forfeit ownership benefits including tax credits.
- Solar Loan
- Financing that lets you own a solar system with no upfront cost while preserving all ownership benefits — typically the best alternative to cash purchase.
- Solar Irradiance
- The power of sunlight reaching a surface, measured in watts per square meter (W/m²) — the fundamental input that determines how much electricity a solar panel can generate.
- String Inverter
- A central inverter that converts DC electricity from a series-wired string of panels — cost-effective but limited by the worst-performing panel in the string.
- Solar Installation Cost
- The total installed cost of a residential solar system, typically $2.50–$4.00 per watt before incentives — highly variable by system size, location, and installer.
- Solar Shading Analysis
- An assessment of shadows cast on a roof throughout the year from trees, chimneys, and neighboring structures — essential before system design to avoid installing panels where they will underperform.
- Solar Monitoring
- Software and hardware that tracks your solar system's real-time and historical production — essential for detecting underperformance, inverter faults, and verifying estimated output.
- Solar Roof vs. Solar Panels
- Solar roof products (like Tesla Solar Roof) replace roofing material with integrated solar tiles — higher cost but aesthetic for aging roofs; traditional panels add on top of existing roofing.
- Solar Permit
- A building permit required by local government before solar installation — adds cost and time but ensures structural and electrical safety compliance.
- Solar Installer Selection
- The process of evaluating and choosing a solar installation company — the most important decision in any solar project, as installation quality determines long-term system performance.
T
- Time-of-Use (TOU) Rate
- A utility pricing structure where electricity costs vary by time of day — typically highest in late afternoon/evening when solar produces little, fundamentally changing solar and battery economics.
U
- Utility Rate
- The price per kilowatt-hour (kWh) you pay your electric utility — the single biggest variable in solar financial returns, as higher rates mean larger savings.
33 terms · Updated April 2026