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Solar glossary

Every term used on this site, in one line each. If something here is still unclear, that’s a failure of the definition, not of you.

Last reviewed August 2026 · Nothing on this page is for sale

The eight that actually matter: kilowatt, kilowatt-hour, cost per watt, inverter, net metering, escalator, dealer fee, and cash price. Understand those and you can hold your own in any solar conversation.

Alternating current (AC): The kind of electricity your house wiring and outlets use. Panels don’t produce it — an inverter makes it.
Amp-hour (Ah): How battery capacity is measured in 12-volt systems like RVs. Amps drawn multiplied by hours.
Anti-islanding: The safety feature that shuts your system down during a power cut, so it can’t electrocute line workers. It’s why solar alone doesn’t work in a blackout.
Avoided cost: What it would have cost your utility to generate the power you exported. Usually a small fraction of what you pay them, and the basis for net billing.
Cash price: What a system costs if you pay outright, with no financing. The single most useful number on any quote — ask for it even if you intend to finance.
Cost per watt: Total price divided by system size in watts. The only figure that makes two different quotes comparable. Typically $2.50–$3.50 in 2026.
Critical loads panel: A small subpanel wired to the circuits you actually need in an outage. Backing up these instead of the whole house makes a battery last far longer.
Dealer fee: What a lender charges an installer for offering you a very low interest rate — commonly 15–25% of the system price, recovered by raising your price. Not included in the advertised APR.
Degradation: The slow annual decline in panel output, typically 0.3–0.5% a year. Panels don’t fail on a date; they gradually produce less.
Derate: The allowance for real-world losses — wiring, heat, dust, inverter inefficiency. Usually about 20%. Estimates that omit it come out roughly a fifth too small.
Direct current (DC): What solar panels and batteries produce. Flows one way. Your house doesn’t use it directly.
DSIRE: A free database of state and local energy incentives run by North Carolina State University. The most reliable place to look up what applies where you live.
Escalator: The clause in a lease or PPA that raises your payment every year, typically 1.5–2.9%. It compounds quietly over twenty years.
Grandfathering: Being kept on the old rules when your state changes its net metering terms. Usually applies to systems already connected before the change date.
Ground mount: Panels on a frame in your yard rather than on the roof. Costs roughly 10–20% more, but can be aimed perfectly.
Interconnection: The utility’s formal permission to connect your system to their grid. Required, and separate from your building permit.
Inverter: The box that converts DC from your panels into AC for your house. The brain of the system, and the part most likely to need replacing.
Kilowatt (kW): One thousand watts. How system size is measured. A typical home needs 6–12 kW.
Kilowatt-hour (kWh): One kilowatt used for one hour. What your electric bill charges you for. The average US home uses about 900 a month.
Lease: You rent the equipment monthly. The solar company owns the panels and claims any tax credit.
LiFePO4: Lithium iron phosphate — the battery chemistry used in most modern home and RV storage. Lighter and far longer-lived than lead-acid.
Microinverter: A small inverter behind each individual panel, so one shaded panel doesn’t drag down the rest. Costs more, handles shade better.
MPPT: Maximum power point tracking — a smarter type of charge controller that extracts roughly 20–30% more from the same panels. Worth it above about 200 watts.
NABCEP: The North American Board of Certified Energy Practitioners. The recognized voluntary certification for US solar installers.
Net billing: You’re credited for exported power at a low rate rather than the retail price. Makes using your own power as you generate it much more valuable.
Net metering: The rules governing what your utility credits you for surplus power. Ranges from full retail to a few cents, and it decides whether solar pays off where you live.
Optimizer: A small device on each panel that improves performance under partial shade, working with a string inverter. A middle option between string and microinverters.
Peak sun hours: Hours per day of full-strength sunshine, averaged out. Roughly 4 in the Midwest, over 6 in the Southwest. Drives how big a system you need.
Performance warranty: The manufacturer’s guarantee that a panel still produces a stated percentage of its original output by a given year. Different from a product warranty.
Photovoltaic (PV): The technical name for ordinary solar panels — light converted directly to electricity. Distinguishes them from solar thermal, which makes heat.
PPA (power purchase agreement): You buy the electricity the system produces, at an agreed rate per kWh. The company owns the panels on your roof.
Product warranty: Covers a panel physically failing or being defective. Commonly 25 years.
Production guarantee: A written commitment from your installer to compensate you if the system underdelivers against their estimate. Not all offer one.
Racking: The aluminium framework holding panels to your roof. Outlasts everything else on the system.
Section 25D: The federal Residential Clean Energy Credit — the 30% credit homeowners used for years. Expired December 31, 2025.
Section 48E: The equivalent credit for businesses. Still available, which is why leases and PPAs are now the only route to any federal credit value for homeowners.
Soft costs: Everything that isn’t hardware — permitting, design, inspection, sales, marketing, overhead. Typically 45–65% of what you pay.
Solar generator: Marketing name for a large battery with an inverter and sockets built in. No generator and no fuel involved.
SREC: Solar renewable energy credit — a certificate for each megawatt-hour your system produces, which in some states can be sold for real money.
String inverter: A single inverter handling all your panels together, usually mounted near your breaker panel. Cheaper than microinverters, less good with shade.
Tier 1: A financial ranking of panel manufacturers based on bankability, not a measure of quality. Widely misused in sales conversations.
Time-of-use: A rate structure where electricity costs more at some hours than others. Makes batteries and afternoon production more valuable.
UCC-1: A filing some solar companies place against your property to secure their interest. Shows up in a title search and must be dealt with when you sell.
Watt: The basic unit of power. Solar panels are rated in watts — most are 400–460 today.
Workmanship warranty: Your installer’s guarantee on their own labor, including roof penetrations. The one that depends entirely on the company still existing. Ten years is a good sign.

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Definitions are written for plain understanding rather than technical precision. Where a term has a specific legal or contractual meaning in your own paperwork, that meaning governs.

Solar Glossary

Solar glossary