Solar terms, explained by what they change
The terms you will meet in quotes and calculators. Each page says what the term means and what it changes about your decision. For the step-by-step version, read the guide to going solar.
kW vs kWhkW is how big a system is (its power at full sun). kWh is how much energy it makes over time — the unit on your bill.Peak sun hoursThe day’s sunlight squeezed into hours of perfect 1,000 W/m² sun. 5 peak sun hours = 5 kWh of sunlight per square metre per day.TiltThe angle of the panels from horizontal. Rooftop panels usually just follow the roof’s pitch — and a few degrees off “optimal” costs very little.AzimuthThe compass direction panels face: 180° is south, 90° east, 270° west. South is best in the U.S.; east and west typically lose 10–20%.DC/AC ratioPanel capacity divided by inverter capacity. 1.2 means 20% more panel watts than inverter watts — normal, because panels rarely hit their rating.ClippingWhen panels could make more power than the inverter can pass, the extra is “clipped”. Usually a 0–3% annual loss at normal DC/AC ratios.Net metering vs net billingNet metering credits the solar you export at about the retail price. Net billing credits exports at a much lower rate, so using solar yourself matters more.Self-consumptionThe share of solar energy used in your home as it is produced (or via your battery), rather than exported to the grid.Usable capacityThe energy a battery can actually deliver. Home batteries usually quote usable kWh; portable power stations lose ~10–15% converting to AC.Round-trip efficiencyEnergy out ÷ energy in. ~90% for modern lithium home batteries: store 10 kWh of solar, get about 9 kWh back.Microinverters vs string invertersString inverters convert a whole row of panels at once (cheaper); microinverters convert each panel (better with shade, per-panel monitoring).System lossesEverything between perfect panels and your meter: dirt, wiring, mismatch, downtime, shade. PVWatts’ default is 14%; Solar Plan Builder uses the same breakdown.DegradationPanels slowly lose output — about 0.5% per year for modern modules. After 25 years, expect roughly 88% of original output.Specific yieldYearly kWh produced per kW of panels. It captures sunshine, climate and orientation in one number: ~1,100 in Seattle, ~1,750 in Phoenix.PaybackYears until cumulative bill savings equal what you paid. Driven by price per watt, local sunshine, electricity price and export rules.Cost per wattTotal installed price ÷ system DC watts. Lets you compare quotes of different sizes. Typical U.S. quotes: about $2.50–$3.75/W before incentives.OffsetSolar production ÷ your annual use. 100% offset makes about as much as you use in a year — not every hour or month.Permission to operate (PTO)Written approval from your utility that your system may connect to the grid. It comes after the city inspection, and you must not switch on before it.InterconnectionThe utility’s process for approving a system that connects to its grid: an application, an agreement and, at the end, permission to operate.Time-of-use ratesRates that charge more in the late afternoon and evening. Solar makes most at midday, so time-of-use rates make batteries and evening savings more valuable.Dealer feeA fee the lender charges the installer to offer a low interest rate. It is usually built into the system price, so you pay it without seeing it.Lease vs PPATwo ways to get solar with no money down. A lease is a fixed monthly payment; a PPA is a price per kWh. Someone else owns the panels either way.Rapid shutdownAn electrical-code requirement that rooftop solar can be de-energised quickly so firefighters can work safely. It is why most U.S. systems use microinverters or optimizers.Main panel upgradeSolar feeds power into your main electrical panel. Older or smaller panels may not be allowed to accept a large system without an upgrade, which can add $2,000–$4,000.Community solarYou subscribe to a share of a local solar farm and get credits on your electricity bill. Good for renters, shaded roofs and people who plan to move.