What is Net Metering in solar energy?

Net metering is a billing mechanism that credits solar energy system owners for the electricity they add to the grid. When your panels produce more than you use, the excess goes to the grid, and you get credits on your utility bill.

What is the difference between AC and DC power in solar panels?

Solar panels produce Direct Current (DC) electricity, which flows in one direction. Most homes use Alternating Current (AC). A solar inverter is used to convert the DC electricity from the panels into the AC electricity your home needs.

What are Solar Soft Costs?

Soft costs are the non-hardware costs associated with going solar. They include customer acquisition, permitting, financing, installation labor, and supply chain costs.

What is a Power Purchase Agreement (PPA)?

A Solar Power Purchase Agreement (PPA) is a financial arrangement where a third-party developer owns, operates, and maintains the photovoltaic system, and a customer agrees to purchase the system's electric output for a set period.

What is the Solar Investment Tax Credit (ITC)?

The federal residential solar energy credit is a tax credit that can be claimed on federal income taxes for a percentage of the cost of a solar photovoltaic (PV) system. In 2026, the credit provides a significant reduction in the total cost of going solar.

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Solar Energy Terms & Glossary

Don't let technical solar energy terminology slow you down. Here are the most important solar power terms, solar definitions, and industry buzzwords explained in plain English.

Alternating Current (AC)

The type of electricity used in most homes and businesses. Solar panels produce DC electricity, which must be converted to AC by an inverter.

Battery Storage

A system that stores excess energy produced by solar panels during the day for use at night or during power outages.

Direct Current (DC)

The type of electricity produced by solar panels and stored in batteries. It flows in one direction.

Grid-Tied System

A solar power system connected to the utility grid. This allows you to use grid power when solar isn't enough and send excess solar power back to the grid.

Inverter

A critical component that converts the Direct Current (DC) electricity from solar panels into Alternating Current (AC) used by home appliances.

Kilowatt (kW)

A unit of power equal to 1,000 watts. Solar system sizes are typically measured in kW (e.g., a 6 kW system).

Kilowatt-hour (kWh)

A unit of energy representing the use of one kilowatt for one hour. This is how utilities bill for electricity consumption.

Net Metering

A billing mechanism that credits solar energy system owners for the electricity they add to the grid.

Photovoltaic (PV)

The process of converting light directly into electricity using semiconductor materials like silicon.

Soft Costs

Non-hardware costs associated with solar, such as permitting, financing, and installation labor.

Solar Collector

A device that captures solar radiation and converts it into heat or electricity.

Tier 1 Modules

Solar panels manufactured by companies that meet high standards of financial stability and manufacturing quality.

Array (Solar Array)

A complete solar power generating unit, consisting of multiple solar panels wired together, along with the racking, inverter, and wiring.

Degradation Rate

The rate at which a solar panel loses its efficiency over time. Most top-tier panels degrade by about 0.5% per year, retaining over 85% capacity after 25 years.

Investment Tax Credit (ITC)

A federal tax incentive that allows homeowners and businesses to deduct a percentage of their solar installation costs from their federal taxes.

Microinverter

A small inverter installed on the back of each individual solar panel. They optimize output per panel, making them ideal for roofs with shading issues compared to a central string inverter.

Power Purchase Agreement (PPA)

A financing model where a solar company installs and maintains panels on your property for free, and you agree to buy the generated power from them at a lower-than-grid rate.

Solar Renewable Energy Certificate (SREC)

A tradable certificate representing the clean energy benefits of 1 MWh of solar electricity. In some states, homeowners can sell these to utilities for extra revenue.