This glossary defines common solar and energy-related terms used throughout this guide. Bookmark this section or link to it from any other page to help your team stay fluent in solar.
- AC (Alternating Current)
The standard form of electricity used in buildings and distributed by the electric grid. Alternating current flows in both directions and is produced by inverters or utility-scale generators. - Array (Solar Array)
A group of interconnected solar panels that work together to generate electricity. Arrays may be mounted on rooftops, parking structures, or the ground. - BMS (Building Management System)
A centralized platform used to control, monitor, and optimize building operations such as HVAC, lighting, and energy use – sometimes integrated with solar or battery systems. - BNEF (Bloomberg New Energy Finance)
An industry research firm that publishes the Tier 1 list of solar panel manufacturers, based on bankability, production capacity, and market presence. - BOS (Balance of System)
All supporting components of a solar PV system aside from the panels and inverters. Includes wiring, racking, monitoring, disconnects, and safety hardware. - DC (Direct Current)
The type of electricity produced directly by solar panels. It flows in one direction and must be converted into AC to be used in most commercial applications. - DSIRE (Database of State Incentives for Renewables & Efficiency)
A comprehensive online resource tracking clean energy incentives, tax credits, and rebate programs by state. Website: dsireusa.org - EMS (Energy Management System)
A digital system that monitors, controls, and optimizes energy use within a facility – sometimes working alongside solar and battery systems to reduce peak demand or energy waste. - HVAC (Heating, Ventilation, and Air Conditioning)
Mechanical systems responsible for indoor climate control in commercial buildings – often a major driver of electricity usage. - Inverter
A device that converts the DC electricity generated by solar panels into AC electricity used by your building or the grid. - IRA (Inflation Reduction Act)
A 2022 U.S. law expanding clean energy tax incentives. It includes a 30% Investment Tax Credit (ITC) for solar, plus additional bonus credits based on project location, labor standards, and materials sourcing. - ITC (Investment Tax Credit)
A federal solar incentive that allows system owners to deduct a percentage of solar project costs from their taxes – currently 30% through 2032. - kW (Kilowatt)
A measure of power – how fast electricity is being generated or consumed at any given time. 1 kW = 1,000 watts. - kWh (Kilowatt-Hour)
A measure of energy – how much electricity is used or produced over time. Utilities bill customers based on kWh usage. - LED (Light Emitting Diode)
A highly efficient lighting technology that uses a fraction of the electricity of older bulb types. Frequently used in energy efficiency upgrades. - LEED (Leadership in Energy and Environmental Design)
A globally recognized green building certification developed by the U.S. Green Building Council (USGBC). Solar energy can contribute points toward certification. - LCOE (Levelized Cost of Energy)
The average cost per kilowatt-hour (kWh) of energy produced by a solar system over its lifetime. Used to compare solar to utility rates. - MACRS (Modified Accelerated Cost Recovery System)
A federal depreciation method that allows businesses to recover solar equipment costs through accelerated tax deductions – typically over 5 years. - Net Metering
A billing arrangement where excess solar energy sent to the grid earns the system owner energy credits. These credits offset grid power usage at other times. - PACE (Property Assessed Clean Energy)
A financing mechanism where the cost of solar or energy upgrades is repaid through a special assessment on your property tax bill. Often requires no upfront payment. - PPA (Power Purchase Agreement)
A contract where a third party owns the solar system and sells the electricity to you at a fixed rate, often lower than utility prices. Common for those who can’t utilize tax incentives directly. - SRECs (Solar Renewable Energy Credits)
Tradable certificates earned by generating solar energy. One SREC = 1 MWh. In some states, utilities buy SRECs to meet renewable energy requirements. - Solar Module (Solar Panel)
A device composed of photovoltaic (PV) cells that convert sunlight into direct current (DC) electricity. Multiple modules form an array. - ROI (Return on Investment)
A measure of financial return. In solar, ROI refers to the total savings or earnings from a system over time relative to its cost. - Tier 1 Manufacturer
A solar panel or inverter brand recognized by BloombergNEF as having a strong financial track record, high-quality manufacturing, and global bankability. - TPO (Third Party Ownership)
Any solar financing structure where a third party owns the system – such as PPAs or leases – while the host site pays for the electricity produced or leases the equipment.