AC (Alternating Current)

The type of electricity that is supplied to your home from the Utility Company. AC power is able to flow in multiple directions and change voltage. Homes in the US that get their electricity from the utility company are wired for AC power, allowing you to turn off, turn on, increase and decrease the power supply as needed. The US electricity grid uses AC power because it can be transmitted over greater distances and enables utility companies to increase or decrease the amount of electricity being sent.



A key component when it comes to having an off-grid system. Can also be used as backup during an electrical grid power outage. Batteries are used as storage for excess energy produced by your system.


Degradation Rate

Refers to how much power output a solar panel loses over time. Typically, this is measured against the life expectancy of a panel and is caused by unavoidable external factors like UV exposure and weather changes. High-quality panels should degrade, on average, by 0.25% – 0.7% annually. Most panels come with a production warranty of 25 years that guarantees your panels will still produce at a specific percentage at the end of its expected lifetime. High-quality panels are typically 85% or higher after 25 years.

DC (Direct Current)

The type of electricity that is produced by a single source, such as a battery.  DC power only travels in one direction and has a constant voltage level.  This is the power that is generated by your solar panels when it absorbs the sun’s rays.  DC power is then converted to AC power by the inverter in order to be used in your home.


Electricity Grid (US Electricity grid)

A complex machine where the electricity that is generated from various power sources, like power plants, is sent and then delivered to neighborhoods. A typical home will draw its electricity from the grid. The amount of electricity you need or use is measured and delivered by your utility company.



Refers to a home’s connection to the utility grid. Grid-tied homes are connected to their utility company’s grid. Excess electricity produced by their solar systems will be sent back to the grid, which in turn receive credits from their utility company. During a neighborhood power outage, grid-tied homes will still be affected by it, despite having a solar system.



An electronic device that changes the DC electricity from your panels to AC electricity, which is compatible with your home. The AC power is fed into your home’s Main Electrical panel and is used to power your home.

Investment Tax Credit (ITC)

One of the most important federal policies enacted to support the growth of solar energy in the United States. As of 2021, the ITC provides a 26% tax credit for solar systems on residential and commercial properties.


Kilowatt (kW)/Watt (W)

A standard unit for measuring electrical power. 1 kW = 1,000 W

Kilowatt Hours (kWh)

A measure of energy used commonly throughout the solar energy vocabulary. Used as the unit for energy produced by your system.



A smaller power inverter that is attached to each individual solar panel and works independently from other microinverters.

Monocrystalline Panels

Generally thought of as the premium option for solar panels. Monocrystalline panels have a higher efficiency rate and sleeker finishes.


NEM (Net Energy Metering/Net Metering)

A billing mechanism utility companies use that allows customers to send surplus energy generated by their solar panel systems to the utility grid for credits. These credits can be used to offset the cost of the electricity pulled from the utility grid when the solar panel system is not generating power, like throughout the evening. The credits and charges are tracked on a monthly basis and are settled up every 12 months in a True-Up Statement.



Refers to a home’s connection to the utility grid. Off-grid homes have a storage battery, allowing them to have no connection to the grid. By having a storage battery on the property, excess electricity will be sent to that battery instead of the grid. During a neighborhood power outage, off-grid homes will not be affected due to them being disconnected to the grid, and being able to use their excess energy stored in their batteries.


PACE (Property Assessed Clean Energy financing)

A government program that allows you to borrow against the equity of your home for Clean Energy Projects. It is a great option for people with low FICO scores but have equity in their home.

Polycrystalline Panels

Polycrystalline panels generally have lower efficiencies than monocrystalline panels, however, they are offered at a lower price point.

PPA (Solar Power Purchase Agreement)

A solar financing option where the solar installer will install a solar panel system on your roof and sell the generated electricity to you at a lower rate than your utility company’s retail rate. This agreement usually lasts between 10 to 25 years. During that time, the installer will be responsible for the operation and maintenance of the solar panel system on your roof. 


Solar Energy

The energy that is converted from the sun’s radiation into thermal and electrical energy

Solar Lease

A solar financing option where you pay a fixed monthly payment for the duration of the lease term, in return for use of the system. Can last 20-25 years.

Solar Panels

A panel made up of cells that can absorb the photons from sunlight and converts them into usable DC electricity. This electricity is fed into an inverter that converts it to AC electricity, which is compatible with your home.

Solar Panel Efficiency

A measurement of a solar panel’s ability to convert sunlight into usable electricity. It is determined by the production of electricity by individual solar cells, but the higher the efficiency, the more electricity it will produce. Most solar panels are between 15% – 20%, but some high-quality solar panels can exceed 22% in some cases.

Solar Photovoltaic (PV) System

When one or more solar panels are combined with an inverter and other hardware to convert the sun’s energy into usable electricity for your home.


True Up Statement

an annual bill that solar system owners receive at the end of the 12th month of their billing cycle. It reconciles the cumulative credits you earned from sending electricity to the grid and charges you incurred for using electricity from the utility company. If you owe a balance, you’ll need to pay it off. And if you surplus credits, it will be reset to 0 and your 12-month cycle starts again.


Watt (W)/Kilowatt (kW)

a standard unit for measuring electrical power. 1 kW = 1000 W