Solar Systems and Industry Terminology


Energy Audit:  A survey, inspection, and analysis of energy uses and losses in a building, or system, usually with the goal of reducing the amount of energy needed by the building or system.  A good energy audit for a residence should include a blower door test to measure the air leakage of the structure, and it’s desirable to have the audit include infrared imaging as well.

Energy Conservation:  Saving energy through actions that reduce the use of energy, such as reducing the number of hours a home is heated, lowering the thermostat, and turning on fewer lights.  This doesn’t mean a change in how much energy is consumed for the desired service, but rather making behavior changes that reduce the use of the service.

Energy Efficiency:  Energy efficiency means using less energy to get the same service.  For example, an LED lightbulb will produce as much light as an incandescent using only one-tenth the amount of electricity.  Improving the efficiency of a home or business can reduce its electric consumption, which reduces the size of solar system needed to meet the power needs. Switching to Energy Star and other equipment designed for high energy efficiency can also reduce energy demand.

Energy Star:  A standard for energy efficient consumer products, created in 1992 by the Environmental Protection Agency and the US Department of Energy.  (Trademarked ENERGY STAR.)

Grid-tied:  A grid-tied solar system is wired to the utility’s transmission grid, i.e., the interconnected network for delivering electricity from the utility to homes and buildings throughout its service area.  Grid-tied is also referred to as grid-interconnected.  Being interconnected with the grid permits residential or commercial customers to feed excess electricity they generate back onto the grid, and to receive electricity from the grid when needed.  Grid-tied systems do not require a battery backup system.

Kilowatt (kW):  One thousand watts, a measure of electrical power.

Kilowatt hour (KWh):  A unit of electrical energy defined as the delivery of a kilowatt of electrical power for the time period of 1 hour

Inverter:  A solar inverter, or PV inverter, is an electronic device that converts the direct current (DC) output of a photovoltaic (PV) solar panel into alternating current (AC) that can be fed into a standard utility electrical grid.

Net Metering:  Net metering measures the difference between the amount of renewable energy a customer generates using their own equipment such as solar, or wind, and the amount energy a customer purchases from their utility.  In Kentucky, this computation is done monthly for a system that is net metered, and if the customer has generated more than they used in the month, a credit is applied to offset future bills. If the customer produces less than what is used they are billed for the difference. The net metering billing schema can be only be used with grid-tied systems.

Net Zero Energy:  Shorthand for a structure which generates as much energy as it consumes, thereby having “Net Zero Energy” consumption.

On Bill Financing:  A financing structure for energy efficiency measures which arranges payments on the loan to be made as part of the structures’ utility bill for the loaned capital.

PhotoVoltaic (PV) module:  See solar panel.

Renewable Energy:  Generally is defined as energy that comes from resources which are naturally replenished on a human timescale such as sunlight, wind, rain, tides, and waves.  Can be used to replace fossil fuel energy for electricity generation and heating hot water.

Solar array: A group of solar panels wired together that constitute the solar array of a photovoltaic system.

Solar cell: A photovoltaic cell or device that converts solar radiation into electrical energy.

Solar panel:  A solar panel is a term referring either to a solar photovoltaic (PV) module, or to a solar hot water panel.  A PV panel or module is a packaged, electrically connected assembly of solar cells, typically in a 6×10 cell configuration.  Solar PV panels are then wired together to form an array. The panels are rated by their DC output power, which typically ranges from 100 to 320 watts. Solar hot water systems are typically one of three types: flat plate collector, integral collector storage system or batch system, and evacuated tube solar collector.

Solar PV:  A photovoltaic system (informally, PV system) is an arrangement of components designed to supply usable electric power for a variety of purposes using the sun as the power source. A photovoltaic system for residential, commercial, or industrial energy supply normally contains an array of photovoltaic (PV) modules, one or more inverters to convert direct current to alternating current, a racking system that supports the solar modules, electrical wiring, and mounting for other components.

Solar Renewable Energy Credit (SREC):  SRECs exist in states that have legislated a Renewable Portfolio Standard (RPS) or Renewable Energy and Efficiency Portfolio Standard (REEPS) with specific requirements for solar energy.  A Solar Renewable Energy Credit (SREC) is documented by a certificate that shows a certain amount of electricity was produced using solar energy, conventionally certifying 1,000 kWh of solar energy. Solar system owners can recover some of their investment in solar equipment by selling their SREC certificates to the regulated entities (utilities) that need the documentation to show compliance with meeting their solar energy goals required by a RPS or REEPS, often handled through a brokerage firm. The additional income that can be generated from selling SRECs increases the economic value of a solar investment and assists with the financing of solar technology.

Watt:  A watt is a unit of power; e.g., 1 watt equals 1 volt x 1 ampere of current.  A kilowatt is 1000 watts (kW).


Demand Side Management (DSM):  A label for efficiency measures which reduce or “manage” customer demand for electricity. Electric utilities frequently use the term DSM as a shorthand for their customer efficiency program offerings.

Distributed generation:  Distributed or decentralized generation provides electricity from many small energy sources rather than a central power plant, usually renewable, such as rooftop solar.  It is conducive to carbon-free generation without burning fossil fuels, which provides reduced environmental impacts and improves the security of supply, due to the multiple sources.

EPAD Energy Project Assessed District:  Also known as PACE (see below).  A means to finance energy efficiency upgrades and renewable energy installations. Money loaned to consumers and businesses for solar systems and energy efficiency upgrades is tied to and paid back with property taxes. This means the building owner has no upfront cost and the loans are tied to the property, not an individual. The loan may be set  for a period of 20 years or more. If the loan payments are less than the energy savings, the property owner has an immediate net gain.

Feed-in Tariffs (FIT):  Feed-in-Tarrrifs are a policy tool that encourages investment in renewable energy technologies. A Feed in Tariff program offers a payment guarantee at higher than retail to renewable energy developers for the energy they produce for a period of time, typically 10 to 20 years.

Fossil Fuel:  Fuels formed by decomposition of buried dead organisms. The age of the organisms and their resulting fossil fuels is typically millions of years.  Fossil fuels contain high percentages of carbon and include coal, petroleum, and natural gas.

Geothermal Energy:  Thermal energy stored in the Earth.  The hot temperatures in the core of the planet can provide useful energy for producing industrial steam in some locations of the USA, mostly near the Rocky Mountains.

Geothermal Heat Pump:  A piece of equipment that transfers heat into or from the ground, through a circulating liquid transfer medium.  Also known as a ground source heat pump.  It uses earth as a heat sink (in the summer, when cooling is desired) or as a source of warmth (in the winter).  The engineering and scientific communities prefer the term “ground source heat pump” to avoid confusion with traditional geothermal power, which uses high temperatures deep in the earth to generate steam for electricity.

Greenhouse Gas:  A greenhouse gas (sometimes abbreviated GHG) is a gas in the earth’s atmosphere that absorbs and emits heat radiation.  Greenhouse gases usually tend to retain heat on the surface of the earth.  The primary greenhouse gases in the Earth’s atmosphere are water vapor, carbon dioxide, methane, nitrous oxide, and ozone.  Greenhouse gases affect the climate of the Earth.

Landfill Methane:  Methane gas which is created by fermentation in a landfill.  Can be used as a fuel for electric generation.

Levelized cost:  Is the net cost, averaged over the equipment’s lifetime, to build or install an energy system plus of all the operating and fuel costs, divided by its expected lifetime energy output.  Units are cents per kilowatt hour for electric generating equipment.  Typically the levelized cost for natural gas combined cycle power plants is in the range of 10-16 cents per kWh.  Solar generation is often in a levelized cost range of 10-18 cents per kWh at utility scale.

Megawatt (MW): a unit of power equal to one million watts, especially as a measure of the output of a power station.

Megawatt hour (MWh):  A unit of electrical energy defined as the delivery of one megawatt (MW or million watts) of electrical power for the time period of 1 hour.

Passive House:  Refers to a rigorous, voluntary standard for super energy efficiency in a residential building, resulting in buildings that require little energy for space heating or cooling.

Property Assessed Clean Energy (PACE):  PACE is a means of financing energy efficiency and renewable energy upgrades for buildings.  In areas with PACE legislation in place, municipal governments make loans to consumers and businesses to finance energy efficiency andretrofits or install solar equipment. The loans are repaid over the assigned term (typically 15 or 20 years) via an annual assessment on their property tax bill.  One of the most notable characteristics of PACE programs is that the loan is attached to the property rather than an individual.

Public Service Commission:  The State agency which has the task of regulating monopoly utilities within Kentucky.

Renewable Energy Credit (REC): A Renewable Energy Credit (REC) is something like a stock certificate for energy production: One REC, or SREC with solar power (see above), is earned when one megawatt-hour of wind or solar energy is generated. The REC or SREC is sold separately from the electricity – if there is a feed-in tariff, and its value is determined by the market subject to supply and demand constraints. RECs or SRECs can be sold to electric utilities in states that have an RSP or REEPS (next definition), to help them meet their RPS or REEPS requirement. A fine can be applied if a utility doesn’t meet its target.

Renewable Energy and Efficiency Portfolio Standard (REEPS):  Combines a renewable portfolio standard with a specified energy efficiency standard.

Renewable Portfolio Standard (RPS):  A Renewable Portfolio Standard (RPS) is a regulation or law in some states that requires electric utilities to secure a portion of their electricity from renewable energy, in order to increase their production of energy from renewable sources.  An RPS requires the production of a specified level of energy, usually electricity, from specified renewable energy sources, such as wind, solar, hydro, and biomass and other alternatives to fossil fuels and nuclear electric generation. Another common name for the same concept is Renewable Electricity Standard (RES) in the United States.

Supply-side Management:  A label for the efficiency measures which a utility can do on the utility side, the “supply side,” of electric meters to manage the amount of generation needed to maintain reliable electric flow to the customers.

Third Party leasing:  The practice of using a company to provide financing and leased equipment to consumers who want solar electricity without the up-front expense and challenges of purchasing a photovoltaic solar system themselves.Third party leasing is generally easier on the front end but more expensive in the long-term.

Watt:  A watt is a unit of power, equivalent to one joule per second, which corresponds to the power in an electric circuit in which the potential difference is one volt and the current, one ampere.  A kilowatt is 1000 watts (kW).

Weatherization: Modifying a building’s thermal properties to reduce energy consumption and optimize energy efficiency.  Typically used in reference to residential dwellings. Can include additional insulation, air sealing, addressing the efficiency of the heating and cooling systems, and other measures.


DEDI:  KY Department of Energy Development and Independence, part of the KY Energy and Environment Cabinet

KHP:  KY Home Performance (KHP) is a home energy efficiency improvement program administered by the Kentucky Housing Corporation

KRS:  Kentucky Revised Statutes

KYSES: KY Solar Energy Society

MACED:  Mountain Association for Community Economic Development

PSC:  Public Service Commission

REEPS:  Renewable Energy and Efficiency Portfolio Standard

RPS:  Renewable Portfolio Standard

TVA:  Tennessee Valley Authority, a multi-state quasi-public electric utility

US EPA:  US Environmental Protection Agency, a Federal agency