Solar quotes and articles are full of jargon. Here are the terms you’re most likely to run into, in plain English.
A
AC (alternating current). The kind of electricity your home and the power grid use. Solar panels produce DC power, and an inverter converts it to AC.
Anti-islanding. A safety feature that makes grid-connected inverters shut off when the grid goes down, so they don’t send power onto lines that utility crews may be working on. It’s the main reason most solar systems stop working in a blackout. See will solar panels work during a power outage.
Array. All of the solar panels in a system, or a group of panels wired together.
Azimuth. The compass direction your roof or panels face. In the U.S., south-facing panels usually produce the most power over a year, with east and west close behind.
B
Backup gateway. Equipment that disconnects your home from the grid during an outage so a battery or generator can power it safely. Also called a transfer switch.
Battery (home battery). Stores electricity for use later, such as at night or during an outage. Most home batteries sold today use lithium iron phosphate (LFP) cells. See solar backup batteries explained.
C
Charge controller. A device that manages the power flowing from solar panels into a battery so the battery isn’t overcharged. Common in off-grid, RV and boat systems.
Critical loads panel. A separate electrical panel holding the circuits you want a battery to keep running during an outage, such as the fridge, lights and internet.
D
DC (direct current). The kind of electricity solar panels produce and batteries store.
DC-to-AC ratio. The size of the panel array compared with the size of the inverter. Home systems are commonly designed with a ratio of about 1.1 to 1.3, meaning the panels are slightly larger than the inverter.
Dealer fee. A fee a solar lender charges the installer for offering its loan, usually built into the system price. The Consumer Financial Protection Bureau found these fees often add 10% to 30% to the cash price.
Degradation rate. How much output solar panels lose each year as they age. A widely cited NREL study found a median of about 0.5% per year, and many newer panels are warrantied to lose less.
E
Escalator. A yearly increase built into a solar lease or PPA payment, often 1% to 3%.
Export rate. What your utility pays or credits you for the solar power you send to the grid.
H
Hybrid inverter. An inverter that manages solar panels, a battery and the grid connection in one unit.
I
Interconnection. Your utility’s process for reviewing and approving a solar system before it connects to the grid.
Inverter. The device that converts DC power from your panels into AC power your home can use. See what kind of solar inverter do I need.
K
Kilowatt (kW). A unit of power equal to 1,000 watts. Solar system sizes are usually given in kilowatts, such as an 8 kW system.
Kilowatt-hour (kWh). A unit of energy: one kilowatt of power used for one hour. Your electric bill charges you by the kWh, and solar production estimates are given in kWh per year.
L
Lease (solar lease). A contract where a company owns the panels on your roof and you pay a fixed monthly fee to use them. See solar lease vs. loan vs. cash.
M
Microinverter. A small inverter mounted under each panel. Because each panel works on its own, shade on one panel doesn’t drag down the rest.
Monocrystalline. Solar cells cut from a single crystal of silicon. Nearly all panels sold today are monocrystalline. See monocrystalline vs. polycrystalline.
N
Net billing. A billing setup where solar power you export is credited at a lower rate than you pay for power from the grid. California moved new customers to net billing in 2023.
Net metering. A billing setup where solar power you send to the grid is credited against the power you use, often at the full retail rate. Each state sets its own rules. See types of electric meters used with solar.
O
Off-grid. A system with no connection to the utility grid, relying on batteries and often a backup generator. See can solar panels help you go off the grid.
P
Payback period. How long it takes for the money you save on electricity to add up to what you paid for the system. See how long solar takes to pay for itself.
Peak sun hours. The number of hours in a day that would add up to the day’s total sunlight if the sun shone at full strength (1,000 watts per square meter). Installers use it to estimate how much a system will produce.
Performance warranty. A manufacturer’s promise that panels will still produce a set share of their rated output after a certain number of years, usually 25 or more.
Permission to operate (PTO). The utility’s official approval to switch on your solar system. Installers usually request it after the final inspection.
Polycrystalline. An older type of solar cell made from many silicon crystals. It has largely disappeared from the market.
Power optimizer. A small device on each panel that adjusts its DC output before sending it to a central inverter. Optimizers help with shade and allow panel-level monitoring.
PPA (power purchase agreement). A contract where a company owns the panels on your roof and you pay a set price for each kWh they produce.
Price per watt. A system’s total price divided by its size in watts. It’s the easiest way to compare quotes for systems of different sizes. See how to compare solar quotes.
Product warranty. A manufacturer’s warranty against defects in the equipment itself.
PVWatts. A free online calculator from the National Laboratory of the Rockies (formerly NREL) that estimates how much a solar system will produce at a given address.
R
Rapid shutdown. A National Electrical Code requirement that lets the wiring on a rooftop system be de-energized quickly, mainly to protect firefighters.
REC and SREC. A renewable energy certificate represents one megawatt-hour of renewable electricity. In some states, solar owners can sell these certificates (called SRECs in some markets) for extra income.
Residential Clean Energy Credit. The 30% federal tax credit for home solar, batteries and some other equipment (Section 25D of the tax code). It ended for systems installed after December 31, 2025. See is solar still worth it without the tax credit.
S
Solar access law. A state law that limits how far homeowners associations and others can restrict solar panels. See HOA and permit approval.
String inverter. A single central inverter that handles the output of a group, or string, of panels. It’s usually the cheapest option but is more affected by shade.
T
Time-of-use (TOU) rates. Electricity prices that change with the time of day, usually highest in the late afternoon and evening.
TOPCon. Short for tunnel oxide passivated contact, a type of silicon solar cell. It made up about three quarters of the world’s solar cell production in 2025.
True-up. The yearly settlement under some net metering plans, when your utility reconciles a year of credits and charges.
V
Virtual power plant (VPP). A program that pays home battery owners to let a utility or company draw on their stored energy when demand is high.
W
Watt (W). A unit of power. Solar panels are rated in watts, and most home panels sold today are rated around 400 to 450 watts.
Workmanship warranty. The installer’s warranty on the installation itself, including problems like roof leaks around mounts. Lengths vary widely between companies.