What does AC/DC mean in solar systems?

AC (alternating current) is the standard electrical power used in homes and the grid. DC (direct current) is what solar panels produce. An inverter converts DC to AC for household use.

What is the Federal ITC for solar?

The Federal Investment Tax Credit (ITC) allows homeowners to deduct 30% of solar installation costs from their federal income taxes. It applies to residential solar panels, batteries, and certain heat pumps.

What is net metering?

Net metering is a billing mechanism where homeowners with solar panels receive credits for excess electricity they send back to the grid, offsetting their consumption charges.

A kilowatt-hour (kWh) is a unit of electrical energy. One kWh equals the energy used by a 1,000-watt device running for one hour. Electricity bills are typically measured in kWh.

Grid parity is the point where solar electricity costs the same as or less than electricity from the utility grid, making solar financially competitive without subsidies.

Clean Energy Glossary

Essential vocabulary for solar, electric vehicles, battery storage, heat pumps, and clean energy incentives. Use the alphabet sidebar to jump to any term.

A

AC/DC (Alternating/Direct Current): AC is the electrical current used by homes and the utility grid, where electrons flow back and forth. DC flows in one direction and is what solar panels produce. An inverter converts DC from solar panels to AC for household use.
AMI (Area Median Income): A federal threshold used to determine eligibility for certain energy rebates and incentives. Many programs offer additional incentives for low-income households below 80% or 150% of the area median income. Your state's DSIRE database lists current AMI limits.

B

Battery Degradation: The gradual loss of battery capacity and performance over time due to charging cycles and age. Most modern lithium-ion batteries retain 80-90% of their capacity after 10 years. Degradation accelerates when batteries are stored at extreme temperatures or charged excessively.
BIPV (Building-Integrated Photovoltaics): Solar technology integrated directly into building materials like roof tiles, windows, or awnings, so the solar panels serve as both power generation and structural elements. More expensive than traditional solar but offers aesthetic advantages.
BOS (Balance of System): All components of a solar system except the panels themselves, including the inverter, wiring, racking, combiner boxes, and disconnect switches. BOS typically costs 20-30% of a residential solar installation.

C

Carbon Footprint: The total amount of greenhouse gases (primarily CO2) emitted to produce or use a product or service, typically measured in tons per year. Solar panels and EVs dramatically reduce household carbon footprints compared to grid electricity and gas vehicles.
COP (Coefficient of Performance): A measure of heat pump efficiency showing the ratio of heating/cooling output to electrical energy input. A COP of 3.0 means the heat pump delivers 3 units of heating for every 1 unit of electricity consumed. Higher COP indicates better efficiency.

D

DC Fast Charging: High-power EV charging (typically 50-350 kW) that bypasses the vehicle's onboard charger to deliver DC directly to the battery. Can add 200 miles in 20-30 minutes but charges more slowly as battery approaches full capacity. Also called Level 3 charging.
Demand Response: Programs where utilities pay customers to reduce electricity consumption during peak demand hours. Smart thermostats and EV chargers can automatically participate in demand response to shift usage to cheaper, off-peak periods.

E

EIA (Energy Information Administration): The official independent statistics agency of the U.S. Department of Energy. The EIA publishes monthly residential electricity rates, consumption patterns, and energy data that form the foundation for all Clean Energy Calculator tools.
EV (Electric Vehicle): A vehicle powered entirely by a rechargeable battery and electric motor, with zero tailpipe emissions. Modern EVs typically cost 30-50% less to operate than gas cars when accounting for fuel and maintenance savings.

F

Federal ITC (Investment Tax Credit): A federal tax incentive allowing homeowners to deduct 30% of qualified clean energy equipment costs from their federal income taxes. Applies to residential solar (Section 48E), some batteries, certain heat pumps, and electric vehicle chargers. No income limit.

G

Grid Parity: The economic point where solar electricity costs equal or less than grid electricity, making solar financially viable without subsidies. Most U.S. regions achieved grid parity by 2022. Some areas now have 'negative parity' where solar is cheaper than utilities.

H

HEEHRA (Home Energy Efficiency Rebate Program): A Department of Energy rebate program providing up to $4,000 for heat pump installation, air sealing, insulation, and other efficiency upgrades. Phased rollout through state energy offices starting in 2024, with enhanced rebates for low-income households.
HOMES Act (Home Energy Rebates): Federal legislation allocating $4.3 billion to state energy offices to administer rebates for heat pumps, air conditioning, water heating, and home insulation. Provides rebates directly at the point of sale instead of tax credits, reaching more homeowners.

I

Inverter: The device that converts DC electricity from solar panels (or batteries) into AC electricity for household use and the grid. String inverters serve an entire array; microinverters are mounted on individual panels. Key component affecting system efficiency and monitoring capabilities.
IRA (Inflation Reduction Act): Landmark 2022 legislation providing $369 billion in clean energy incentives, including expanded federal tax credits for solar, batteries, heat pumps, and EVs. Extended the 30% residential solar ITC through 2032 and created new rebates accessible to renters and moderate-income households.

K

kWh (Kilowatt-Hour): A standard unit of electrical energy consumption. One kWh equals the energy used by a 1,000-watt device running for one hour. Electricity bills are priced in $/kWh. The average U.S. home uses 10,500-11,000 kWh annually.

L

LCOE (Levelized Cost of Electricity): The average lifetime cost to produce one unit of electricity from a power source, accounting for capital costs, fuel, and operation/maintenance. Solar LCOE has fallen 90% since 2010, making it the cheapest electricity source in most regions.
Level 1/2/3 Charging: Three categories of EV charging. Level 1 (120V household outlet) adds 3-5 miles per hour. Level 2 (240V home or public charger) adds 25-30 miles per hour. Level 3 is DC fast charging, adding 200+ miles in 20-30 minutes. See 'DC Fast Charging'.
LFP (Lithium Iron Phosphate): A type of lithium-ion battery chemistry increasingly used in home batteries and EVs. LFP batteries last longer (10,000+ cycles), handle heat better, are safer, and cost less than traditional NCA/NMC batteries, though they have slightly lower energy density.
Load Profile: Your home's hour-by-hour electricity consumption pattern. Load profiles show peaks (typically morning and evening) and valleys (overnight). Understanding your load profile helps optimize solar sizing, battery storage, and demand response participation.

M

MPPT (Maximum Power Point Tracking): Technology in inverters that continuously adjusts voltage to extract maximum power from solar panels across different sunlight conditions. Modern MPPT algorithms improve solar production by 10-25% compared to older inverter designs.

N

NEM (Net Energy Metering): See 'Net Metering.' A billing system crediting homeowners for solar electricity sent to the grid, offsetting daytime production against nighttime consumption. NEM policies vary dramatically by state and utility; some offer full retail credits, others partial.
Net Metering: A utility billing mechanism where solar homeowners receive credits (typically 1:1) for excess electricity they export to the grid. Credits offset consumption charges, making solar systems financial viable. Policies are state and utility-specific; some regions phase out or limit net metering.
Net Zero: A home that produces as much energy annually as it consumes, accounting for solar generation and grid exports. True net zero requires a combination of solar panels, efficiency upgrades, and sometimes battery storage. Differs from 'zero energy' which refers to daily balance.
NREL (National Renewable Energy Laboratory): A U.S. Department of Energy research laboratory providing authoritative solar irradiance data, PVWatts production models, and renewable energy research. Clean Energy Calculator relies on NREL's peak sun hour data and PVWatts v8 for all solar production estimates.

O

Off-Grid: A solar system not connected to the utility grid, typically using batteries for storage. Off-grid systems are more expensive (30-50% higher) than grid-tied systems because they must store multiple days of energy for cloudy weather. Suitable mainly for remote properties.

P

Payback Period: The time required for energy savings to equal the initial cost of a solar, battery, or efficiency upgrade. Most U.S. residential solar systems have a payback period of 6-10 years. After payback, electricity is essentially free for the system's remaining 15-25 year lifespan.
Peak Sun Hours: The equivalent number of hours per day that solar irradiance averages 1,000 W/m². A location with 5 peak sun hours receives the same solar energy as 5 hours at peak intensity. Used to estimate solar production; varies from 3-6 hours daily depending on location and season.
PPA (Power Purchase Agreement): A contract where a third-party company installs, owns, and maintains a solar system on your home, and you buy the electricity at a fixed rate (typically 10-25 year term). Requires no upfront cost but you don't own the system or receive the ITC.
PV (Photovoltaic): Technology that converts sunlight directly into electricity using semiconductor materials. 'PV system' refers to solar panels and associated equipment. 'PV efficiency' measures what percentage of incident sunlight a panel converts to electricity, typically 16-22% for residential panels.

R

ROI (Return on Investment): A percentage measure of profit relative to investment cost. A $20,000 solar system saving $2,000 annually has a 10% ROI. Use the Solar ROI Calculator to determine your system's financial return over time, accounting for your electricity rates and local incentives. Try the calculator

S

Section 25D: The IRS tax code section enabling the 30% federal residential solar ITC. Extended by the IRA through 2032, with no income limit or installation cap. Applies to owned solar systems; renters and low-income households may access similar credits through other IRA provisions.
Section 48E: The IRS tax code section enabling the federal energy storage tax credit. Allows homeowners to claim 30% of battery storage costs when paired with solar. Standalone battery installations are not currently eligible.
SEER (Seasonal Energy Efficiency Ratio): A rating for heat pump and air conditioning efficiency, measured in BTU cooling output per watt-hour of electricity input. Higher SEER means lower operating costs. Modern high-efficiency heat pumps have SEER ratings of 18-20+, compared to 10-14 for older systems.
Solar Degradation: The annual loss of solar panel output, typically 0.5-0.7% per year due to light exposure and weathering. Over 25 years, panels retain 80-85% of original capacity. Modern panels degrade more slowly than older models. Degradation is factored into 25-year production warranties.
Solar Panel Efficiency: The percentage of sunlight a panel converts to usable electricity, typically 16-22% for residential panels. Premium panels reach 22-23%. Efficiency varies by technology (monocrystalline panels are more efficient than polycrystalline). Module efficiency differs from system efficiency, which accounts for inverter and wiring losses.

T

TOU (Time of Use): An electricity rate structure charging different prices for consumption during peak (e.g., 4-9 PM) and off-peak hours. TOU rates incentivize shifting consumption to cheaper periods via smart thermostats, battery charging, and EV charging. Common in California and increasingly in other states.

V

V2G (Vehicle-to-Grid): Technology allowing EV batteries to discharge power back to the grid during peak demand, earning the vehicle owner revenue. V2G requires compatible vehicles (newer models), charging equipment, and utility program enrollment. An emerging revenue stream for EV owners.

W

Watt/kW/MW: Units of electrical power (instantaneous). One watt is one joule per second. A kilowatt (kW) = 1,000 watts (typical home uses 1-2 kW at a time). A megawatt (MW) = 1,000 kW (utility-scale). Watt measures power; watt-hour measures energy over time.

Z

ZIP Code Personalization: Using your home's location to automatically calculate solar irradiance, electricity rates, incentives, and grid carbon intensity. All Clean Energy Calculator tools use ZIP code data from NREL, EIA, and state databases to provide personalized results for your specific location.

About This Glossary

The Clean Energy Glossary is designed to help homeowners, contractors, and energy professionals understand the key terms and concepts in solar, electric vehicles, battery storage, heat pumps, and clean energy policy. Every definition is accessible to non-technical readers while maintaining accuracy for industry professionals.

Our glossary covers four main categories: solar photovoltaic systems and terminology, electric vehicle (EV) and charging concepts, battery and energy storage technology, and federal and state clean energy incentive programs. We also include grid concepts and energy efficiency standards that affect residential clean energy decisions.

Terms like "net metering," "federal ITC," and "payback period" appear throughout our calculators. Understanding these definitions helps you make more informed decisions about solar installation, EV purchase, heat pump replacement, and battery storage investment.

This glossary is updated quarterly as new incentive programs launch and technology terminology evolves. If you encounter a term not yet defined, please contact us through our contact page.