Solar 101 / Glossary


AC system output

AC system ouput defines the power output of a photovoltaic system after converting the generated DC photo current into AC grid power via inverter. Since the conversion is a lossy process the AC system output is always smaller than the generated DC output from the panels.

Asset finance

Assest finance refers to the use of a company's balance sheet assets to borrow money. Those assets can include short-term investments, inventory and accounts receivable.


Azimuth describes the orientation of something with respect to a compass needle, 0° azimuth being exactly north. Since solar panels should always be oriented in the direction that maximizes exposure to solar radiation the optimal azimuth in the northern hemisphere is 180° (facing south). In the southern hemisphere azimuth values should be close to 0°. 


Building Integrated PV (BIPV)

One talks about building integrated PV if the solar panels are directly incoporated in the fabric of the building (roof or walls).


Carbon footprint

A carbon footprint is historically defined as "the total set of greenhouse gas emissions caused by an [individual, event, organisation, product] expressed as CO2e." - Wikipedia. CO2e being the carbon dioxide equivalent. 


DC / AC ratio

Defines the ratio between input- and output voltage of an inverter, which converts direct current (DC) into alternating current (AC). The inverse of this ratio is also known as the inverter efficiency.

Deprecation tax benefits

Depreciation tax benefits are income tax deductions that allow taxpayers to recover the cost of certain property. It is an annual allowance for the wear and tear, deterioration, or obsolescence of the property. For solar systems deprecation is an important factor that reduces the effective cost of a system for a business.

Diffuse horizontal irradiance (DHI)

Diffuse Horizontal Irradiance (DHI) is the amount of scattered solar radiation received by a surface per unit area. This includes especially scattered light from molecules and aerosols in the atmosphere but also radiation that was reflected from other surfaces.

Direct normal irradiance (DNI)

Direct Normal Irradiance (DNI) is the amount of solar radiation received per unit area by a surface perpendicular to the incoming sun rays.


Feed-in tariff (FiT / FIT)

Feed-in tariff refers to government incentives created to accelerate investment in renewable energy sources. It defines the price per kWh producers of renewable energy (solar, wind, etc.) get paid for feeding generated green energy to the grid (sometimes FiT also applies for energy that is consumed by the producers themselves). The price is adapted to the cost of production and also fixed over several years to tens of years (sometimes with a pre-defined degression rate), so that investing in renewables becomes feasible and predictable.


Global horizontal irradiation (GHI)

Global Horizontal Irradiance (GHI) is the total amount of shortwave radiation received from above by a surface horizontal to the ground. This value is of particular interest to photovoltaic installations and includes both Direct Normal Irradiance (DNI) and Diffuse Horizontal Irradiance (DHI).

Ground coverage ratio (GCR)

The Ground Coverage Ratio (GCR) is the ratio between the total area on the roof or on the ground covered by the system and the combined area of all installed solar panels. The GCR typically gives an idea about the spacing between the cells but is also dependent on orientation and tilt of the panels. 



An incentive is a tax advantage or subsidy from the government to motivate individuals or entire industries to perform actions or develop technology that would otherwise not be feasible in an economic sense. Many countries or states offer incentives for renewable energy projects to reduce the emission of CO2 and other greenhouse gases to counteract global warming.

Internal Rate of Return (IRR)

The Internal Rate of Return is a method of calculating the effective return rate for a loan. It does not incorporate environmental factors like interest rate or inflation, hence internal.


An inverter is an electronic component that converts direct current (DC) to alternating current (AC). An inverter is essential to connect a solar system to the grid or use it to power electronics. The conversion is a lossy process and yields the converter efficiency or DC / AC ratio.


Kilowatt peak (kWp)

Kilowatt peak stands for the maximum output power of a photovoltaic system, which is achieved when under full solar irradiation. It is usually denoted by adding a lower case p to the regular energy unit kW > kWp. The peak performance of a system is measured under standard conditions of 1000 Watts per squre meter solar radiation.



Latitude is an angle between -90° and +90°. It defines the geographic position of a point on the globe in North-South direction. -90° refers to the geographic South pole, 0° to the equator and +90° to the geographic North pole. Important to note here is that the geographic poles do not exactly correspond to the poles of Earth's magnetic field. In terms of solar energy the latitude plays an important role with regards to daily exposure to solar irradiation.


Longitude is an angle between -180° and +180°. It describes the geographic position of a point on the globe in East-West direction. Points with the same longitude define so-called meridians (semi-circles connecting the North- and the South pole on the shortest path). The 0°-meridian is defined to be one that runs through the Royal Observatory in Greenwich, England. Longitudes East of Greenwich are positive, longitudes West of Greenwich are negative.


Net metering

Net metering is a special way of billing consumers that produce their own energy. It allows them to feed the excess energy they produce into the grid and use it later on demand without charge. At the end of the billing cycle they only have to pay for surplus energy they consumed.


Panel area

Panel area refers to the total area of one or more solar modules, including structural parts that do effectively not produce energy.

Panel efficiency

Panel efficiency relates to the ratio between incident solar energy and electrical output of the panel. The efficiency is dependend on many factors like thickness and number of layers, number of manufacturing errors in the cells, mono- or polycrystalline structure of the cells etc. In general one can say, the higher the quality of a cell the higher the efficiency and also the higher price. Modern, commercial cells usually have efficiencies between 14 and 23% (polycrystalline: 14-17%, monocrystalline: 15-20%, premium cells up to 23%). 

Photovoltaic degradation rates

The degradation rate of photovoltaic systems describes the loss of efficiency of the panels over their lifetime. Reasons for the declining performance are mostly field failures caused by corrosion and interconnect breakage, but also wear and tear of electrical components. A study conducted by NREL has summerized literature reports comprising measurements of more than 2000 systems and found that the average (mean) degradation rate lies at 0.8% and the median at 0.5%.

Photovoltaics (PV)

Photovoltaics or PV generally describes the conversion of light into electricity using semi-conducting materials designed to harness the photovoltatic effect. In common language the term is also simply used for photovoltaic installations and solar panels.

Power purchase agreement (PPA)

A power purchase agreement (PPA) defines all commercial terms between an electricity producer and an electricity buyer, i.a. revenue and credit quality.


Renewable energy

Renewable energy is generally defined as grid energy generated from resources which are naturally restored by the ecosystem on a human timescale. The most common forms are solar energy, wind energy, hydroelectric energytidal energy, wave energy, and geothermal energy


Satellite data

Satellite data can refer to raw or processed information originating from sensors mounted on satellites. If the data can be visualized in images without any further processing one usually talks about satellite imagery. The advantage towards aerial data or imagery usually is the global coverage.

Satellite imagery

Satellite imagery is the final product that results from processing optical or radar data from sensors mounted on satellites. Satellite imagery can (but doesn't have to) be geocoded or contain several layers of different spectral ranges from visible light to infrared (multispectral). Imagery with only one layer of color information is called pan-chromatic and imagery with many spectral bands and a fine spectral resolution is usually referred to as hyper spectral. The most important parameter of satellite imagery is the resolution. It defines the size of the smallest features that can be resolved on an image. Imagery that resolves single cars or rooftop features falls under the category high-resolution imagery.

Solar constant

The solar constant gives the flux density of solar radiation measured above the atmosphere. More generally it represents the solar power measured per unit area that is absorbed by our planet. It varies slightly with solar activity but can be seen as almost constant at a value of ~1361kW/m2.

Solar energy

Solar energy or solar power is collective terminology used for grid energy generated in any way from solar radiation. 

Solar flux

Flux is defined as the rate of flow of something through a given area. Solar flux is the rate of photons (or more generally energy) per unit time through a given area. 

Solar panel

A solar panel is a device designed to harness the energy concentrated in solar radiation and convert it into heat or electricity. Panels installed in solar thermal systems (less common) basically consist of pipes optimized to absorb thermal radiation and transfer it to the water that flows through them. Panels that convert solar energy into electric current are referred to as photovoltaic panels. They use doped semi-conducting silicon crystals to generate a photo current and extract electric energy.

Solar thermal

Solar thermal systems use light and infrared radiation to heat water for commercial or residential use. Depending on purpose systems might use simple panels with pipe systems to heat water for swimming pools or domestic water supply, or mirror systems to super heat water for the use in steam turbines. The latter method is usuallly used to run solar thermal power plants.

System size

System size refers to the ouptut capability of a photovoltaic system. While a system will only rarely produce its nameplate output the number is usually used to estimate the optimal size of a system for a given consumer.



A tariff in its general sense is a tax imposed on goods or services that are imported or exported. In the energy business however it mostly refers to a pricing table of an energy company that defines the utility rate based on the amount of consumption and/or other factors.


Tilt refers to the angle between a surface and the horizontal. With respect to solar systems the term is usually used for roof areas or landscapes with a significant slope.


Utility rate

The utility rate is basically the price per energy from the grid, typically calculated in £/kWh. The utility rate varies depending on the power provider and for large-scale consumers also on the amount of energy expended.


Wind speed

Wind speed can become a critical factor for solar installations that are mounted with an angle towards the underlying surface, especially when it gets to a level where the flowing air masses are capable of damaging the installation. 

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