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Solar Terms

Glossary of Commonly Used Terms

Alternating Current (AC)

Alternating current (AC) is an electric current whose direction reverses cyclically, as opposed to direct current (DC), whose direction remains constant. AC is the form of electricity that is delivered to your home or business. Solar photovoltaic (PV) systems produce DC power, which must be converted to AC by an inverter. Under the California Solar Initiative Program, PV electric output is converted to a value called CEC-AC Rating. (See CEC-AC Rating).


The entity (the Host Customer, System Owner or a third-party designated by the Host Customer) responsible for filling out and submitting the California Solar Initiative application and all related materials. The applicant serves as the main point of contact with the California Solar Initiative Program Administrator.


Any number of electrically connected photovoltaic (PV) panels providing a single electrical output.


Azimuth is the horizontal angular distance between the vertical plane containing a point in the sky and true south. All references to azimuth within the California Solar Initiative Program, unless expressly stated otherwise, refer to true, not magnetic, azimuth.

Building Integrated Photovoltaic (BIPV)

BIPV technologies form part of the structure to which they are affixed. Typically integrated into the roofing system, BIPV products can provide architectural interest and/or a very unobtrusive installation.

Capacity Factor

The capacity factor for an electricity generating unit is the ratio of the energy produced during a given time period, measured in kilowatt-hours (kWh), to the energy the unit could have produced if it had been operating at its rated capacity during that period, expressed in kilowatts (kW): Capacity factor = kWh of electricity generated Rated generating capacity (kW) x period (in hours)

Capacity Rating

The rating given to a PV system by its manufacturer denoting the load the system is able to meet or supply when operating at full capacity. For a solar system, this will occur when the system is in direct sunlight with no shade. The Program Administrator will verify system capacity rating to confirm the final incentive amount.

CEC-AC Rating

The calculation that provides a total estimated energy output of a solar system, factoring in the efficiency of the inverter. The California Solar Initiative Program Administrators use the California Energy Commission’s CEC-AC method to measure nominal output power of PV cells or modules to determine the system’s rating in order to calculate the appropriate incentive level.

Conversion Efficiency

The amount of the sun’s energy that a solar cell can convert into electricity; the balance is lost as heat or reflected light.

Design Factor

The design factor is a California Solar Initiative Program term that compares a proposed system’s expected generation output with that of a baseline system. The design factor allows the California Solar Initiative Program Administrators to pay a higher EPBB incentive to optimally designed systems. The design factor is calculated using a few key inputs and the EPBB calculator available at

Direct Current (DC)

Solar PV systems produce electricity in direct current (DC), which is defined as the continuous flow of electricity through a conductor. In DC, electricity always flows in the same direction, which distinguishes it from alternating current (AC). Solar PV systems produce DC power, which must be converted to AC by an inverter in order to power household appliances. Under the California Solar Initiative Program, PV electric output is converted to a value called CEC-AC Rating. (See CEC-AC Rating.)

Electrical Distribution Grid

This is the system that provides electricity to most homes and businesses. A network of power stations, transmission circuits and substations conduct electricity to consumers for their use. Under the California Solar Initiative Program, eligible renewable energy systems must be permanently interconnected and operating parallel to the electrical distribution grid of the utility serving the customer’s electrical load.

Expected Performance-Based Buydown (EPBB)

The EPBB incentive methodology pays an up-front incentive to participants installing grid-connected or grid-tied PV systems less than 30 kW in size that is based on a system’s expected future performance. EPBB incentives combine the performance benefits of PBI with the administrative simplicity of a one-time incentive paid at the time of project installation. The EPBB incentive is calculated by multiplying the incentive rate by the system rating by the design factor.

Greenhouse Gases (GHG)

The gases responsible for trapping heat from the sun within the Earth’s atmosphere (i.e., water vapor, carbon dioxide, methane, ozone, chlorofluorocarbons and nitrogen oxides). GHGs are released from many sources, including industrial processes such as power generation from fossil fuels.


Term used to describe an electrical utility distribution network.

Grid-Connected or Grid-Tied PV System

A PV system in which the PV array is wired into buildings or residences that are connected to the utility grid. To receive incentives under the California Solar Initiative Program, PV systems must be connected to the utility’s grid, allowing excess solar energy to flow back onto the grid, which produces a bill credit.

Host Customer

An individual or entity that meets all of the following criteria:

  1. has legal rights to occupy the site;
  2. receives retail level electric service from PG&E, SCE or SDG&E;
  3. is the utility customer of record at the site;
  4. is connected to the electric grid; and
  5. is the recipient of the net electricity generated from the solar equipment.

Incentive Adjustment Mechanism

The manner in which solar incentives decline when prescribed megawatt targets are reached throughout the 10-year duration of the program. The California Solar Initiative Program Administrators use the sum of the total megawatts of approved reservations to determine when to adjust the incentive amounts. The current status of incentive levels and remaining eligible capacity is shown on the Trigger Tracker at


The amount of solar energy that shines on a building or area, equivalent to energy and usually expressed in annual kilowatt-hours per square meter.

Interconnection Agreement

A legal document between the Host Customer and their electric utility authorizing the connection of the customer’s solar system to the utility’s grid. This agreement is required prior to receiving a California Solar Initiative incentive payment.

Interval Data Recorder (IDR)

An Interval Data Recorder is a metering device that stores data on energy production, usually in hourly or 15-minute intervals.


A device that converts direct current (DC) electricity produced by a solar system into the alternating current (AC) electricity that can be used in a home or building. Some energy is lost when this conversion takes place. (See CEC-AC rating.)

Inverter Efficiency

The AC power output of the inverter divided by the DC power input. Inverter efficiency is lowest when operating at low loads; thus, it is important to select inverter(s) of the proper size relative to the PV array.

Kilowatt (kW)

A unit of electrical power equal to 1,000 Watts, which constitutes the basic unit of electrical demand. The Watt is a metric measurement of power (not energy) and is the rate (not the duration) at which electricity is used. 1,000 kW is equal to 1 megawatt (MW).

Kilowatt-Hour (kWh)

A unit of electrical energy, equivalent to the use of 1 kilowatt of electricity for one full hour. Utilities measure customers’ electric energy usage on the basis of kilowatt-hours, and electricity rates are most commonly expressed in cents per kilowatt-hour. The California Solar Initiative Program’s PBI incentive is paid based on the kilowatt-hours of energy produced by a solar system.


The amount of power carried by a utility system or the amount of power consumed by an electric customer at a specific time. Base load is the minimum constant level of electricity required by utility customers; peak load is the amount of electricity required at the time of greatest demand.

Megawatt (MW)

Unit of electric power equal to 1,000 kW, or 1 million Watts.


A device used to measure and record the amount of electricity used or generated by a consumer. Solar systems receiving an EPBB incentive require a meter accurate to within ±5%, while systems receiving PBI payments require a more precise meter accurate to within ±2%.


Under the California Solar Initiative Program, a module is the smallest protected assembly of interconnected PV cells. Modules are typically rated between 40 Watts and 200 Watts.

Net Energy Metering (NEM) Agreement

An agreement with the local utility that allows customers to receive a credit at the retail price of electricity for surplus electricity generated by certain renewable energy systems, such as those covered under the California Solar Initiative Program. Under net metering, the electric meter runs backward as a customer’s solar system generates surplus electricity.

New Construction

New construction is defined as the construction of new buildings that have not yet received a permit for occupancy from the local jurisdictional authority. Solar systems installed on residential new construction should apply to the California Energy Commission’s New Solar Homes Partnership Program. Solar systems installed on new non-residential construction should apply for the California Solar Initiative Program.

New Solar Homes Partnership (NSHP)

A statewide program that is managed by the California Energy Commission and works with homebuilders to accelerate PV installation on new residential construction.


A term used to describe the direction that the surface of a solar module faces. The two components of orientation are the tilt angle (the angle of inclination a module makes from the horizontal) and the azimuth (the compass angle that the module faces, with north equal to 0 degrees and south equal to 180 degrees).

Performance-Based Incentives (PBI)

The California Solar Initiative Program will pay PBI incentives in monthly payments based on recorded kilowatt-hours of solar power produced over a five-year period. Solar projects receiving PBI incentives will be paid a flat per kWh payment monthly for PV system output that is serving on-site load. The monthly PBI incentive payment is calculated by multiplying the incentive rate by the measured kWh output.

Performance Data Provider (PDP)

For California Solar Initiative customers who take a performance-based incentive (PBI), the PDP monitors and reports solar system production data to the California Solar Initiative Program Administrator, who then pays a PBI incentive based upon the data submitted by the PDP.

Photovoltaic (PV)

The technology that uses a semiconductor to convert light directly into electricity.

Power Conversion Efficiency

The ratio of output power to input power of the inverter. Efficiency of stand-alone inverters will vary significantly with the load. Values found in manufacturers’ specifications are the maximum that can be expected.

Power Purchase Agreements (PPA)

A contract to purchase energy. PPAs are usually established between a power plant and a purchaser of electrical energy, such as a utility. In the context of the California Solar Initiative Program, a PPA may be a contract written between a building owner that wants to use solar energy and a third-party developer who will install, maintain and own the PV system used to generate the electricity on the building’s structure, then sell the solar energy produced by the system to the building owner at a pre-determined rate. PPAs are not a requirement of the California Solar Initiative Program, but they are a growing financial instrument that may facilitate solar installations.

Program Administrator (PA)

Program Administrator refers to PG&E, SCE and CCSE, who perform administration of the California Solar Initiative Program under the auspices of the CPUC.

Renewable Energy Credits (RECs)

Renewable energy certificates (RECs)—also known as green certificates, green tags or tradable renewable certificates—represent the environmental attributes of the power produced from renewable energy projects. By installing a renewable energy system (such as solar), you become the owner of these environmental attributes, or RECs.


A chemical element (Si) that is the most common semiconductor material used in making solar PV cells.


The Host Customer’s premises. Each individual site must be able to substantiate sufficient electrical load to support the proposed system size. Ask your installer about requirements specific to your site.

Solar Irradiance

Radiant energy emitted by the sun, particularly electromagnetic energy.

Solar Pathfinder

A device used in PV site assessment for charting the sun’s path through the sky for all months of the year, calibrated by the hours of the day. Also provides other critical, detailed site data.

Solar Thermal

The process of concentrating sunlight on a relatively small area to create the high temperatures needed to vaporize water or other fluids to drive a turbine for generation of electric power, heat water for domestic or industrial hot water, or space conditioning (heating or cooling). California Solar Initiative does not currently fund solar hot water systems, but it does fund some other non-PV systems.

Stand-Alone PV System

An autonomous or hybrid photovoltaic system not connected to a grid (as opposed to grid-connected). The California Solar Initiative Program does not currently offer incentives for stand-alone PV systems.

System Installer

The system installer is the contractor responsible for installing the California Solar Initiative incentive-eligible PV system for the Host Customer.

System Owner

The owner of the PV system at the time the incentive is paid. For example, in the case when a vendor sells a system to a Host Customer, the Host Customer is the System Owner. In the case of a leased system, the lessor is the System Owner.

System Size

System size is the electricity generating capacity of a given photovoltaic system based upon CEC-AC rating standards. In the California Solar Initiative Program, the system size is limited to no greater than the amount of energy used at a site during the prior 12 months.

Time-of-Use (TOU) Meter

An electric meter that measures and records the times during which a customer consumes or generates electricity. This type of meter is used for customers who are on time-of-use rates.

Time-of-Use (TOU) Rates

Electricity prices that vary depending on the time period in which the energy is consumed or produced. In a time-of-use rate structure, higher prices are charged during utility peak-load times. Such rates can provide an incentive for consumers to curb power use during peak times. Solar PV panels tend to produce power during peak times, so they have high value when used in conjunction with time-of-use rates.

Tracker or Tracking Array

A number of PV modules mounted such that they track the movement of the sun across the sky to maximize energy production, either with a single-axis or dual-axis mechanism.


In the California Solar Initiative Program, inverters and modules must each carry a 10-year warranty, and meters a one-year warranty. Meters that are integrated in the inverter must carry a 10-year warranty. The warranty may be provided in combination by the manufacturer and installer.


A unit of measurement of electric power, named after physics pioneer James Watt.

Watt-hour (Wh)

A unit of energy measurement, equal to one Watt of power used for one hour.