Navigating commercial solar can be complex, from financing models to grid connections. This glossary simplifies the essential terms, technologies, and incentives behind solar for business. Learn what drives ROI, how systems work, and why more companies are investing in renewable energy to cut costs and power growth sustainably.
Search and explore key commercial solar terms, from financing and tax credits to system design and energy storage. This glossary makes it easy for business leaders to understand the concepts that drive solar performance, ROI, and long-term sustainability.
Battery storage systems store excess solar energy for later use, providing backup power and helping businesses avoid costly demand charges. By pairing solar with storage, companies can use clean energy even when the sun isn’t shining and gain more control over their energy costs.
Demand charges are utility fees based on the highest amount of power a business uses during a billing period. Solar and storage systems help reduce demand peaks, lowering these charges and creating more predictable energy costs over time.
An interconnection agreement is the formal contract between a solar customer and the local utility that governs how the solar system connects to the electrical grid. It outlines technical requirements, safety standards, and the terms for sending excess energy back to the grid.
An inverter is the component that converts the direct current (DC) electricity generated by solar panels into alternating current (AC), which is used by most electrical systems and the grid. Modern inverters also track performance data and optimize system efficiency.
The Levelized Cost of Energy measures the average total cost of building and operating a solar system over its lifetime, divided by the total energy it produces. It’s a key metric for comparing the long-term economics of solar to traditional power sources.
Net metering is a billing mechanism that allows businesses with solar systems to send excess electricity back to the grid in exchange for energy credits. These credits can offset power drawn from the grid at other times, reducing overall utility costs and improving the financial return of a solar investment.
Photovoltaic, or PV, refers to the technology that converts sunlight directly into electricity using semiconductor materials. When sunlight hits a PV cell, it excites electrons, creating an electric current. PV systems are the core of most solar installations, ranging from small rooftop arrays to utility-scale solar farms.
A Power Purchase Agreement is a contract in which a third-party developer installs and operates a solar system on your property, and your business agrees to buy the electricity it produces at a fixed rate—usually below market utility prices.
