Solar Industry Terms: Your Ultimate Guide

solar sales terms

Hiring new talent for your solar business? The industry has a lot of buzzwords, and making an informed decision depends on knowing what all of them mean.

Here’s what every solar sales rep needs to know before they step out into the field.


Another significant term in the solar industry glossary is kilowatt-hour (kWh). This is the standard unit to measure electrical power. Customers are billed using kWh, or the measure of power to run a device for one hour.

Dollars Per Watt

People often calculate the average cost of solar panels by determining the price in dollars per watt. This is done by dividing the system cost by the number of watts the solar panels nameplate rating shows. However, the system may not always produce at this rating because of degradation and other factors, so the better way to determine the true cost is to look at the dollars per kilowatt hour over the warranty period.

Dollars Per Kilowatt Hour

Power warranties on solar panels vary drastically due to guaranteed degradation. The most accurate way to determine the cost of solar is to look at how much the energy costs to produce, like any other utility. Consider the energy the system will produce over the warranty period and divide by the cost of the solar energy system.

Alternative Energy

One of the most widely used terms in the solar industry is alternative energy. This refers to energy that comes from sources that bring minimal or zero harm to the environment as an alternative to finite sources like fossil fuels. Typically, energy sources considered “alternate” are natural and renewable, such as solar, wind, geothermal, hydro electrical energy, and biomass.

Balance of System

A solar energy system is more than just the solar panels. Balance of system (BOS) stands for all the components of a solar system besides the panels. This may include the monitoring system, hardware, wiring, and inverters.

Electrical Grid

Otherwise known as an electric or utility grid, the electrical grid is an interconnected network that delivers electricity to end consumers from the producers. The network consists of power stations to produce electricity, electrical substations to provide additional voltage for transmission or limited voltage for distribution, and transmission lines to transport power from sources to demand centers. Distribution lines are used to connect individual customers.

Grid-Connected System

A grid-connected system is a solar energy system that connects to the electrical grid. People who live in areas with minimal sunlight or people who are otherwise unable to independently support their full power needs through a solar system can join the grid. The grid connection also balances the power to ensure that there isn’t a lack of power at a home or business.

Energy Audit

An energy audit is a process in which a homeowner or business owner evaluates the amount of power they need for their home or business’s energy needs. Performing the audit can save the user a lot of money and energy.

Ground-Mounted Solar

Ground-mounted solar is an array of solar panels that are installed on the ground or land. This is done for utility-scale or large-scale solar projects like large power plants that supply power to a number of households or businesses.

Interconnection Agreement

This is the contract between the local utility company and the homeowner. The contract allows the homeowner or business owner to access the power grid by linking it to their solar system. With this contract, some areas allow a homeowner or business owner to receive a credit on their power bill for any electrical power surplus.


The inverter is the part of the system that converts direct current (DC) generated by the solar panels into alternating current (AC). This is essential for producing user-friendly current (DC) for a home or business. Inverters provide several layers of monitoring, system efficiencies, and cot savings.


Inverters convert DC power from several solar panels into AC, while a micro-inverter converts DC power from one solar module.

Mounting Hardware

Solar panels must be mounted to the roof or other structures. The mounting hardware is the equipment needed to securely attach a solar panel to a rooftop or to trackers. Typically, these are lightweight, weather-resistant frames.

Net Metering

Net metering is the process of balancing power. A solar energy system that’s tied to the grid may generate more energy than the owner needs, so the surplus can be sent to the grid for redistribution. Similarly, when a customer needs more power, the grid can supply it.


Photovoltaic (PV) technology converts sunlight into electrical power using semiconducting materials that absorb electrons from the sun. The PV system uses solar panels to generate solar power. Each module has multiple solar cells that are responsible for generating electrical power. PV installations may be on the ground, walls, roof, or simply floating.

Operations and Maintenance

In utility-scale and large-scale commercial solar systems, operations and maintenance (O&M) refers to the continuing operational requirements of the solar energy system. This may include bill management, cleaning, repairs, replacement parts, and more.

Peak Hours

The peak hours refer to the hours of the day when the sunlight is strongest. It’s not the length of time, but the intensity and quality of the sunlight, which is 1,000 watts for every square meter.

Renewable Energy

Renewable energy is a source of energy that occurs naturally and renews continuously, such as sunlight, wind, tidal, and geothermal heat. This contrasts with non-renewable and finite sources of energy, such as fossil fuels.

Solar Array

A solar array is a collection of solar cells arranged on a solar panel. Having multiple solar cells across multiple solar panels allows the system to generate more solar power to serve the needs of home or business owners.

Solar Efficiency

Solar efficiency refers to the percentage of sunlight that the panels convert into electricity based on the amount of sunlight they receive. Most solar panels on the market have a solar efficiency range between 15% and 24%.

Smart Grid

Smart Grids are a type of power grid that uses digital technology for monitoring and control. Smart technology regulates the flow of electrical energy between the power provider and the end consumers.

Solar Cell

A solar cell is a single unit that captures light in a photovoltaic solar panel. These devices capture and convert sunlight into electricity through the photovoltaic effect. This is both a chemical and physical process. Cells typically consist of silicon semiconductors with a positive and negative layer that creates an electrical field.

Solar Dealer

A solar dealer is a company that sells solar equipment to customers, such as business owners or homeowners. The companies sell solar products from multiple manufacturers or they may focus on only one manufacturer.

Solar Batteries and Storage

A solar battery or storage system is a system of high-capacity rechargeable battery banks that store surplus energy that solar panels produce. The batteries ensure that users can have power when sunlight is unavailable, such as after dusk, or during an outage. Batteries can be integrated at a later time if your panels have already been installed.

Solar Canopies

Solar arrays are often installed high above the ground and form structures that leave the land usable, called a solar canopy. This creates shade for car parks or other uses.

Solar Installer

Solar installers are providers that install solar energy systems directly. They may be available from the solar dealer, subcontracted, or from a separate company.

Solar Monitoring

Solar monitoring is the process of tracking and managing solar system activities, such as power production, carbon offsets, usage, and more. Solar monitoring systems can be accessed through computers, smartphones, or a remote operation center to allow consumers to monitor their system.

Solar Panel or Module

A solar panel is a device that consists of interconnected solar cells that form a circuit. The purpose of a solar panel or module is to absorb sunlight to generate power. This is a single photovoltaic device that consists of an assembly of linked solar cells.

Solar Power Plant

A solar power plant is a vast solar array with the purpose of generating solar energy for large commercial and utility use.

Thin-Film Solar

Thin-film solar is lightweight and flexible compared to conventional solar, which is bulky and rigid. Using thin-film solar increases the capability of the solar panels to harness power, and they may be cheaper than traditional modules.

Solar Panel Product/Equipment Warranty

A solar panel’s product warranty covers the panel itself and protects against problems like manufacturing defects, premature wear and tear, and environmental issues. Like most warranties, the longer period is more advantageous to the end customer. The terms and conditions of solar product warranties can vary dramatically, however.

Solar Panel Power/Performance Warranty

The amount of electricity a solar panel produces declines by a small percentage each year, which is known as degradation. This is true of all solar panels to varying degrees. A power/performance warranty is a guarantee from the manufacturer that the panels will not lose more than the predetermined percentage of power output capacity over time.

Solar ITC

The Solar Investment Tax Credit is a federal tax credit that can be used when a solar system is purchased outright and installed in your home. As a homeowner, you can apply for a credit when filing your income taxes. It’s important to consult with a tax advisor for more details, however.

Renewable Energy Certificates

Renewable Energy Credits, also known as RECs, Green Tags, green energy certificates, or tradable renewable certificates, are tradable commodities that prove one megawatt-hour of electricity was generated from a renewable energy source. One megawatt-hour equals 1,000 kilowatt-hours. The average residential solar customer consumes about 800 kilowatt-hours a month.

Key Takeaways

If you’re looking to install a solar energy system or you already have one, it’s essential to understand solar terms.

Ready to boost revenue for your solar company? Contact the team at AJC Group to explore our sales training and content marketing for solar companies. 

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