When discussing solar energy, it’s important to ensure first that everyone is speaking the same language. For example, did you know that the potential power output of your solar panels is configured in one kind of current and the power sent to the building is configured in another. The two don’t exactly mean the same thing, and that can cause confusion.

With that in mind, here is a glossary of important solar power terms.

Alternative Energy

This is the full spectrum of renewable energy sources like solar, wind, hydropower that will never run out. Nuclear power will not be an option in about 80 years as uranium supplies are depleted. Fossil fuels will eventually become depleted. But the sun is expected to shine on for another five billion years.

Community Solar

A large array of solar panels to which many homes and/or businesses subscribe and from which receive all or part of their power needs. Community solar projects are generally built by companies on land they lease from property owners, providing renewable, low-cost power generation to many families and businesses, profit for themselves and income for the property owners.

Electric Grid (or Utility Grid) –

The infrastructure of power generators, utility companies, distribution sources, power lines, transformers and so on that deliver electricity to your home and business. That is, unless you have gone “off the grid” by powering your business or home entirely by solar, which requires less and different infrastructure, often right on site.

Engineering, Permit and Construction

Companies like Alder that design and build solar projects and sell the power to homes and businesses are considered engineering, permit and construction suppliers.


The electricity produced by solar panels is direct current, or DC. The electricity that runs homes and businesses is alternating current, or AC. The inverter is the traffic cop in between, converting DC to AC. Solar panels rated for a certain power generation (say, 100kW) don’t work at 100% efficiency, and therefore generally don’t produce 100 kW. A 100 kW inverter is generally considered sufficient for 150 kW panels.

Investment Tax Credit

A credit created by Congress in 2005 to encourage investment in solar energy. Starting at a 30% credit for homeowners and business owners that convert to solar, the credit drops to 26% this year and is scheduled to fall to 20% and 6% the next two years. However, a bill now being negotiated in Congress would extend the 30% credit for 10 more years.

Net Metering

The sweet nectar of owning a solar energy system. As long as your business generates solar power it comes to you at zero cost, bypassing the utility’s meter. Only the power you buy from the local utility comes through the meter, potentially saving thousands of dollars a month.

Operating Lease

Business can rent the solar power equipment that produces their energy.


A solar developer that owns the project and delivers the energy to customers. Alder serves as owner/operator at times as well.

Power Purchase Agreement (PPA) –

the method of purchasing energy produced by a solar power system without owning the system. This setup is often used by municipalities and schools that outsource the purchase and construction of their solar array and simply pay for the electricity used.

Solar Array (or Solar Farm) –

a collection of solar panels interconnected to generate solar power.

Solar Panels (or modules) –

A collection of solar cells comprising layers of silicon, phosphorus and boron that work together to convert sunlight into usable energy. The process, called the Photovoltaic Effect, was first described by Albert Einstein. (His Nobel Prize in Physics was awarded for this discovery, not for relativity theory.) The typical solar panel is 5 feet by 3 feet and weighs about 40 pounds.

Solar Developers

Companies that serve as the developers who broker arrangements for a solar farm. Alder provides this service in addition to being an owner/operator and engineering, permit and construction company.

Understanding these terms can make you an educated consumer when considering the fastest-growing renewable energy source – solar.

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