When discussing solar energy, it’s essential to ensure that everyone speaks 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, which 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, and hydropower that will never run out. Nuclear power will not be available in about 80 years as uranium supplies are depleted. Fossil fuels will eventually deplete because it takes millions of years to turn fossils into oil. But the sun is expected to shine on for another five billion years.
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 purchasing and constructing their solar array and simply pay for the electricity used.
Here is how a Power Purchase Agreement (PPA) works: A solar company covers the cost of building and maintaining a solar power system on the customer’s property – often a school or municipality. The solar company, not the customer, owns the solar system. In exchange, the customer pays a flat rate for the power produced, usually lower than the cost of drawing power off the electric grid from the local utility. The customer agrees to purchase the power, hence, a Power Purchase Agreement.
Community Solar:
Also called solar farms, community solar is a large array of solar panels to which many homes and businesses subscribe and from which they receive all or part of their power needs. The average community solar project produces a megawatt of power, about 1,000 times as much as your average home solar panels. 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.
The bulwark of most community solar projects is a Power Purchase Agreement, which allows customers to purchase solar energy without owning the equipment.
Electric Grid (or Utility Grid):
The infrastructure of power generators, utility companies, distribution sources, power lines, transformers, and so on delivers electricity to your home and business. If you have gone “off the grid” by powering your business or home entirely by solar, you are not reliant on the electric grid and are not subject to service interruptions during power outages. Going off-grid 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 businesses are considered engineering, permit and construction suppliers. Alder enters into various Power Purchase Agreements with its customers, depending on what is best for them.
Inverter:
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 specific power generation (say, 100kW) don’t work at 100% efficiency and generally don’t produce 100 kW. A 100-kW inverter is usually considered sufficient for 150-kW panels. The translation is complicated, which is why it is essential to engage the services of a professional solar company.
Investment Tax Credit:
Solar systems installed since 2022 qualify for a federal tax credit created to encourage investment in solar energy. The credit offers a 30% credit for homeowners and business owners that convert to solar and declines to 26% in 2033 and 22% in 2034 before expiring.
Net Metering:
Net metering is 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. It gets even sweeter in many parts of the country. Any excess solar power not used by the customer may be pumped back into the grid, turning the meter in the opposite direction.
Operating Lease:
Businesses can rent the solar power equipment that produces their energy, such as under a Power Purchase Agreement.
Owner/Operator:
A solar developer that owns the project and delivers the energy to customers. Alder serves as owner/operator at times as well, entering into Power Purchase Agreements with customers who prefer this arrangement.
Solar Array (or Solar Farm):
a collection of solar panels interconnected to generate solar power. Community solar operations depend on solar arrays.
Solar Panels (or modules):
A collection of solar cells comprising layers of silicon, phosphorus and boron that combine 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 as 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.
Ready to invest in solar power for your business? Contact us today for more information.
Solar demand is expected to increase in the following years. As climate change can be felt already in some countries and cities, people have started realizing that we need to shift to a green movement and save mother Earth.