Good day reader! Our goal here at Natosi is to be as clear and concise as possible. In short, we want you to be able to rip through those project proposals like a seasoned professional. Hopefully, by the bottom of this page, we'll have cleared up enough of the solar industry's most mystifying terms so you can do just that!
Let's start with some basic technical terms.
A Solar Panel is made up of many Photovoltaic Cells which work together to capture Solar Energy
Photovoltaic Cells are devices that convert energy from sunlight into DC Electricity
Direct Current (DC) Electricity:
A form of electricity produced by solar panels and discharging batteries. Mobile phones, Electric Vehicles, and LEDs all operate on DC Electricity.
Alternating Current (AC) Electricity:
The form of electricity produced at power plants for use in homes and businesses.
Wall outlets, toasters, refrigerators, and dishwashers all operate on AC Electricity.
A Solar Array is a series of linked Solar Panels that work together to produce electricity
A Ground-Mounted Array is a great alternative when a Roof Array isn't considered a viable option
Why might a Roof Array be considered non-viable?
Total Solar Resource Factor (TSRF):
A Total Solar Resource Factor is an efficiency score related to the location of your solar array and is the most accurate measurement of how much sun your panels will receive.
When determining TSRF, shading, orientation in relation to the sun, and tilt, or the angle of your solar panels to the horizon, are all carefully calculated and taken into account.
Ground-Mounted Arrays are often the perfect alternative when a roof receives too little sunlight to justify installation. Without the limitations of a roof surface, panels can be angled, tilted, located away from shade, and oriented to maximize TSRF.
The Electric Grid transports Grid Energy through powerlines to be consumed by utility customers within homes and businesses
A Utility Meters measures how many kWh of Grid Energy is consumed from the Electric Grid by utility customers
Kilowatt (kW):
A measure of electrical power equal to 1000 watts.
Kilowatt-hour (kWh):
A unit of energy equal to one kilowatt of sustained power consumption for one hour.
It takes one kilowatt-hour of energy to power a 100w lightbulb for ten hours.
An Inverter is a piece of electrical equipment that transforms DC Electricity into AC electricity
The Solar Meter measures in kWh how much energy has been produced by a Solar Array
When Solar Energy Production exceeds a home's Energy Consumption, the excess energy is sent out to the Electric Grid for use in homes and businesses
Similarly, when Solar Energy Production falls short of Energy Consumption, a Grid-Tied System will allow Grid Energy to flow back into the home
Now for some useful Financial Terms.
In a Grid-Tied System, Energy is shared with the electrical grid in return for Bill Credits
The process for measuring how much energy was sent and received is referred to as 'Net-Metering'
Non-bypassable charges/fees:
Non-bypassables, are a series of Vermont state-mandated charges that cannot be offset by an array's solar production. Examples include utility customer fees, energy efficiency charges, energy assistance programs fees, and solar account management fees. Non-bypassables depend on your specific utility, contact your provider for additional information.
Federal ITC:
In an effort to incentivize solar installation the government has created the Federal Income Tax Credit. Available to all current taxpayers, the Federal ITC allows you to claim a percentage of the total value of a new solar array against your income taxes in the year of installation. As of right now, those percentages stand at 26% for 2022 and 22% in 2023 respectively. The Federal ITC is set to expire after 2023.
It's important to note that the Federal ITC is NOT a tax deduction and is NOT a tax rebate.
Let's be real...no one here at Natosi Solar is a tax expert. Solar experts, you bet! Tax experts, not even close. If you have a tax specialist, it's best to check with them to figure out your "tax appetite" when determining how the Solar ITC can benefit you.
Payback Period:
The Payback Period is the number of years it will take for your system to pay itself off. Periods are calculated by the value, or cost of the system, divided by the annual electric bill savings. A shorter period means you'll begin earning an ROI on your array sooner.
ROI, or Return on Investment, is used to measure how much money was saved over sticking with a normal utility service. With adequate care, a solar array can easily last 25+ years. That many months of offset utility bills will add up fast and systems often see a Return on Investment of hundreds, thousands, or even tens of thousands of dollars that would've otherwise been spent on Grid Energy.