Energy Glossary
Essential terms for understanding home energy efficiency, solar power, and savings.
Categories
Units
kWh (Kilowatt-hour)
A unit of energy equal to using 1,000 watts for one hour. Your electricity bill is measured in kWh. The average US home uses about 900 kWh per month.
Time-of-Use Rate (TOU)
An electricity rate that varies by time of day. Peak hours (e.g. afternoon and evening) cost more; off-peak (night, midday in some regions) cost less. Solar and batteries can help shift usage to cheaper periods.
Kilowatt (kW)
A unit of power equal to 1,000 watts. Solar systems are often sized in kW (e.g. 6 kW). Power (kW) × time (hours) = energy (kWh).
Solar
Solar Panel (Photovoltaic Panel)
A device that converts sunlight directly into electricity using semiconductor materials. Most residential panels produce 300-400 watts each and last 25-30 years.
Net Metering
A billing arrangement where solar panel owners receive credit for excess electricity they send to the grid. Your meter spins backward when you produce more than you use.
Grid-Tie System
A solar power system connected to the utility grid, allowing you to use grid power when needed and sell excess back to the utility.
NEM (Net Energy Metering)
A billing system that credits solar owners for excess electricity sent to the grid, often at retail rate. NEM 2.0 and NEM 3.0 refer to different versions of these rules, with NEM 3.0 in California reducing export credits and encouraging battery storage.
Solar Inverter
A device that converts the direct current (DC) produced by solar panels into alternating current (AC) used by your home and the grid. String inverters handle multiple panels; microinverters attach to each panel for better shade tolerance.
Peak Sun Hours
The equivalent number of hours per day when the sun delivers 1,000 W/m². Used to estimate solar production: system size (kW) × peak sun hours × days ≈ daily kWh. Varies by location and season.
Heating & Cooling
Heat Pump
A device that transfers heat from one place to another, providing both heating and cooling. Heat pumps are 2-4 times more efficient than traditional furnaces because they move heat rather than generate it.
SEER Rating (Seasonal Energy Efficiency Ratio)
A measure of air conditioner and heat pump cooling efficiency. Higher SEER ratings mean lower energy consumption. Modern efficient units have SEER ratings of 15-25.
HSPF (Heating Seasonal Performance Factor)
A measure of heat pump heating efficiency over a typical heating season. Higher HSPF means better efficiency. Minimum federal standards are around 8.8; efficient units reach 13+.
AFUE (Annual Fuel Utilization Efficiency)
A measure of how efficiently a furnace or boiler converts fuel into heat over a year. Expressed as a percentage; 90% AFUE means 90% of the fuel energy becomes heat, 10% is lost.
COP (Coefficient of Performance)
The ratio of heat (or cooling) output to electrical input for a heat pump. A COP of 3 means 3 units of heat for every 1 unit of electricity. Higher COP means better efficiency.
Ductless Mini-Split
A heat pump or AC system that uses an outdoor unit connected to one or more indoor air handlers without ductwork. Ideal for room additions, homes without ducts, or zoned comfort.
Financial
ROI (Return on Investment)
A measure of profitability calculated as (Net Profit / Cost of Investment) × 100. In home energy, ROI tells you how quickly your upgrade pays for itself and continues saving money.
Payback Period
The time required for an investment to pay for itself through savings. Shorter payback periods indicate better investments.
Levelized Cost of Energy (LCOE)
The average cost per unit of energy (e.g. per kWh) over the lifetime of a system, accounting for upfront cost, financing, and production. Used to compare solar, wind, or other sources.
Incentives
ITC (Investment Tax Credit)
A US federal tax credit for solar installations, currently set at 30% of system cost through 2032. This directly reduces your tax liability.
Feed-in Tariff (FIT)
A policy mechanism that pays renewable energy producers a set rate for electricity fed into the grid, often higher than retail rates to encourage adoption.
SREC (Solar Renewable Energy Credit)
A tradable certificate representing the environmental attributes of one megawatt-hour of solar generation. In states with renewable portfolio standards, utilities buy SRECs to meet mandates, providing extra income to solar owners.
Smart Home
Smart Thermostat
A programmable thermostat that learns your schedule and preferences, automatically adjusting temperature for comfort and efficiency. Can reduce heating/cooling costs by 10-15%.
Environment
Carbon Footprint
The total greenhouse gas emissions caused by an individual, organization, or activity, usually measured in tons of CO2 equivalent per year.
Insulation
R-Value
A measure of insulation's ability to resist heat flow. Higher R-values indicate better insulating properties. Required R-values vary by climate zone.
Assessment
Energy Audit
A professional assessment of your home's energy use, identifying inefficiencies and recommending improvements. Many utilities offer free or subsidized audits.
Net Zero Home
A home that produces as much energy as it consumes over a year, typically through solar panels plus high efficiency and insulation. Net zero energy means the annual energy balance is zero.
Storage
Battery Storage (Home Battery)
A rechargeable battery system that stores electricity for later use, typically paired with solar panels. Provides backup power and can maximize solar savings.