Chapter 1 · Solar System Basics
1.3 Essential glossary (so the sales pitch doesn't lose you)
| Term | Abbreviation / English | What it means |
|---|---|---|
| Nameplate Capacity | kW (kilowatt) | The system's peak instantaneous output |
| Annual Production | kWh / year | Cumulative energy produced per year (drives payback) |
| Net Metering | NEM | The rule for crediting power your system sends back to the grid |
| Investment Tax Credit | ITC | §25D for residential, §48E for commercial — covered later |
| Power Purchase Agreement | PPA | A "free install" trap |
| Lease | Lease | Another "free install" trap |
| Microinverter | — | One small inverter under each panel; parallel architecture |
| Hybrid Inverter | — | One central inverter handling panels, battery, and grid simultaneously — the dominant NEM 3.0 design |
| Self-consumption Rate | — | Share of solar energy used directly by your home (rather than exported) |
| Permission to Operate | PTO | Utility approval to energize your system |
| Critical Load / Backup Load | — | Circuits that stay alive on inverter + battery during a grid outage |
| Non-export / Zero Export | — | Configuration where the system never pushes power back to the grid |
Cross-reference: Why "annual production" stopped being the headline metric under NEM 3.0 — see Chapter 5, section 5.6.
Next Step
Questions after reading this section? Send us your utility bill — we will come back within one business day with a recommendation specific to your situation.