Navigating solar: A homeowner’s guide to solar terminology


AC power (alternating current)

This is the electricity that flows back and forth in a circuit. AC power is used in homes in order to power most household appliances. It’s called alternating due to the fact that the current switches direction.

AC coupling

This is a method that is used to connect a solar power system to a battery backup, allowing your solar panels to power your battery. This means you can use the stored energy during power outages or throughout peak-demand times.


An array, or solar array, is a system made up of several solar panels linked together. These panels work together to produce a greater amount of electricity than a singular solar panel. 


Batteries are devices that store electricity produced by solar panels, allowing it to be used when needed. This allows you to have access to electricity when the sun isn’t shining or during power outages.

Communication gateway

A communication gateway is a device that acts as a translator between your equipment. It allows your solar power system and your digital devices like computers and smartphones to understand each other – enabling you to monitor your system’s performance.


A cell is a small unit inside a solar panel that converts sunlight into electricity. It’s one of the most important building blocks of a solar panel.

C&I (commercial and industrial)

C&I refers to businesses and manufacturing units that utilize solar power to meet their energy needs. The needs of C&I tend to be much greater than residential needs.

DC power (direct current)

DC power, or direct current power, is electricity that flows in one direction in a steady stream. It’s the type of power that your solar panels produce before it’s converted to AC power for use in your home.

DC coupling

This is the method used to connect solar panels directly to a battery. It allows for the efficient storage of the electricity produced and is especially useful during power outages. For Hoymiles products, batteries are coupled with Hoymiles hybrid inverters so that the DC power of batteries flows directly into the hybrid inverter – the so-called DC coupling.

Learn more about how DC coupling is different from AC coupling here.

Distributed PV (photovoltaic)

Distributed PV refers to the scattering of many small solar power systems across various locations, making up a larger energy grid. This method is used as an alternative to having just one large solar power plant.

DTU (data transfer unit)

A DTU is a device that collects and sends information about your solar system’s performance to a place where you can view and analyze it. In Hoymiles’ product portfolio, the DTU serves as the communication gateway. It allows for better monitoring and management of your solar system.


In the context of a solar inverter system, there are a number of different efficiency terms; here are the main examples:

Conversion efficiency

Conversion efficiency measures how much DC power captured by the solar panels is converted to usable AC power through the solar inverter. A higher conversion efficiency means there’s less energy waste.

MPPT (Maximum Power Point Tracking) efficiency

MPPT efficiency refers to the effectiveness of the MPPT controller in continuously tracking and optimizing the maximum power point of one or more solar panels. This ensures that the inverter is consistently converting the maximum possible energy.  

CEC peak efficiency

This is a measure of how efficiently a solar inverter converts DC power from solar panels to AC power under optimal conditions. It’s calculated according to the standards set by the California Energy Commission (CEC).

CEC weighted efficiency

This is the average efficiency of a solar inverter under different operating conditions. This measure gives a more realistic view of the inverter’s performance, according to standards set by the California Energy Commission (CEC).

ESS (Energy Storage System)

This is a system that stores electrical energy, typically using batteries, so it can be used at a later time. This tends to be during events such as a power outage or when your solar panels are failing to produce enough electricity.

Feed-in tariff

A feed-in tariff is a type of payment from an electricity supplier. The payment is for the excess electricity your solar panels generate and feed back into the power grid.

Remote monitoring

Remote monitoring allows you to check your solar power system’s performance and statistics using a computer or smartphone. These details can be checked from wherever you have an internet connection and help keep you updated on your energy production and consumption.


Silicon is a hard and brittle element found in nature, primarily in sand and rocks. It’s a material commonly used in solar cells because of its ability to conduct electricity. Due to its semiconductor properties and easy accessibility, silicon is commonly used in PV systems on a large scale. It’s also useful due to the fact it can efficiently convert sunlight into electricity.

Solar panel/Solar module

Solar panels, otherwise known as solar modules, are devices composed of solar cells that capture sunlight and convert it into electricity. This allows you to power your home with cost-effective and renewable energy.

Solar system

A solar system is a complete setup consisting of solar panels, solar inverters, and, depending on the setup, a battery and other components. It is designed to convert and utilize solar power.

Smart meter

A smart meter is a digital meter that records electricity consumption in real time. It provides detailed information about your electricity usage and production.

Solar subsidy

This is financial assistance, usually from the government, that helps to reduce the cost of installing a solar power system. This helps to incentivize people to turn to solar energy and makes renewable energy more accessible.

S-Miles Cloud

This is an online platform in Hoymiles’ energy ecosystem where your solar power system data is stored. It can be accessed for monitoring and managing your solar energy usage.


The grid is the interconnected network that delivers electricity from producers to consumers. It supplies electricity to everything from homes to businesses.


This means that your solar power system is connected to the local electricity network, meaning you can draw from or feed into the grid as needed.


If a solar system is off-grid, it means that it operates independently of the local electricity network. Instead, it relies on batteries to store the electricity it generates, as well as a generator which can kick in to provide electricity when the batteries are drained.

Photovoltaic system

Photovoltaic systems – or PV systems – are setups that utilize the sunshine to produce clean solar energy. They use semiconductor materials, such as silicon, to turn the sun’s energy into electrical power. Sunlight striking the semiconductor material creates a flow of electricity that can be harnessed and used to power homes, businesses, and other applications.

Major components of a PV system include: solar panels (which convert the sunlight into DC power), mounting racks, inverters (which convert the DC power captured by solar panels into AC power), and batteries (which store surplus electricity for energy backup).

Photovoltaic effect

Photovoltaic effect is the generation of voltage and electric current in a material upon exposure to light. When the sun’s photons strike a solar panel, they are absorbed and induce an electrical current in three steps:

  1. Energy from photons hitting the panels knocks electrons out of their atomic orbits.
  2. These electrons are released into the electric field created by the solar cells.
  3. This field pulls free electrons into a directional current, thus creating DC energy.

This process is known as the photovoltaic effect, and it’s where the cells of the solar panel get the name photovoltaic solar cells from. Learn more about how solar panels work here.

PPA (power purchase agreement)

A PPA is a contract whereby a third party develops and installs a solar power system on a customer’s property. The customer can then agree to purchase the system’s electric output for a predetermined period of time.

PLC (Power Line Communication)

PLC is a technology that enables the transmission of data over electrical wires. It’s commonly used in solar power systems to enable communication between different components. For PLC, no extra communication cables are needed, and data is transmitted over the original power lines.


This is a device that converts the DC power generated by solar panels to AC power. It’s used by most common household appliances. There are a number of different inverters, including:


A microinverter is a compact inverter located on the back of a classic solar panel. It converts DC power to AC power at the individual panel’s level, ensuring maximum safety and addressing shading problems faced by PV systems.

String inverter

A string inverter is designed to convert DC power from a single string of solar panels into AC power for use in homes or businesses. It’s typically used in smaller solar installations where individual panels are connected in a series.

Centralized inverter

This is a larger-scale inverter that is designed to convert DC power from multiple strings or connected solar panels into AC power, centralizing the inversion process for multiple panels. It’s often utilized in larger commercial or utility-scale solar installations.

Hybrid inverter

A hybrid inverter is a combination of a solar inverter and a battery inverter into a single device. It can intelligently manage power from your solar panels, batteries, and the grid at the same time.

LCOE (levelized cost of energy)

The LCOE is a calculation that gives you a consistent comparison of the cost of generating electricity from different energy sources. It includes the total cost of energy over a system’s life span.

Monitoring system

This consists of the hardware and software used to collect and display information about your solar power system’s performance. It helps owners and installers ensure optimal performance and operation of solar systems.

Net metering

Net metering is a billing arrangement allowing solar power system owners to sell excess electricity back to the grid. Payment is often received as credit against their electricity bills.

NEM (Net Energy Metering)

NEM is a system that allows consumers with a renewable generating system to receive a credit for any surplus electricity they generate that is supplied back to the grid.

This credit is applied to their energy bills and then used to offset some or all of their costs for the energy they consume.

NEM 1.0

This is the first version of Net Energy Metering policies. Under this, if you have a solar power system you can sell any extra electricity you generate back to the electricity grid, usually at the retail price.

The NEM 1.0 scheme took effect for anyone signing up before July 1st 2017. The package includes non-bypassable charges, a $1 monthly connection fee, and average savings of $245 per month for a 10 kW system.

NEM 2.0

NEM 2.0 allows you to sell excess electricity, but with a small charge for the electricity you use from the grid. This version also introduced time-of-use rates, meaning the value of the energy you send back to the grid can change based on the time of day.

The NEM 2.0 scheme took effect for anyone signing up after July 1st 2017. The package includes bypassable charges of $0.02 per kilowatt-hour, a $75 one-time connection fee, a $10-20 monthly connection fee, and average savings of $204 per month for a 10 kW system.

NEM 3.0

NEM 3.0 typically offers different rates for the excess power you generate and can include additional fees. Its aim is to balance the growing benefits of using solar power with the ongoing costs of maintaining the overall electricity grid.

The NEM 3.0 scheme was approved on December 15th 2022. The package includes bypassable charges of $0.04 per kilowatt-hour, an $8 monthly connection fee, a fee of $12-16 per month for SCE and SDG&E customers, or $48-64 per month for a typical system, and average savings of $70 per month for a 10 kW system.


This is a device that is often used in string solar systems to realize module-level production and monitoring. This allows for better output performance and increased flexibility.


This is a type of wireless communication technology used for data transmission between devices in a solar power system. Sub-1G operates on a frequency below 1GHz and can penetrate obstructions, making it more stable and able to transmit data across long distances. This is especially useful in areas where interference issues are common.