Solar & battery glossary

Plain-English definitions of the terms you’ll see in solar proposals, contracts and Texas electricity plans.

Kilowatt (kW)

A measure of power — how much electricity something uses or produces at one moment. Solar systems and battery output are rated in kW.

Kilowatt-hour (kWh)

A measure of energy — 1 kW used for one hour. Your bill and battery capacity are measured in kWh.

Price per watt ($/W)

Total system price divided by its size in watts; the standard way to compare solar quotes.

Usable capacity

How much energy (kWh) a battery can actually deliver to your home.

Continuous power output

How much power (kW) a battery can deliver at once — determines what can run at the same time.

LFP (lithium iron phosphate)

The battery chemistry used in nearly all new home batteries, valued for long life and thermal stability.

Inverter

Converts DC power from panels or batteries into the AC power your home uses.

Microinverter

A small inverter on each panel; reduces the impact of shade and allows panel-level monitoring.

Hybrid inverter

An inverter that manages both solar and battery, such as the one built into Tesla Powerwall 3.

AC-coupled battery

A battery that connects on the AC side of your home, making it easier to add to existing solar.

Backup gateway / transfer switch

Equipment that isolates your home from the grid during an outage so a battery can power it safely.

Grid-tied solar

A solar system connected to the utility grid; it shuts off in an outage unless paired with backup equipment.

Anti-islanding

A required safety feature that stops grid-tied solar from sending power onto the grid during an outage.

Net metering

A billing rule that credits exported solar at or near the retail rate. Texas has no statewide net metering.

Solar buyback plan

A Texas retail electricity plan that credits you for exported solar power on the provider’s terms.

Retail electric provider (REP)

The company you choose to buy electricity from in deregulated Texas areas.

TDU / wires company

The utility that owns the poles and wires (Oncor for most of DFW) and handles interconnection.

ERCOT

Electric Reliability Council of Texas — operates the grid serving most of Texas.

Electricity Facts Label (EFL)

The standardized disclosure each Texas retail plan must publish, showing price per kWh at set usage levels.

Interconnection

The utility process that approves your system to connect to the grid.

Permission to operate (PTO)

The utility’s final approval to turn on your grid-connected system.

Solar PPA

Power purchase agreement — a company owns the system on your roof and sells you its power per kWh, usually for 20–25 years. You never own it.

Solar lease

A company owns the system and you pay a fixed monthly amount to use it, usually for 20–25 years. You never own it.

Solar loan

A loan that pays for a solar or battery system you own from day one; fixed payments end when it’s paid off.

APR

Annual percentage rate — the yearly cost of a loan, including interest and certain fees. Compare APRs, not just monthly payments.

Dealer fee

A fee some solar lenders charge the installer, usually built into the system price. Ask for the cash price and the financed price.

Escalator

An annual percentage increase in a lease payment or PPA rate.

Third-party ownership (TPO)

Leases and PPAs, where a company — not the homeowner — owns the system.

§25D

The federal Residential Clean Energy Credit for homeowner purchases; ended for expenditures after Dec 31, 2025.

Form 50-123

Texas Comptroller form to claim the solar property-tax exemption with your county appraisal district.

SB 1036

Texas’ 2025 Residential Solar Retailer Regulatory Act (Occupations Code ch. 1806), enforced by TDLR.

TDLR

Texas Department of Licensing and Regulation — registers solar retailers and salespeople and takes complaints.

Virtual power plant (VPP)

A network of home batteries coordinated to support the grid, often paying credits to participants.

ADER

Aggregated Distributed Energy Resource — ERCOT’s pilot that lets groups of home batteries serve the grid.

Self-consumption

Using your own solar power on site instead of exporting it — usually the most valuable use in Texas.

Production estimate

The proposal’s forecast of how many kWh your system will make each year; check its shade and orientation assumptions.

Degradation

The gradual loss of panel output over time, roughly 0.5% per year on average.

Critical loads panel

A sub-panel with the essential circuits a battery backs up in a partial-home design.

Soft starter

A device that reduces an AC unit’s startup surge so a battery can run it more easily.

IEC 61215

International panel test standard that includes a 25 mm (1-inch) ice-ball hail impact test.