Glossary of solar terms

In this article we will explain the meaning of various solar, and Sun Exchange, terms.

There are many words and acronyms in the world of solar energy and money that are daunting and sometimes even down right bizarre. We don’t want these words to scare you away. More often than not, the concepts behind these words are actually quite simple!

We want to help you learn to ‘speak solar’ so we have put together this glossary of terms for you so you can fully understand the opportunities we are hosting, even if you have never invested in
anything before. If you are still confused, drop us an email or contact an Independent Financial Advisor.

  • Solar cells: A solar cell is physical product. Purchased through The Sun Exchange, you are provided with legal contracts relating to the cells, which make possible its lease. Solar cell ownership enables The Sun Exchange to arrange for the lease of electricity generation equipment to the Consumer, and can generate lease rentals that directly depend on the timing and amount of energy generation, among other things.
  • Unit Price: The cost of one solar cell, which is stated on page 2 of this document.
  • The Sun Exchange Bewind Trust: The Bewind Trust structure is ideal for holding assets such as your solar cells, as the assets/property are always owned by you under your name. Any cash flows generated by your solar cell assets are passed through to you without changing form - the Trust takes in rental income and distributes rental income. This allows Sun Exchange to hold your assets in a Trust that is governed by Trustees and greatly reduces compliance and bankruptcy risks.
  • Project Lease Agreement: An agreement between the Sun Exchange Bewind Trust and the energy user establishing the duration, pricing, and other terms of lease of the Solar cells and Solar Equipment.
  • Solar cell Owners Lease Agreement: An agreement between the Sun Exchange Bewind Trust and Solar Cell Owners, establishing the lease of the solar cells to Sun Exchange Bewind Trust.
  • Solar cells Lease Rental: The amount paid to each lessor by the energy user. Lease Rental will effectively be paid to you in return for allowing usage of the solar cells. The Lease Rental is calculated as Energy Output measured in kWh x Per kWh Price, less expenses, taxes, fees, and deposits to reserves.
  • Sale period: The window of time where you can place an order for solar cells. The sale is open for up to 30 days and at our discretion an additional 60 days. Purchases are arranged on a “first come, first served” basis.
  • Equivalent Energy Price: The price at which the energy user must purchase electricity generated by your cells. The price is adjusted annually.
  • Solar Energy Consumption: The amount of kilowatt hours (kWh) consumed by the energy user from the solar system during a given period
  • Kilowatt hour (kWh): A kilowatt hour is a unit of electricity – a kilowatt hour is equivalent to one kilowatt (1 kW) of electrical power for one hour (1 h) of time. A megawatt hour (MWh) is one thousand kilowatt hours.
  • Kilowatt peak (kWp): Kilowatt or kilowatts peak are used in the solar photovoltaic industry to measure the maximum potential output, the peak output, of a photovoltaic module. By setting certain standard conditions, the industry can compare the potential output of one module with another.
  • Target Cell Number: The total number of solar cells sold such that we can pay for the engineering, procurement, and construction of the solar energy system and to pay various other fees and expenses associated with the project.
  • Internal Rate of Return (IRR): Put simply, the IRR is your projected income minus the original purchase price of your solar cells. The higher the IRR, the more you are expected to earn from the project.
  • USD: United States Dollars
  • BTC: Bitcoin
  • ZAR: South Africa Rand
  • PV: Photovoltaic. The photovoltaic effect is the creation of voltage or electric current in a material upon exposure to sunlight. Sunlight is absorbed, causing excitation of an electron or other charge carrier to a higher-energy state. This creates an electric potential (or voltage) is produced by the separation of charges.
  • Balance of equipment: All of the equipment in the solar system, excluding the solar modules.
  • Lessee: A participant of a leasing contract, having the right of use of property from its real owner. See also off-taker.
  • Lessor: A participant of a leasing contract, who takes possession of the property and provides it as a leasing subject to the lessee for temporary use
  • Consumer Price Index: A consumer price index (CPI) measures changes in the price level of a market basket of consumer goods and services purchased by households. The South African CPI can be viewed at
  • EPC: Engineering, procurement and construction company. Designs, purchases, and installs the equipment creating the plant.
  • O&M: The company charged with administration, conduct of operations, equipment status control, and preventive and corrective maintenance of the plant. Controls the performance of maintenance in an efficient and safe manner such that economical, safe, and reliable plant operation is optimised.
  • Delinquency: Commonly refers to a situation where a Lessee is late or overdue on a payment. In the case of The Sun Exchange, failure to pay on the scheduled date, and post due for up to 30 days
  • Default: Default can occur when an energy user fails to pay Lease Rental for more than 60 days. Default may also occur if the energy user is insolvent, is petitioned to bankruptcy, or
    applies for bankruptcy. Other events of default are listed in the Cell Owners Lease Agreement. If an event of Default occurs, unpaid amounts become immediately due. Failure to pay could result in loss of principal and future Lease Rental
  • Inverter: A power inverter, or inverter, is an electronic device or circuitry that changes direct current (DC) to alternating current (AC).
  • Early Energy Date (EED): The date that a solar system is switched on. Any energy generated during "early energy" is considered a bonus as this period falls outside the official lease term.  This period is for the EPC to address any operational issues that can only be identified and fixed once the system is turned on. Depending on the severity of any identified issues, this period can last a few days to a few months. 
  • Commercial Operation Date (COD): The date that a solar system officially becomes operational and the date that the lease term begins. This happens only once Sun Exchange has accepted the system from the EPC.
  • Kick-off meeting (KOM): A kick-off meeting is when Sun Exchange, the solar installation partner (EPC) and the energy user (often referred to as 'the off-taker') get together to discuss, and agree upon, the final logistics of the solar plant installation. This includes the locking down of the exact timeline and identifying any site specific requirements such as locating safety barrier areas and on-site storage placement. It also puts the energy user in touch with key members of the Sun Exchange team and gives them the opportunity to have any questions they may have on the process answered. A kick-off meeting taking place means the start of the physical solar installation is imminent.
  • Site Establishment:  Setting up the site logistics. This includes demarcating safety areas, points of access etc. 
  • Export: The act of sending excess energy, generated by your solar cells, to the local grid.
  • SSEG: Small Scale Embedded Generation
  • ED: Education Department. Often this term is prefaced with "WC" which refers to Western Cape.