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Clean Energy Policy Glossary

Alternative compliance payment (ACP)

Payment that utilities or other entities that do not meet their RES requirements are mandated to pay; usually defined in monetary units per kilowatt-hour

Balance of plant (balance of system)

Infrastructure elements of a wind plant other than the turbines (e.g., substation hardware, cabling, wiring, access roads, and crane pads)

Building Energy Code

Building energy codes are regulatory instruments that specify minimum energy efficiency standards for the residential and commercial building sectors. Building energy codes commonly mandate certain energy efficiency characteristics for building technologies. As another approach, outcome-based building energy codes are aligned with technology performance and provide target energy use levels for a building as a whole. Building codes can be mandatory or voluntary and are often complemented by other energy efficiency building incentives. Building technologies and design elements that can be included in a building code are: the building envelope; heating, ventilation, and air conditioning (HVAC) systems; lighting; and service water heating systems. Learn more. (Sources: IEA 2014; VanGeem and Colker 2014; EPA 2015; Rosenberg et al. 2015; IPEEC 2015; EERE Toolkit Definitions)


Amount of electrical power delivered or required for which manufacturers rate a generator, turbine, transformer, transmission circuit, station, or system

Capital costs

Total investment cost for a power plant, including balance-of-plant costs

Competitive renewable energy zones (REZ)

Locations identified and defined by governments as having strong renewable energy potential and reduced barriers for renewable energy development

Concentrating solar power (CSP)

Technology that concentrates solar thermal power using mirrors or lenses and then converts the energy to heat a steam turbine for power generation

Distributed wind/generation

Wind turbines that are connected either physically or virtually on the customer side of the meter to offset all or a portion of the energy consumption at or near the location of the project, or that are connected directly to the local grid to support grid operations


The process of distributing electricity—Distribution usually refers to the series of power poles, wires, and transformers that run between a high-voltage transmission substation and a customer’s point of connection.

Feed-in tariff (FIT)

A guaranteed per kilowatt-hour payment to renewable energy developers for renewable electricity produced and “fed” into the grid—These payments are established in long-term purchase agreements that provide market certainty for developers. Learn more.

Gigawatt (GW)

A unit equivalent to 1,000,000 kilowatts of electrical power; large, utility-scale energy systems are often measured in gigawatts

Gigawatt-hour (GWh)

A unit or measure of electricity supply or consumption of one million kilowatts over a period of one hour

Greenhouse gases (GHGs)

Gases such as water vapor, carbon dioxide, methane, and low-level ozone that are transparent to solar radiation but opaque to long-wave radiation—These gases contribute to the greenhouse effect.


An electricity transmission and distribution system—See also power grid and utility grid.


Rules and processes by which a distributed energy system is “plugged into” the utility grid

Investment tax credit (ITC)

Tax credit that can be applied for the purchase of equipment such as renewable energy systems

Kilowatt (kW)

A standard unit of electrical power, which is instantaneous capability equal to one thousand watts

Kilowatt-hour (kWh)

A unit or measure of electricity supply or consumption of one thousand Watts over a period of one hour


Amount of electrical power delivered or required at any specific point or points on a system—The requirement originates at the consumer’s energy-consuming equipment.

Megawatt (MW)

Standard measure of electrical power—One megawatt is equal to 1,000 kilowatts or 1 million watts; larger renewable energy systems for businesses and public buildings are often measured in megawatts.

Megawatt-hour (MWh)

A unit of energy or work equal to1,000 kilowatt-hours or 1 million watt-hours


Policy that allows customers to produce onsite electricity and sell excess generation to the utility at a set price

Photovoltaic (PV)

Method of generating electrical power by converting sunlight directly into electricity using semiconducting solar panels


Rate of production or consumption of energy

Power purchase agreement (PPA)

Financing arrangement in which a third-party developer owns, operates, and maintains a renewable energy system, and a host customer agrees to purchase the system’s electric output for a predetermined period—Most energy consumers use a PPA to utilize solar energy rather than purchasing the system themselves.

Production tax credit (PTC)

A U.S. federal, per-kilowatt-hour tax credit for electricity generated by qualified energy resources—Originally enacted as part of the Energy Policy Act of 1992, the credit expired at the end of 2001, was extended in March 2002, expired at the end of 2003, was renewed on October 4, 2004, extended through December 31, 2008, extended through 2009, extended through 2012, expired December 2012, extended for projects starting construction prior to January 1, 2014.

Public benefit fund (PBF)

Device used to guarantee financial support for renewable resources, including wind energy, energy efficiency programs, and low-income support initiatives

Public utility commission

Governing body that regulates the rates and services of a utility

Renewable energy

Energy derived from resources that are regenerative or that cannot be depleted—Types of renewable energy resources include wind, solar, biomass, geothermal, and moving water.

Renewable energy certificate (REC)

Mechanism created by a state statute or regulatory action to make it easier to track and trade renewable energy—A single REC represents a tradable credit for each unit of energy produced from qualified renewable energy facilities, thus separating the renewable energy’s environmental attributes from its value as a commodity unit of energy. Under a REC regime, each qualified renewable energy producer has two income streams: one from the sale of the energy produced and one from the sale of the RECs. The RECs can be sold and traded, and their owners can legally claim to have purchased renewable energy. See also guarantees of origin.

Renewable portfolio standard (RPS)

A standard, under which a certain percentage of a utility’s overall or new generating capacity or energy sales must be derived from renewable resources (e.g., 1% of electric sales must be from renewable energy by a certain year)—An RES most commonly refers to electricity sales measured in megawatt-hours, as opposed to electrical capacity measured in megawatts.

Reverse auction

Financing mechanism in which a planned purchase of a stipulated amount of energy is announced in order to receive competitive bids from developers to obtain the lowest possible price for energy

Streamlined permitting

An effort to consolidate the permitting process through the development of renewable energy zones, wind energy areas, or the reduction of agency contacts needed for wind energy permitting.

System benefits charge turbine

A per-kilowatt-hour levy on electric power consumption that can be used to subsidize the cost difference between renewable and traditional generating facilities, provide energy efficiency services, fund public energy education, provide low-income energy assistance, and support research and development


Wind energy conversion device that produces electricity—See also wind turbine.

Wind energy

Energy generated by using a wind turbine to convert the mechanical energy of the wind into electrical energy—See also wind power.

Wind generator

Wind energy conversion system designed to produce electricity

Wind plant or wind power plant

Arrays of wind turbines and other components including foundations, towers, underground cables (used to collect the power from the individual turbines), step-up transformers, and switchgear connected through a single point to the transmission grid; group of wind turbines interconnected to a common utility system

Wind power

Power generated by using a wind turbine to convert the mechanical power of the wind into electrical power—See also wind energy.

Wind turbine

Device that converts wind energy to electricity