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Acronyms Decoded: PV, PPA, ROI, kWh…

If you’ve recently stepped into the world of solar energy, chances are you’ve come across a flood of acronyms that sound more like alphabet soup than everyday language. Don’t worry—you’re not alone! In this blog, we’ll decode some of the most common terms you’ll hear in solar energy and renewable investments so you can confidently join the conversation.

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1. PV – Photovoltaic

“PV” stands for photovoltaic, the technology that converts sunlight into electricity.

• Photo = Light
• Voltaic = Electricity (named after Alessandro Volta, a pioneer in electricity)

When someone says “PV system,” they’re simply talking about solar panels and the equipment that generates solar power.

2. PPA – Power Purchase Agreement

A PPA is a long-term contract where a business or consumer agrees to purchase electricity directly from a solar provider at a fixed rate.

• No upfront investment in panels is needed.
• You only pay for the energy you use.
• Often, the price per unit (kWh) is lower than your utility rate.

Think of it like a subscription plan—but instead of Netflix, you’re subscribing to solar power.

3. ROI – Return on Investment

ROI is a financial term that measures how much money you gain from your solar investment compared to what you spent.

Formula:

• ROI=Total Savings or ProfitTotal Investment×100ROI = \frac{\text{Total Savings or Profit}}{\text{Total Investment}} \times 100ROI=Total Investment/Total Savings or Profit​×100

For example, if you invest ₹1,00,000 in a solar setup and save ₹20,000 annually on electricity bills, your ROI is 20% per year. Pretty powerful, right?

4. kWh – Kilowatt-hour

This one is crucial. A kWh (kilowatt-hour) is a measure of energy usage.

• 1 kWh = using 1000 watts of power for 1 hour.

Examples:

• Running a 100W fan for 10 hours = 1 kWh.
• A fridge might use 1–2 kWh per day.
• Your monthly electricity bill shows total kWh consumed.

When solar installers talk about system size and savings, they often calculate how many kWh your panels can generate.

5. Other Acronyms You Might Hear

• O&M – Operations and Maintenance: Ongoing care of solar systems.
• LCOE—Levelized Cost of Energy: The average cost of generating one unit of electricity over the system’s lifetime.
• FiT – Feed-in Tariff: A policy where you get paid for sending excess solar power back to the grid.
• IRR – Internal Rate of Return: A more advanced way to measure solar profitability over time.

🌞 Final Thoughts

The solar industry may love its acronyms, but once you understand them, they’re not so intimidating. From PV panels on your roof to calculating your ROI in kWh savings, each term helps you see the bigger picture: clean energy that saves money and powers a sustainable future.

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