Power and energy finance glossary

Kilowatt peak. The rated output of a solar PV array under standard test conditions, used as the headline size of a commercial solar system.

Quotes and funding proposals for solar are usually priced per kWp installed, so it is the number that lets you compare two installers on a like for like basis.

Kilowatt hour. A unit of energy: one kilowatt of power delivered for one hour. Consumption and battery capacity are both measured in kWh.

How a site's electricity demand varies across the day, week and year, usually taken from half hourly meter data.

The load profile decides whether solar, storage or a change of tariff is the right first move. It is the first thing we ask for when a project comes in.

Meter readings recorded every 30 minutes for larger commercial supplies, available from your supplier or data collector.

Twelve months of half hourly data turns a rough energy saving estimate into a defensible one, which matters when a funder is assessing a project on its savings.

Combined heat and power. A unit that generates electricity on site and captures the waste heat for process or space heating.

Generation and distribution equipment hired or owned for short term use: events, construction sites, outages and seasonal peaks.

Diesel, gas or battery plant held on site to carry critical load when the mains supply fails.

Battery energy storage system. The battery modules, inverter, controls, enclosure and protection that together store and release electricity.

A funder looks at the whole BESS, not just the cells, because the inverter and controls carry much of the cost and much of the warranty risk.

The ratio between a battery's power rating and its energy capacity. A 1C system can discharge its full capacity in one hour, a 0.5C system in two.

Two systems quoted at the same kWh can behave very differently. C rate is what tells you whether a battery can actually cover your peak.

How much of a battery's capacity is used in a cycle, expressed as a percentage. Usable capacity is lower than nameplate capacity.

The number of charge and discharge cycles a battery is warranted to deliver before its capacity falls to a stated percentage of nameplate.

Cycle life and warranty term should sit comfortably beyond the finance term. If they do not, the funding structure needs to change.

Using stored energy to cut the highest points of site demand, reducing capacity charges and sometimes avoiding a supply upgrade.

Charging a battery when electricity is cheap and discharging when it is expensive, arbitraging the difference across the day.

Distribution network operator. The regional company that owns the local electricity network and approves new connections and exports.

DNO timelines are the single most common reason an otherwise sound project slips. Funders will ask where the application sits.

The Great Britain engineering recommendation covering connection of larger generation and storage to the distribution network.

Smaller installations may connect under G98 notification. Anything of scale, including most commercial batteries, goes through G99 application and approval.

A control scheme that caps how much power a site can push back onto the network, often used to secure a faster connection agreement.

The element of a commercial electricity bill tied to the maximum demand a site can draw, rather than the units consumed.

Charging infrastructure installed at a company's own site to refuel a fleet overnight or between shifts.

A charger that supplies direct current straight to the vehicle battery, typically 50kW and above, for fast turnaround.

The software that manages charger access, load balancing, tariffs and billing across a charging estate.

Software and installation are often a material share of a charging project's cost. Both can usually sit inside the funded package.

Compressed natural gas. An alternative HGV fuel, including biomethane variants, requiring specific vehicles and refuelling access.

The full cost of running an asset across its life: purchase or finance cost, energy or fuel, maintenance, downtime and residual value.

A funding structure where the business pays instalments and takes ownership of the asset at the end of the term.

Common where the business wants the asset on balance sheet and expects to keep it well beyond the finance term.

The funder buys the asset and rents it to the business for an agreed term, with the business carrying most of the risks and rewards of ownership.

A rental structure where the funder retains a residual interest in the asset and the business returns it at the end of the term.

A larger final payment at the end of an agreement, used to reduce the monthly cost during the term.

The value a funder expects an asset to hold at the end of the term, which shapes how much of the cost has to be repaid during it.

Equipment with limited resale value or that is hard to recover once installed, such as cabling, groundworks and some fit out.

Energy projects usually mix hard and soft costs. Getting the soft element funded is often the difference between a project running and stalling.

Funding structured around a project and the cash it is expected to generate, rather than solely against the balance sheet behind it.

Funds released to suppliers in tranches as an installation progresses, rather than in one drawdown on completion.

Most energy installs need deposits and interim payments. A structure without stage payments will not match the build programme.

The ratio between the cash a business or project generates and the repayments it has to make. Funders use it to test headroom.

A commitment from a director to cover the business's obligation if the business cannot. Often requested on newer or smaller trading entities.

UK tax relief on qualifying capital expenditure, which can change the effective cost of buying plant and machinery.

Treatment depends on the structure used and the entity's tax position. Confirm the position with your accountant before relying on it.

The cash a business needs to run day to day. Funding an energy asset rather than buying outright keeps that cash in the business.

How long a project takes to repay its cost from the savings or revenue it produces.