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Clean Energy Finance 101

The articles on our site track and inspire fresh ways to unlock value from sustainable energy infrastructure. We use technical terms the way practitioners do, but we get that sometimes a term can freeze your eyes as you read. This glossary aims to keep you going. Please use it as you will and share terms you think we should add by reaching out to



Known as “45Q” for where it lives in the US tax code, the initial version of the code was intended to facilitate two types of carbon capture: enhanced oil recovery and underground storage. The bill re-appeared in 2017, now called the FUTURE Act (Furthering carbon capture, Utilization, Technology, Underground storage, and Reduced Emissions Act). It’s a tax credit, not a tax deduction. Credits are transferrable. 45Q initially sends credits to the owner of the carbon capture equipment but allows them to be transferred to another company involved in handling the CO2. There are size requirements for eligibility, and they vary by emissions source and application of CO2. Construction must begin by January 1, 2024. Credits can be claimed for 12 years. The clock starts ticking once operation begins. (You'll note that this is longer than the 10 years over which the wind production tax credit can be claimed.) The credit value adjusts with time, linearly, and will be indexed to inflation beyond the linear increase. Projects that use the credit for making products must demonstrate a favorable lifecycle analysis (LCA) under the Clean Air Act. Source: American Energy Society 



A US tax classification for "charitable organizations" which are not-for-profit entities that receive tax exemptions. All profits made by a 501(c)(3) organization must be used solely for the advancement of the charitable cause and not for the benefit of any shareholder or individual. 501(c)(3)'s are not allowed to raise private equity. Source: Investopedia



The average annual return (AAR) is a percentage used when reporting the historical return, such as the three-, five-, and 10-year average returns of a mutual fund. Source: Investopedia


To abolish by authoritative action, annul. Source: Merriam-Webster


Action by the lenders to make the whole of their debt due and payable following an Event of Default. Source: Principles of Project Finance, E.R. Yescombe

Accounts Payable

Accounts payable (AP) is an account within the general ledger that represents a company's obligation to pay off a short-term debt to its creditors or suppliers. Another common usage of "AP" refers to the business department or division that is responsible for making payments owed by the company to suppliers and other creditors. Source: Investopedia

Accounts Receivable

Accounts receivable (AR) is the balance of money due to a firm for goods or services delivered or used but not yet paid for by customers. Accounts receivables are listed on the balance sheet as a current asset. AR is any amount of money owed by customers for purchases made on credit. Source: Investopedia

Accreted Interest

Accreted interest is the interest that accrues on a loan that is added to the principal rather than being paid as interest as it accrues. Source: Law Insider


An aggregator is an intermidary (e.g., a company) that groups distinct agents in a power system (i.e., consumers, producers, prosumers, or any mix thereof) to act as a single entity when engaging in power system markets (both wholesale and retail) or selling services to the system operator(s). In a DER system, an aggregator may link electricity end-users and DER owners and the power system participants who wish to serve these end-users or exploit the services provided by these DERs. Source: MIT Energy

Air mass coefficient

The air mass coefficient (AM) defines the direct optical path length through the Earth's atmosphere, expressed as a ratio relative to the path length vertically upwards, i.e. at the zenith. The air mass coefficient can be used to help characterize the solar spectrum after solar radiation has traveled through the atmosphere. The air mass coefficient is commonly used to characterize the performance of solar cells under standardized conditions. Source: Wikipedia


Albedo is a measure of how much light that hits a surface is reflected without being absorbed.Something that appears white reflects most of the light that hits it and has a high albedo, while something that looks dark absorbs most of the light that hits it, indicating a low albedo. Source: North Carolina Climate Office


An algorithm is a set of instructions that produces an output or a result, and algorithms can be simple scripts or complicated programs. Blockchain algorithms are the mechanism by which the entire process of adding to the chain of records through the validation of transactions occurs. For example, miners validate transactions to be recorded to the blockchain and mining requires the application of an algorithm to validate and retrieve data. Source: GoodAudience

Alternate Current

Alternating current, abbreviation AC, flow of electric charge that periodically reverses. It starts, say, from zero, grows to a maximum, decreases to zero, reverses, reaches a maximum in the opposite direction, returns again to the original value, and repeats this cycle indefinitely. Source: Britannica Encyclopedia

Alternative Underwrite

The utilization of alternative data, assessments, lenders, or otherwise innovative models of lending in order to assess risk, often with the outcome of increasing access to credit.


Amortization is an accounting technique used to periodically lower the book value of a loan or intangible asset over a set period of time. The term "amortization" can refer to two situations. First, amortization is used in the process of paying off debt through regular principal and interest payments over time. An amortization schedule is used to reduce the current balance on a loan, for example a mortgage or car loan, through installment payments. Second, amortization can also refer to the spreading out of capital expenses related to intangible assets over a specific duration – usually over the asset's useful life – for accounting and tax purposes. Source: Investopedia

Amortized loan

An amortized loan is a type of loan with scheduled, periodic payments that are applied to both the loan's principal amount and the interest accrued. An amortized loan payment first pays off the relevant interest expense for the period, after which the remainder of the payment is put toward reducing the principal amount. Source: Investopedia

Ancillary Services

The term ancillary services is used to refer to a variety of operations beyond generation and transmission that are required to maintain grid stability and security. These services generally include, frequency control, spinning reserves and operating reserves. Traditionally ancillary services have been provided by generators, however, the integration of intermittent generation and the development of smart grid technologies have prompted a shift in the equipment that can be used to provide ancillary services. Source: Wikipedia


Anemometer, device for measuring the speed of airflow in the atmosphere, in wind tunnels, and in other gas-flow applications. Most widely used for wind-speed measurements is the revolving-cup electric anemometer, in which the revolving cups drive an electric generator. Source: Britannica Encyclopedia

Angel Investors

An angel investor is usually a high net worth individual who funds startups at the early stages, often with their own money. Angel investing is often the primary source of funding for many startups who find it more appealing than other, more predatory, forms of funding. The support that angel investors provide startups fosters innovation which translates into economic growth. These types of investments are risky and usually do not represent more than 10% of the angel investor's portfolio. Source: Investopedia

Angle of Attack

The angle of attack is the angle between the reference line of a body and relative wind. On an airfoil such as one on a wind turbine, it is the angle between the chord line and the relative wind vector. Source: University of Hawaii


An annuity is a contract between you and an insurance company in which you make a lump-sum payment or series of payments and, in return, receive regular disbursements, beginning either immediately or at some point in the future. Source: Investopedia

Annuity Future Value

The future value of an annuity (AFV) is the value of a group of recurring payments at a certain date in the future, assuming a particular rate of return, or discount rate. The higher the discount rate, the greater the annuity's future value. Source: Investopedia

Annuity Present Value

The present value of an annuity (APV) is the current value of future payments from an annuity, given a specified rate of return, or discount rate. The higher the discount rate, the lower the present value of the annuity. Source: Investopedia

Annuity Present Value Factor

The present value annuity factor (APV Factor) vis used to calculate the present value of future one dollar cash flows. Source: Finance Formulas


Anode, the terminal or electrode from which electrons leave a system. In a battery or other source of direct current the anode is the negative terminal, but in a passive load it is the positive terminal. For example, in an electron tube electrons from the cathode travel across the tube toward the anode, and in an electroplating cell negative ions are deposited at the anode. Source: Britannica Encyclopedia

Application Programming Interface

An application programming interface, or API, is a set of programming code that queries data, parses responses, and sends instructions between one software platform and another. In the context of trading, a trader will often use an API to establish a connection between a set of automated trading algorithms and the trader's preferred trading broker platform for the purpose of obtaining real-time pricing data and place trades. Source: Investopedia

ASC 842

ASC 842 is the new lease accounting standard published by the Financial Accounting Standards Board (FASB). It replaced the previous US GAAP leasing standard, ASC 840, which is almost 40 years old. Source:

Asset Class

A grouping of similar types of investments that behave similarly in the marketplace and are subject to the same laws and regulations. Broad examples of asset classes include:

  • Equities (also known as stocks) – assets that represent ownership of part of a company
  • Bonds – assets that guarantee a fixed payment stream. Bonds are often further categorized based on structure or source of the payments. Examples of these subclasses include municipal, corporate and mortgage bonds.

An asset is a resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide a future benefit. Assets are reported on a company's balance sheet and are bought or created to increase a firm's value or benefit the firm's operations. An asset can be thought of as something that, in the future, can generate cash flow, reduce expenses, or improve sales, regardless of whether it's manufacturing equipment or a patent. Source: Investopedia

Atmospheric Boundary Layer

The bottom layer of the troposphere that is in contact with the surface of the earth. The ABL depth (i.e., the inversion height) is variable in time and space, ranging from tens of meters in strongly statically stable situations, to several kilometers in convective conditions over deserts. During fair weather over land, the ABL has a marked diurnal cycle. During daytime, a mixed layer of vigorous turbulence grows in depth, capped by a statically stable entrainment zone of intermittent turbulence. Source: American Meteorological Society


In physics, attenuation or, in some contexts, extinction is the gradual loss of flux intensity through a medium. For instance, dark glasses and cloouds attenuate sunlight and water and air attenuate both light and sound at variable attenuation rates. Source: Wikipedia

Availability Factor

The availability factor of a power plant is the amount of time that it is able to produce electricity over a certain period, divided by the amount of time in the period. Source: Wikipedia


Balance Sheet

A balance sheet is a financial statement that reports a company's assets, liabilities and shareholders' equity at a specific point in time, and provides a basis for computing rates of return and evaluating its capital structure. It is a financial statement that provides a snapshot of what a company owns and owes, as well as the amount invested by shareholders. Source: Investopedia

Band Gap

A band gap is the distance between the valence band of electrons and the conduction band. Essentially, the band gap represents the minimum energy that is required to excite an electron up to a state in the conduction band where it can participate in conduction.[1] The lower energy level is the valence band, and thus if a gap exists between this level and the higher energy conduction band, energy must be input for electrons to become free. The size and existence of this band gap allows one to visualize the difference between conductors, semiconductors, and insulators. Source: Energy Education, University of Calgary


Baseload power refers to the minimum amount of electric power needed to be supplied to the electrical grid at any given time. Day to day trends of power usage need to be met by power plants, however it is not optimal for power plants to produce the maximum needed power at all times. Therefore there are baseload power plants like coal-fired power plants which provide the minimum needed electricity, and peaking power plants which meet the fluctuating needs. Source: Energy Education, University of Calgary

Basis Risk

Basis risk is the financial risk that offsetting investments in a hedging strategy will not experience price changes in entirely opposite directions from each other. This imperfect correlation between the two investments creates the potential for excess gains or losses in a hedging strategy, thus adding risk to the position. Source: Investopedia

Betz Limit

The Betz limit is the theoretical maximum efficiency for a wind turbine, conjectured by German physicist Albert Betz in 1919. Betz concluded that this value is 59.3%, meaning that at most only 59.3% of the kinetic energy from wind can be used to spin the turbine and generate electricity. Source: Energy Education, University of Calgary

Black Start

A black start is the process of restoring an electric power station or a part of an electric grid to operation without relying on the external electric power transmission network to recover from a total or partial shutdown. Source: Wikipedia

Blackbody Radiation

"Blackbody radiation" or "cavity radiation" refers to an object or system which absorbs all radiation incident upon it and re-radiates energy which is characteristic of this radiating system only, not dependent upon the type of radiation which is incident upon it. The radiated energy can be considered to be produced by standing wave or resonant modes of the cavity which is radiating. Source: Hyper Physics

Blended Capital

A mix of government or non-profit grants, equity investments, and bank loans, or multiple sources of capital. Diversifying the capital sources used by Green Banks can mitigate the risks and alleviate the constraints of relying solely on public capital. In addition, new capital sources can also encourage or enable a Green Bank to create new investment structures. A blended capital approach has enabled CT Green Bank to crowd-in larger pools of private capital, while allowing CT Green Bank to broaden its scope for project selection and work with nontraditional market segments. Source: Coalition for Green Capital


Blocks are digital information stored in a public database (a singular “chain” that is replicated across a network). Blocks can be small amounts of information, but are typically larger chunks of information (the order of magnitude is tens or hundreds of kilobytes) that could include time stamps, digital signatures, as well as the actions performed (e.g., approval of contract, payment requested, quantity of product used, etc.). Typically a block includes hundreds or even thousands of transactions bunded together, including a record of historical transactions and multiple new transactions that include multiple digital signatures and time stamps. Once bundled and verified, the block receives a hash (its own unique identifier) and is added to the chain. The next block to be added to the chain will contain the hash of the previous block as well as its own unique hash as a mechanism to keep things linked in order. Source: Investopedia


A blockchain is one type of a decentralized, distributed digital ledger, or one long chain of records that is linked by written codes that require authorized decoding and encryption across a system of nodes. The entire system of these encoded blocks of information is managed by a p2p network that adheres to protocols for nodal communication and validating new blocks and then replicating the consensus chain across the network--these protocols distinguish blockchain from other types of distributed ledgers. The goal of blockchain is to allow digital information to be recorded and distributed, but not edited. Meeting this goal requires a lot of computing power distributed across a large network and strict "if-then" protocols or algorithms. Source: Investopedia


A bond (corporate, government - treasury and municipal, zero coupon, floating rate) is a fixed income instrument that represents a loan made by an investor to a borrower (typically corporate or governmental). A bond could be thought of as an I.O.U. between the lender and borrower that includes the details of the loan and its payments. Bonds are used by companies, municipalities, states, and sovereign governments to finance projects and operations. Owners of bonds are debtholders, or creditors, of the issuer. Bond details include the end date when the principal of the loan is due to be paid to the bond owner and usually includes the terms for variable or fixed interest payments made by the borrower. Source: Investopedia

Bond valuation

Bond valuation is a technique for determining the theoretical fair value of a particular bond. Bond valuation includes calculating the present value of a bond's future interest payments, also known as its cash flow, and the bond's value upon maturity, also known as its face value or par value. Because a bond's par value and interest payments are fixed, an investor uses bond valuation to determine what rate of return is required for a bond investment to be worthwhile. Source: Investopedia

Bonding Authority

The power of a bank or financial authority to issue bonds in their own name. This includes the ability to securitize future receivables.

Book value

An asset's book value is equal to its carrying value on the balance sheet, and companies calculate it netting the asset against its accumulated depreciation. Book value can also be thought of as the net asset value of a company calculated as total assets minus intangible assets (patents, goodwill) and liabilities. Source: Investopedia

Borehole Temperature Profile

Borehole data are direct measurements of temperature from boreholes drilled into the Earth's crust. Departures from the expected increase in temperature with depth (the geothermal gradient) can be interpreted in terms of changes in temperature at the surface in the past, which have slowly diffused downward, warming or cooling layers meters below the surface. Source: NOAA

Business interruption insurance

Business interruption insurance is a type of insurance that covers the loss of income that a business suffers after a disaster. The income loss covered may be due to disaster-related closing of the business facility or due to the rebuilding process after a disaster. Source: Wikipedia

Byrd-Hagel Resolution

The Byrd–Hagel Resolution was a United States Senate Resolution passed unanimously with a vote of 95–0 on 25 July 1997, sponsored by Senators Chuck Hagel (R-NE) and Robert Byrd (D-WV). The resolution stated that the US should not sign a climate treaty that would 'mandate new commitments to limit or reduce greenhouse gas emissions for the Annex I Parties, unless ...[it]... also mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for Developing Country Parties within the same compliance period', or would result in serious harm to the economy of the United States. This effectively prohibited the US from ratifying the Kyoto Protocol. Source: Wikipedia


Cap and Trade

Cap and Trade is a market-based policy tool for protecting human health and the environment. A cap and trade program first sets an aggressive cap, or maximum limit, on emissions. Sources covered by the program then receive authorizations to emit in the form of emissions allowances, with the total amount of allowances limited by the cap. Each source can design its own compliance strategy to meet the overall reduction requirement, including sale or purchase of allowances, installation of pollution controls, implementation of efficiency measures, among other options. Individual control requirements are not specified under a cap and trade program, but each emissions source must surrender allowances equal to its actual emissions in order to comply. Sources must also completely and accurately measure and report all emissions in a timely manner to guarantee that the overall cap is achieved. Source: California Energy Commission

Capacity Balancing

The requirement imposed by electricity grids or natural gas pipelines that supply and demand be equal over a certain time period. Source: FERC

Capacity Factor

Capacity factor is the ratio between what a generation unit is capable of generating at maximum output versus the unit’s actual generation output over a period of time. These two variables can be significantly different. Source: NMPP Energy

The ratio of actual energy produced by an energy generating unit or system in a given period, to the hypothetical maximum possible (i.e. energy produced from continuous operation at full rated power) Source: Renewable Energy Research Laboratory

Capacity Firming

Use of storage to mitigate rapid output changes from renewable generation due to: a) wind speed variability affecting wind generation and b) shading of solar generation due to clouds. It is important because these rapid output changes must be offset by other “dispatchable” generation. Source: U.S. Department of Energy

Capacity Price

Fixed payment based on $/MW-month based on availability.

Capacity Utlilization

In the context of the electricity industry, capacity utilization refers to the percentage of infrastructure used to successfully deliver electricity over the course of the year. A historically low capacity utilization rate indicates that the existing energy infrastructure is not used efficiently. A large amount of capacity is only leveraged during times of peak demand.  Source: Investopedia


Capital is a term for financial assets, such as funds held in deposit accounts and/or funds obtained from special financing sources. Capital can also be associated with capital assets of a company that requires significant amounts of capital to finance or expand. Source: Investopedia

Capital Expenditures (CapEx)

Capital expenditures (CapEx) are funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings, technology, or equipment. CapEx is often used to undertake new projects or investments by a company. Making capital expenditures on fixed assets can include repairing a roof, purchasing a piece of equipment, or building a new factory. This type of financial outlay is made by companies to increase the scope of their operations or add some economic benefit to the operation. Source: Investopedia

Carbon Capture and Storage

Carbon Capture and Storage (CCS) is a technology that can capture up to 90% of the CO2 emissions pro­duced from the use of fossil fuels in electricity generation and industrial processes, preventing the carbon dioxide from entering the atmosphere. The three stages include capture, transport and the storing the CO2, typically underground. The storage often takes place in depleted oil and gas fields or deep saline aquifer formations. CCS projects are eligible for $50/ton under 45Q. Source: Carbon Capture and Storage Association

Carbon Capture, Utilization, and Storage

Carbon capture utilization is very similar to CCS. The process and technology used to capture CO2 from fossil fuels powered electricity generation remains the same. The main difference is that the end result is not the long term storage of CO2, but the utilization of the gas in industrial processes either on site or elsewhere. CCUS projects are eligible for a $35/ton tax credit under 45Q. Source: International Energy Administration

Carbon Intensity

An carbon intensity (also CI or emission intensity) is the emission rate of a given pollutant relative to the intensity of a specific activity, or an industrial production process; for example grams of carbon dioxide released per MJ of energy produced, or the ratio of greenhouse gas emissions produced to gross domestic product (GDP). Source: Wikipedia

Carbon tax

Carbon pricing curbs greenhouse gas emissions by placing a fee on emitting and/or offering an incentive for emitting less. The price signal created shifts consumption and investment patterns, making economic development compatible with climate protection. Carbon pricing is advancing rapidly as an approach to spur climate action. By 2020, 25 percent of global emissions are expected to be under some carbon pricing mechanism. A large and growing number of non-Annex I countries under the UNFCCC are pursuing carbon pricing: South Korea, China, Thailand, Singapore, Bangladesh, Kazakhstan, South Africa, Côte d’Ivoire, Colombia, Chile, Argentina, Brazil, Mexico, Panama, Trinidad and Tobago, others. Source: UNFCCC

A tax on fossil fuels, especially those used by motor vehicles, intended to reduce the emission of carbon dioxide. Source: Oxford Languages

Cash Sweep

Dedication of surplus cash flow to debt prepayment. Source:  Principles of Project Finance, E.R. Yescombe

Cash Waterfall

Waterfall payment structures require that higher-tiered creditors receive interest and principal payments, while the lower-tiered creditors receive principal payments after the higher-tiered creditors are paid back in full. Debtors typically structure these schemes into such tranches to prioritize the highest-principal loans first because they are also likely the most expensive. Source: Investopedia


Cathode, negative terminal or electrode through which electrons enter a direct current load, such as an electrolytic cell or an electron tube, and the positive terminal of a battery or other source of electrical energy through which they return. This terminal corresponds in electrochemistry to the terminal at which reduction occurs. Within a gas discharge tube, electrons travel away from the cathode, but positive ions (current carriers) travel toward the cathode. Source: Britannica Encyclopedia


Cathode, negative terminal or electrode through which electrons enter a direct current load, such as an electrolytic cell or an electron tube, and the positive terminal of a battery or other source of electrical energy through which they return. This terminal corresponds in electrochemistry to the terminal at which reduction occurs. Within a gas discharge tube, electrons travel away from the cathode, but positive ions (current carriers) travel toward the cathode. Source:  Britannica Encyclopedia

Centrifugal Force

Centrifugal force (CF), a fictitious force, peculiar to a particle moving on a circular path, that has the same magnitude and dimensions as the force that keeps the particle on its circular path (the centripetal force) but points in the opposite direction. Source:  Britannica Encyclopedia

Ceramic Fuel Cell

"A ceramic fuel cell consists of two electrodes (the anode and cathode) separated by a solid electrolyte. A ceramic fuel cell is an all-solid-state energy conversion device that produces electricity by electrochemically combining fuel and oxidant gases across an ionic conducting ceramic. They bypass the conversion of chemical energy of fuel into thermal and mechanical energy, and thus, achieve theoretical efficiency significantly higher than that of conventional methods of power generation. The other characteristics of fuel cells, other than high conversion efficiency, are environmental compatibility, modularity, siting flexibility, and multifuel capability. Ceramic fuel cells, commonly known as solid oxide fuel cells (SOFCs), have been under development for a broad range of electric power generation applications. " (Source: Minh and Takahashi (1995) Science and Technology of Ceramic Fuel Cells. (Links to an external site.))


"Any of various compounds consisting of carbon, hydrogen, chlorine, and flourine used as refrigerants. CFCs are now thought to be harmful to the earth's atmosphere." Source:  U.S. Energy Information Administration

Clean Power Plan

These are the first-ever national standards that address carbon pollution from power plants.
The Clean Power Plan (CPP) cuts significant amounts of power plant carbon pollution and the pollutants that cause the soot and smog that harm health, while advancing clean energy innovation, development and deployment, and laying the foundation for the long-term strategy needed to tackle the threat of climate change. By providing states and utilities ample flexibility and the time needed to achieve these pollution cuts, the Clean Power Plan offers the power sector the ability to optimize pollution reductions while maintaining a reliable and affordable supply of electricity for ratepayers and businesses. Source:  EPA

Coase Theorem

Coase Theorem is a legal and economic theory developed by economist Ronald Coase that affirms that where there are complete competitive markets with no transactions costs, an efficient set of inputs and outputs to and from production-optimal distribution will be selected, regardless of how property rights are divided. Further, the Coase Theorem asserts that if conflict arises over property rights under these assumptions, then parties will tend to settle on the efficient set of inputs and output. Source:  Investopedia

Coefficient of Performance

The coefficient of performance or COP (sometimes CP or CoP) of a heat pump, refrigerator or air conditioning system is a ratio of useful heating or cooling provided to work required.[1][2] Higher COPs equate to lower operating costs. Source:  Wikipedia


Cogeneration is the on-site generation of electricity from waste heat. When generating electricity from coal, natural gas or nuclear power only a fraction of the actual energy content released during combustion is converted into electricity. The remainder of the energy is lost as waste heat. Source:  Energy Education, University of Calgary

Coincidental peak load

The sum of two or more peak loads that occur in the same time interval. Source:  U.S. Energy Information Administration


Collateral is an asset that a lender accepts as security for extending a loan. If the borrower defaults on her loan payments, the lender may seize the collateral and sell it to recoup some or all of his losses. Source:  Investopedia

Commercial Operation Date

The date on which an EPC-contract-based project is complete and the Project Company is ready to begin operations. Source:  Principles of Project Finance, E.R. Yescombe

The commercial operation date is defined as the date after which all testing and commissioning has been completed and is the initiation date to which the seller can start producing electricity for sale (i.e. when the project has been substantially completed). Source:  Wikipedia

Commercial Property-Assessed Clean Energy

A legislatively authorized loan program for commercial energy efficiency and renewable energy improvements by commercial building owners for which repayment usually happens through a property tax bill. Source:  DOE, Investopedia, Better Buildings Solutions Center

Common stock

Common stock is a security that represents ownership in a corporation. Holders of common stock elect the board of directors and vote on corporate policies. This form of equity ownership typically yields higher rates of return long term. However, in the event of liquidation, common shareholders have rights to a company's assets only after bondholders, preferred shareholders, and other debtholders are paid in full. Common stock is reported in the stockholder's equity section of a company's balance sheet. Source:  Investopedia

Community Development Financial Institution

Community Development Financial Institutions (CDFIs) are private sector financial institutions that focus primarily on personal lending and business development efforts in poorer local communities requiring revitalization in the U.S. Source:  Investopedia

Composite Materials

Composite material, also called composite, a solid material that results when two or more different substances, each with its own characteristics, are combined to create a new substance whose properties are superior to those of the original components in a specific application. Source:  Britannica Encyclopedia


Compounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. This growth, calculated using exponential functions, occurs because the investment will generate earnings from both its initial principal and the accumulated earnings from preceding periods. Compounding, therefore, differs from linear growth, where only the principal earns interest each period. Source:  Investopedia

Concentrated Solar Power

Concentrating solar power (CSP) plants use mirrors to concentrate the sun's energy to drive traditional steam turbines or engines that create electricity. The thermal energy concentrated in a CSP plant can be stored and used to produce electricity when it is needed, day or night. Today, roughly 1,815 megawatts (MW) of CSP plants are in operation in the United States. There are several CSP technologies, among them the Parabolic Trough, Compact Linear Fresnel Reflector, Power Tower, and Dish-Engine. Source:  SEIA


A concession is a selling group's take as per a stock or bond underwriting agreement. Source:  Investopedia

Condition Precedent

A condition precedent is a legal term describing a condition or event that must come to pass before a specific contract is considered in effect or any obligations are expected of either party. Source:  Investopedia


Conductivity, term applied to a variety of physical phenomena. In heat, conductivity is the quantity of heat passing per second through a slab of unit cross-sectional area when the temperature gradient between the two faces is unity. Electrical conductivity is the current or the quantity of electricity passing per second through a similar slab when the potential gradient is unity, and it is the reciprocal of the resistivity. Source:  Britannica Encyclopedia

Construction loan

A construction loan is a short-term loan used to finance the building of a home or another real estate project. Source:  Investopedia


A corporation is a legal entity that is separate and distinct from its owners. Corporations enjoy most of the rights and responsibilities that individuals possess: they can enter contracts, loan and borrow money, sue and be sued, hire employees, own assets, and pay taxes. Some refer to it as a "legal person." Source:  Investopedia

Cost of Capital

Cost of capital is the required return necessary to make a capital budgeting project worthwhile. Typically, cost of capital refers to the weighted average of a firm's cost of debt and cost of equity blended together. Companies use the cost of capital to determine whether a project is worth the resources required, while investors use the cost of capital to determine whether an investment is worth the risk compared to the expected return. Source:  Investopedia

Cost of debt

The cost of debt is the effective interest rate a company pays on its debts. It’s the cost of debt, such as bonds and loans, among others. The cost of debt often refers to before-tax cost of debt, which is the company's cost of debt before taking taxes into account. However, the difference in the cost of debt before and after taxes lies in the fact that interest expenses are deductible. Source:  Investopedia

Cost of equity

The cost of equity is the return a company requires to decide if an investment meets capital return requirements. Firms often use it as a capital budgeting threshold for the required rate of return. A firm's cost of equity represents the compensation the market demands in exchange for owning the asset and bearing the risk of ownership. Source:  Investopedia

Cost of Goods Sold

Cost of goods sold (COGS) refers to the direct costs of producing the goods sold by a company. This amount includes the cost of the materials and labor directly used to create the good. It excludes indirect expenses, such as distribution costs and sales force costs. Source:  Investopedia

Cost of preferred stock

Cost of preferred stock is the rate of return required by holders of a company's preferred stock. It is calculated by dividing the annual preferred dividend payment by the preferred stock's current market price. Source:

Cost Plus Contract

A cost-plus contract is an agreement to reimburse a company for expenses plus a specific amount of profit, usually stated as a percentage of the contract’s full price. Source:  Investopedia


A counterparty is the other party that participates in a financial transaction, and every transaction must have a counterparty in order for the transaction to go through. More specifically, every buyer of an asset must be paired up with a seller who is willing to sell and vice versa. Source:  Investopedia


A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a year divided by the face value of the bond in question). Source:  Investopedia

Coupon rate

A coupon rate is the yield paid by a fixed-income security; a fixed-income security's coupon rate is simply just the annual coupon payments paid by the issuer relative to the bond's face or par value. The coupon rate, or coupon payment, is the yield the bond paid on its issue date. This yield changes as the value of the bond changes, thus giving the bond's yield to maturity. Source:  Investopedia


Undertakings given by the Project Company to the lenders. Source:  Principles of Project Finance, E.R. Yescombe

Credit Enhancement

A feature that increases the creditworthiness of an individual or corporate borrower. It is intended to reduce the risk that the investors will not be repaid. One simple type of credit enhancement is a loan loss reserve, which accepts the losses for a portion of the defaults in an asset pool. Other types of credit enhancements include payment mechanisms such as On-Bill Repayment and PACE.

Credit Enhancement

A strategy for enhancing the credit risk profile of a business by providing additional collateral, obtaining insurance guaranteeing payment, or by aranging a third party guarantee. Source:  Investopedia

Credit History

Credit history is a record of a consumer's ability to repay debts and demonstrated responsibility in repaying debts. This information is all contained on a consumer's credit report. Source:  Investopedia

Cross Default

Cross default is a provision in a bond indenture or loan agreement that puts a borrower in default if the borrower defaults on another obligation. Source:  Investopedia

Cure Period

Cure Periods allow the Sponsor or Project Company to take action over the course of a certain period (usually 30 days but may be less or more) to remedy some non-compliance if the Event of Default is capable of being cured.
Source:  Principles of Project Finance, E.R. Yescombe

Cure Rights

In bankruptcy, the right to fix a default so that a creditor cannot pursue its remedies. Source:  Financial Dictionary


Electric current, any movement of electric charge carriers, such as subatomic charged particles (e.g., electrons having negative charge, protons having positive charge), ions (atoms that have lost or gained one or more electrons), or holes (electron deficiencies that may be thought of as positive particles). Source:  Britannica Encyclopedia


Curtailment is a reduction in the output of a generator from what it could otherwise produce given available resources, typically on an involuntary basis. Source:  NREL

Cut-in Speed

The cut-in speed (typically between 6 and 9 mph) is when the blades start rotating and generating power. Source:

Cut-out Speed

The wind speed at which a turbine shuts down to prevent unnecessary strain on the rotor. Source:


Davis-Bacon Act

The Davis-Bacon Act (DBA) (1931) requires all contractors and subcontractors working on federally-funded projects to pay laborers and mechanics no less than the prevailing minimum wage of the locality. Source:  U.S. Department of Energy

Day-Ahead Market

The Day-Ahead Energy Market lets market participants commit to buy or sell wholesale electricity one day before the operating day, to help avoid price volatility. This market produces one financial settlement. Source:  ISO-NE


Debt is an amount of money borrowed by one party from another. Debt is used by many corporations and individuals as a method of making large purchases that they could not afford under normal circumstances. A debt arrangement gives the borrowing party permission to borrow money under the condition that it is to be paid back at a later date, usually with interest. Source:  Investopedia

Debt securities

Debt security refers to a debt instrument, such as a government bond, corporate bond, certificate of deposit (CD), municipal bond, or preferred stock, that can be bought or sold between two parties and has basic terms defined, such as notional amount (amount borrowed), interest rate, and maturity and renewal date. It also includes collateralized securities, such as collateralized debt obligations (CDOs), collateralized mortgage obligations (CMOs), mortgage-backed securities issued by the Government National Mortgage Association (GNMAs) and zero-coupon securities. Source:  Investopedia

Debt Service

Payments of interest and debt principal (q.v.)
installments. Source:  Principles of Project Finance, E.R. Yescombe

Debt Service Coverage Ratio

The ratio between operating cash flow and debt service over any one year of the project. Source:  Principles of Project Finance, E.R. Yescombe

Debt Service Reserve Account

The Debt Service Reserve Account (DSRA) is a cash account that provides reserves when CADS is below the necessary amount to service debt. In the case of a credit agreement, the lender will more than likely impose a clause that requires the DSRA to be funded with a required amount. This amount if often referred to as a target balance. The Debt Service Reserve Account acts as a safety measure to ensure that the necessary payments to lenders can be met. Source:  Pivotal 180

Debt-Service Coverage Ratio

DSCR is a measurement of whether a corporation, agency, indivudial, etc. has sufficient cash flow to pay off its current debt obligations. Investors analyze DSCR to determine whether a company has enough income to cover its debts. A DSCR of less than 1 means that borrower has negative cash flow, meaning they will be unable to cover or pay current debt obligations with their current income. A DSCR of .95, for example, means that the borrower only has sufficient net operating income to cover 95% of annual debt payments. The minimum DSCR a lender will accept depends on current macroeconomic conditions (ie. if the economy is growing, the lender may be more forgiving of a lower DSCR). Source:  Investopedia

Debt-to-Income Ratio

The DTI ratio is one metric that lenders use to measure an individual’s ability to manage monthly payments and repay debts. DTI is calculated as the total monthly debt payments divided by gross monthly income, and represents the percentage of an individual's gross monthly income that goes to paying their monthly debt payments. A low DTI ratio demonstrates a good balance between debt and income, and banks and other credit providers generally want to see low DTIs before issuing loans to a potential borrower. Source:  Investopedia


A policy strategy designed to ensure that utilities recover allowed amounts of revenue independent of their sales volumes. The general goal of decoupling is to remove the disincentives utilities typically face when embracing energy efficiency or other measures that reduce consumer usage levels. Source:  Regulatory Assistance Project


Specified amount of expenses that must be paid out of pocket before an insurer will pay the claim. Source:  Course videos

Demand Response

Demond response (DR) schemes can be valuable since they integrate the user as an influenceable entity in order to contribute to system efficiency. Methods of engaging customers in demand response efforts include offering time-based rates such as time-of-use pricing, critical peak pricing, variable peak pricing, real time pricing, and critical peak rebates. It also includes direct load control programs which provide the ability for power companies to cycle air conditioners and water heaters on and off during periods of peak demand in exchange for a financial incentive and lower electric bills. Source:

Demand Response

Demand response is a change in the power consumption of an electric utility customer to better match the demand for power with the supply. Until recently electric energy could not be easily stored, so utilities have traditionally matched demand and supply by throttling the production rate of their power plants, taking generating units on or off line, or importing power from other utilities. Source:  Wikipedia

Demand response programs

Demand response programs are incentive-based programs that encourage electric power customers to temporarily reduce their demand for power at certain times in exchange for a reduction in their electricity bills. Some demand response programs allow electric power system operators to directly reduce load, while in others, customers retain control. Customer-controlled reductions in demand may involve actions such as curtailing load, operating onsite generation, or shifting electricity use to another time period. Demand response programs are one type of demand-side management, which also covers broad, less immediate programs such as the promotion of energy-efficient equipment in residential and commercial sectors. Source:  U.S. Energy Information Administration


Depreciation is an accounting method of allocating the cost of a tangible or physical asset over its useful life or life expectancy. Depreciation represents how much of an asset's value has been used up. Depreciating assets helps companies earn revenue from an asset while expensing a portion of its cost each year the asset is in use. Source:  Investopedia


The elimination of some or all regulations from a previously regulated industry or sector of an industry. Source:  U.S. Energy Information Administration


Diagenesis, sum of all processes, chiefly chemical, by which changes in a sediment are brought about after its deposition but before its final lithification (conversion to rock). Because most sediments contain mineral mixtures in which not all the minerals are in chemical equilibrium with each other, changes in interstitial water composition or changes in temperature or both will usually lead to chemical alteration of one or more of the minerals present. Source:  Britannica Encyclopedia

Diffused Horizontal irradiance

Diffuse Horizontal Irradiance (DHI) is the amount of radiation received per unit area by a surface (not subject to any shade or shadow) that does not arrive on a direct path from the sun, but has been scattered by molecules and particles in the atmosphere and comes equally from all directions. Source:  First Green Consulting

Direct Agreement

A direct agreement is an agreement which gives the lenders to the project direct rights in respect of certain key project documents. Source:  LexisNexis

Direct Air Capture

The capture and sequestration of carbon dioxide directly from the air with an engineered mechanical system. Current techniques use large fans that move ambient air through a filter. The technology is largely nascent and expensive. Source: Carbon Engineering

Direct Current

Direct current, abbreviation DC, flow of electric charge that does not change direction. Direct current is produced by batteries, fuel cells, rectifiers, and generators with commutators. Direct current was supplanted by alternating current (AC) for common commercial power in the late 1880s because it was then uneconomical to transform it to the high voltages needed for long-distance transmission. Source:  Britannica Encyclopedia

Direct normal irradiance

Direct Normal Irradiance (DNI) is the amount of solar radiation received per unit area by a surface that is always held perpendicular (or normal) to the rays that come in a straight line from the direction of the sun at its current position in the sky. Source:  First Green Consulting

Disclosure Schedule

A document that supplements the representations and warranties (and sometimes other provisions) contained in an agreement. The disclosing party typically uses disclosure schedules to disclose exceptions to, as well as to provide information that is too lengthy for inclusion in, the agreement. Disclosure schedules are typically attached to the end of the agreement and incorporated by reference. Source:  Thomson Reuters Practical Law

Discounted cash flow valuation

Discounted cash flow (DCF) is a valuation method used to estimate the value of an investment based on its future cash flows. DCF analysis attempts to figure out the value of an investment today, based on projections of how much money it will generate in the future. This applies to both financial investments for investors and for business owners looking to make changes to their businesses, such as purchasing new equipment. Source:  Investopedia


Discounting is the process of determining the present value of a payment or a stream of payments that is to be received in the future. Given the time value of money, a dollar is worth more today than it would be worth tomorrow. Discounting is the primary factor used in pricing a stream of tomorrow's cash flows. Source:  Investopedia

Distributed Energy Resources

Distributed energy resources are small, modular, energy generation and storage technologies that provide electric capacity or energy where needed. DERs are physical and virtual assets deployed across the distribution grid, typically close to load, and usually behind the meter, which can be used individually or in aggregate to provide value to the grid, individual customers, or both. Examples include solar panels, energy storage, generators, electric vehicles, and combined heat and power systems that typically offer less than 10 MW of capacity. Outputs from DERs can offset the need for supply from a centralized system. Thus, DERs can offer greater customer choice and may present opportunities to optimize overall system investments and provide a range of grid services. Increased use of DERs creates a more decentralized electricity system and changes in the traditional dynamic between local distribution systems and the larger transmission system. Source:  NREL

Distributed Generation

A distributed generation system involves small amounts of generation located on a utility's distribution system for the purpose of meeting local (substation level) peak loads and/or displacing the need to build additional (or upgrade) local distribution lines. Source:  California Energy Comission

Distribution System Operators

The body in charge of the management of the power distribution grid.  (For more information about the future of DSOs, refer to IRENA's Innovation Landscape Brief )

Diurnal Wind Variability

In most locations around the globe it is more windy during the daytime than at night.This variation is largely due to the fact that temperature differences e.g. between the sea surface and the land surface tend to be larger during the day than at night. The wind is also more turbulent and tends to change direction more frequently during the day than at night. Source:  Danish Wind Energy Association

Dividend growth model

Dividend growth model is a valuation model, that calculates the fair value of stock, assuming that the dividends grow either at a stable rate in perpetuity or at a different rate during the period at hand. The dividend growth model determines if a stock is overvalued or undervalued assuming that the firm’s expected dividends grow at a value g forever, which is subtracted from the required rate of return (RRR) or k. Source:  Investopedia

Dividend yield

The dividend yield, expressed as a percentage, is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price. Source:  Investopedia


Doping is the practice of introducing very small amounts of certain foreign atoms into the crystal lattice of a semiconductor to modify its electrical properties. These foreign atoms are referred to as dopants. Often they add charge carriers to the semiconductor by creating either an excess or a deficiency of electrons around the foreign atom. This leads to two distinct types of doping, p-type and n-type. P-type and n-type doping allows for the creation of important circuit components like diodes and transistors. Source:  Energy Education, University of Calgary

Double Declining Balance

The double declining balance (DDB) depreciation method is an accelerated depreciation method that counts as an expense more rapidly (when compared to straight-line depreciation that uses the same amount of depreciation each year over an asset's useful life). Source:  Investopedia

Duck Curve

In utility-scale electricity generation, the duck curve is a graph of power production over the course of a day that shows the timing imbalance between peak demand and renewable energy production. The term was coined in 2012 by the California Independent System Operator. Source:  Wikipedia


Ebb Tide

Ebb tide, seaward flow in estuaries or tidal rivers during a tidal phase of lowering water level. Source:  Britannica Encyclopedia

Ebb Tide

Ebb tide, seaward flow in estuaries or tidal rivers during a tidal phase of lowering water level. Source: Britannica Encyclopedia

Embedded Lease

Embedded leases are components within contracts that entail the use of a particular asset, where the user has control over that asset. Source: Visual Lease

Emissions Trading System

The EU ETS is the cornerstone of the European Union’s drive to reduce its emissions of manmade greenhouse gases which are largely responsible for warming the planet and causing climate change. The system works by putting a limit on overall emissions from covered installations which is reduced each year. Within this limit, companies can buy and sell emission allowances as needed. This ‘cap-and-trade’ approach gives companies the flexibility they need to cut their emissions in the most cost-effective way. Source: European Commission

Energy Commodities

The term energy commodities refers to a variety of coal, oil, gasoline, and electricity derived products. Source: Financial Terms Dictionary

Energy density

Energy density is the amount of energy that can be stored in a given mass of a substance or system. The higher the energy density of a system or material, the greater the amount of energy stored in its mass. Source: Energy Education, University of Calgary

Energy dependence rate

The dependency rate shows the extent to which an economy relies upon imports in order to meet its energy needs. It is measured by the share of net imports (imports - exports) in gross inland energy consumption (meaning the sum of energy produced and net imports). Source: Eurostat

Energy efficiency

A ratio of service provided to energy input (e.g., lumens to watts in the case of light bulbs). Services provided can include buildings-sector end uses such as lighting, refrigeration, and heating: industrial processes; or vehicle transportation. Unlike conservation, which involves some reduction of service, energy efficiency provides energy reductions without sacrifice of service. May also refer to the use of technology to reduce the energy needed for a given purpose or service. Source: U.S. Energy Information Administration

Energy Efficiency Rating

A room air conditioner's efficiency is measured by the energy efficiency ratio (EER). The EER is the ratio of the cooling capacity (in British thermal units [Btu] per hour) to the power input (in watts). The higher the EER rating, the more efficient the air conditioner. Source: DOE

Energy Intensity

Energy intensity (abbreviated EI) measures how much energy benefits the economy. This value is calculated by taking the ratio of total primary energy use (TPES) (all of the fuels and flows that a country uses to get energy) to GDP (the total money made in a country). This quantity (measured MJ/$) is used to indicate how effectively a certain economy is using their fuels and flows. When a country reduces wasted energy it becomes more efficient, this lowers its EI (lower EI is better). Source: Energy Education, University of Calgary

Energy Returned on Energy Invested

Energy Return on Investment (EROI) is a ratio of the amount of energy obtained from an energy resource to the amount of energy (exergy) expended to produce that energy. The energy return on investment (EROI) is a key determinant of the price of energy because sources of energy that can be tapped relatively cheaply will allow the price to remain low. Source: Investopedia

Energy Savings Coverage Ratio

Difference between projected energy savings and the debt service, expressed as a ratio. Such ratios can express a magnitude of net economic benefits and also be a useful indicator for program management and evaluation.

Energy Services

The term ‘Energy services’ term makes reference to a series of services about to the development, evaluation and management of the energy supply in several forms. This definition includes the analysis of energy needs, the technical and economic feasibility of interventions linked to energy saving and efficiency; the definition. Source: BankPedia

Enhanced Oil Recovery

Enhanced oil recovery (EOR) is a process whereby pressurized CO2 is injected into existing oil and gas reservoirs to squeeze more hydrocarbons out. Carbon dioxide EOR is the method that is gaining the most popularity and these types of projects are eligible for a $35/ton tax credit under 45Q. EOR is an attractive form of EOR for many because it uses a lot of CO2 and leaves a lot of it permanently buried. EOR has been argued as a way to reduce the carbon intensity of oil and sequester substantial amounts of carbon. But there is also a compelling case against it, namely that there should be less oil and gas production, not more. Source: Department of Energy, Vox


Engineering, Procurement, Construction. EPC firms are typically contracted to perform detailed engineering, procure equipment, manage construction, and commission a project before handing the project back to the owner. Source: Wikipedia


Equity is typically referred to as shareholder equity (also known as shareholders' equity), or owners equity (for privately held companies), which represents the amount of money that would be returned to a company’s shareholders if all of the assets were liquidated and all of the company's debt was paid off. Source: Investopedia

Equity First

The project equity must put in all of their funding portion before any debt financing is used.


In an Energy Services Agreement, energy efficiency is treated as a service rather than a product. In this type of agreement, a project developer evaluates a building and executes energy efficiency upgrades. The customer pays for this energy service over time at an agreed-upon rate. One way to structure the contract is to have the customer pay per unit of energy saved, which means they only pay for the actual savings and do not bear the risk of an underperforming project.


In an Energy Services Agreement, energy efficiency is treated as a service rather than a product. In this type of agreement, a project developer evaluates a building and executes energy efficiency upgrades. The customer pays for this energy service over time at an agreed-upon rate. One way to structure the contract is to have the customer pay per unit of energy saved, which means they only pay for the actual savings and do not bear the risk of an underperforming project. Source: EDF Energy Exchange

Events of Default

Events that give parties to Project Contracts the right to terminate them. Source: Principles of Project Finance, E.R. Yescombe


Expropriation is the act of a government taking privately owned property against the wishes of the owners, ostensibly to be used for the benefit the overall public. In the United States, properties are most often expropriated in order to build highways, railroads, airports, or other infrastructure projects. Source: Investopedia


Face value

Face value(Par Value) is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the holder at maturity, which is customarily $1,000. The face value for bonds is often referred to as "par value" or simply "par." Source: Investopedia

Federal Energy Regulatory Commission

The Federal Energy Regulatory Commission, or FERC, is an independent agency that regulates the interstate transmission of natural gas, oil, and electricity. FERC also regulates natural gas and hydropower projects. Source: FERC

Federal Power Act

Enacted in 1920, and amended in1935, the Act consists of three parts. The first part incorporated the Federal Water Power Act administered by the former Federal Power Commission, whose activities were confined almost entirely to licensing non-Federal hydroelectric projects. Parts II and III were added with the passage of the Public Utility Act. These parts extended the Act's jurisdiction to include regulating the interstate transmission of electrical energy and rates for its sale as wholesale in interstate commerce. The Federal Energy Regulatory Commission is now charged with the administration of this law. Source: U.S. Energy Information Administration

Feed-in tariffs

A renewable energy policy that typically offers a guarantee of payments to project owners for the total amount of renewable electricity they produce; access to the grid; and stable, long-term contracts. Source: California Energy Commission

Fermi Level

Fermi level is the term used to describe the top of the collection of electron energy levels at absolute zero temperature. Source: Hyper Physics


Wind fetch is defined as the unobstructed distance that wind can travel over water in a constant direction. Fetch is an important characteristic of open water because longer fetch can result in larger wind-generated waves. The larger waves, in turn, can increase shoreline erosion and sediment resuspension. Source: USGS

Fiat money or currency

Fiat money is government-issued currency that is not backed by a physical commodity, such as gold or silver, but rather by the government that issued it. The value of fiat money is derived from the relationship between supply and demand and the stability of the issuing government, rather than the worth of a commodity backing it as is the case for commodity money. Most modern paper currencies are fiat currencies, including the U.S. dollar, the euro and other major global currencies. Source: Investopedia


A numeric credit score ranging from 300 to 850 (industry-specific scores range from 250 to 900). Lenders use the scores to gauge a potential borrower's creditworthiness, or the likelihood that they will pay their debt. Scores above 650 generally indicate very good credit history. FICO scores are based off of credit history, amounts owed, length of credit history and credit mix, and are developed by Fair Isaac Corporation. FICO scores are available in some non-U.S. markets as well as the United States.

Final completion

Final Completion means the date determined and certified by A/E and Owner on which the Work is fully and satisfactorily complete in accordance with the Contract. Source: Law Insider

Final Energy

Final or available energy is the energy delivered to consumers for end consumption (petrol at the pump, electricity in the household, etc.). Source: INSEE


Financial technology (Fintech) is used to describe new technology that seeks to improve and automate the delivery and use of financial services. ​​​When fintech emerged in the 21st Century, the term was initially applied to the technology employed at the back-end systems of established financial institutions. ​Since then, however, there has been a shift to more consumer-oriented services and therefore a more consumer-oriented definition. Fintech now includes different sectors and industries such as education, retail banking, fundraising and nonprofit, and investment management to name a few. Source: Investopedia

First Party Coverage

First party coverage refers to a compensation received under one’s own insurance policy as opposed to receiving payment from someone else's insurance policy. If an insured causes damage to his/her property, the loss covered under the terms of a policy of insurance is commonly known as a first party coverage. Source: USLegal

Fixed Price

A fixed-price contract is a type of contract where the payment amount does not depend on resources used or time expended. Source: Wikipedia

Floating rate

A floating-rate note (FRN) is a debt instrument with a variable interest rate. The interest rate for an FRN is tied to a benchmark rate. Benchmarks include the U.S. Treasury note rate, the Federal Reserve funds rate—known as the Fed funds rate—the London Interbank Offered Rate (LIBOR), or the prime rate. Source: Investopedia

Flow Battery

A flow battery, or redox flow battery (after reduction–oxidation), is a type of electrochemical cell where chemical energy is provided by two chemical components dissolved in liquids contained within the system and separated by a membrane. Ion exchange (accompanied by flow of electric current) occurs through the membrane while both liquids circulate in their own respective space. A flow battery may be used like a fuel cell (where the spent fuel is extracted and new fuel is added to the system) or like a rechargeable battery (where an electric power source drives regeneration of the fuel). Source: Wikipedia

Force Majeure

An event that affects the ability of one party to fulfill its contract, but that is not the fault of, and could not reasonably have been foreseen by, that party. Source: Principles of Project Finance, E.R. Yescombe

Forward Contract

A forward contract is a customized contract between two parties to buy or sell an asset at a specified price on a future date. A forward contract can be used for hedging or speculation, although its non-standardized nature makes it particularly apt for hedging. Source: Investopedia

Forward Market

Markets where RECs associated with power that has not yet been produced are bought and sold.

Forward Markets

A forward market is an over-the-counter marketplace that sets the price of an asset for future delivery. Forward markets are used for trading a range of instruments, but the term is primarily used with reference to the foreign exchange market. It can also apply to markets for securities and interest rates as well as commodities. In the world of energy, forward markets allow generators to protect themselves against short-term electricity price risks by selling a portion of their capacity years ahead physical delivery and up to the day before delivery. Source: Investopedia and Marten Ovaere

Fuel Cell

A fuel cell uses the chemical energy of hydrogen or another fuel to cleanly and efficiently produce electricity. If hydrogen is the fuel, electricity, water, and heat are the only products. Fuel cells are unique in terms of the variety of their potential applications; they can provide power for systems as large as a utility power station and as small as a laptop computer. Source: DOE

Fully Wrapped

The plant owner tasks the EPC contractor with handling every aspect of engineering, procurement, and construction. Source: SLS Law


The sun produces light and energy by a process called fusion. Fusion, the combining of two nuclei to form a new atom, occurs in a plasma (very hot gases) where electrons have been freed from atomic nuclei, forming a collection of ions and electrons that can be controlled by electric and magnetic fields. The energy, heat and light from the sun is created by the fusion process many times over. Scientist attempt to recreate the process on Earth to make electricity. Achieving this goal would have far-reaching and significant effects on human civilization and its impact on the planet. Source: United States Department of Energy

Future Value

Future value (FV) is the value of a current asset at a future specified time, based on the expected rate of growth. If, today’s $10,000 investment is guaranteed to grow to $30,000 in 3 years, then the FV of the $10,000 investment is $30,000.

Future Value Factor

The formula for the future value factor (FV Factor) is used to calculate the future value of an amount per dollar of its present value. Source: Finance Formulas

Future Value of Multiple Cash Flows

The FV of multiple cash flows is the sum of the FV of each cash flow. To sum the FV of each cash flow, each must be calculated to the same point in the future. Source: Lumen learning 


General Electric

General Electric (GE) is as an American engineering and technology company and one of the largest multinational conglomerates in the world. GE partnered with Hitachi to build BWRX-300 a small modular reactor (SMR) in the United States. BWRX-300 aims to greatly reduce overall project risks and total capital costs through underground containment and SMR design. Source: United States Department of Energy

General Partner

A general partner is one of two or more investors who jointly own a business and assume a day-to-day role in managing it. Source: Investopedia

Generally Accepted Accounting Principles

Generally accepted accounting principles (GAAP) refer to a common set of accounting principles, standards, and procedures issued by the Financial Accounting Standards Board (FASB). Source: Investopedia


Genesis Block is the name of the first block of Bitcoin ever mined. Bitcoin fans hold the Genesis Block, also known as Block 0, in a kind of cult-like reverence. Now, genesis can also refer to the first block in any blockchain.

Global Horizon Irradiance

Global Horizontal Irradiance (GHI) is the total amount of shortwave radiation received from above by a surface horizontal to the ground. This value is of particular interest to photovoltaic installations and includes both Direct Normal Irradiance (DNI) and Diffuse Horizontal Irradiance (DHI). Source: First Green Consulting

Green Bank

A finance authority that uses innovative financing tecniques to help achieve clean energy and efficiency policy objectives by crowding in private investment. Although there is diversity in the scope and structure of green banks, they are often capitalized by public funds and have a regional jurisdiction. Source: Green Bank Network

Green Bank

Green banks are generally defined as public or quasi-public financial institutions that use public funds to attract private investment to clean energy projects. Green bank activities can include offering financing guarantees, creating new financial products, and helping alleviate market barriers and inefficiencies. Green banks in Connecticut and New York have hired staff with extensive experience in both the private and public sectors. Each of these banks has the authority and capability to work closely with private sector entities to design effective clean energy financing solutions.

Green Bonds

Green bonds are issued to pay for climate/environmental projects. These are often issued by large institutions – such as World Bank, Bank of America, and Toyota – that invest in both environmental and non-environmental projects. However the proceeds from the green bonds are invested exclusively in green projects. Source: Climate Bonds Initiative

Green Bonds

Green bonds are issued to pay for climate/environmental projects. These are often issued by large institutions – such as World Bank, Bank of America, and Toyota – that invest in both environmental and non-environmental projects. However the proceeds from the green bonds are invested exclusively in green projects.

Grid Congestion

Grid congestion occurs when a grid overload prevents electricity from reaching the consumer. Source: Germany Federal Ministry for Economic Affairs and Energy

Grid Parity

Grid parity (or socket parity) occurs when an alternative energy source can generate electricity at a levelized cost of electricity (LCoE) that is less than or equal to the price of purchasing power at a retail price from the electricity grid. Simplified, it means the cost of renewable electricity equivalent to the retail price of utility supplied electricity. Source: Government of Massachusetts


HEAD (in Hydropower)

Head is the height difference between where the water enters into the hydro system and where it leaves it, measured in metres. Typically this could be the height of a weir at the turbine entrance or if the site is undeveloped it would be between where the hydro intake screen would be and where the water discharges from the turbine and returns to the watercourse. Source: Renewables First


Option to buy or sell at a specified price (calls and puts).

A hedge is an investment that is made with the intention of reducing the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting or opposite position in a related security. Source: Investopedia


When a large number of market participants exhibit the same behavior which exterts market power. For example, in real-time-pricing schemes when large segments of market consumers purchase power when energy prices are low.

Hub Height

The hub height is the distance from the turbine platform to the rotor of an installed wind turbine and indicates how high your turbine stands above the ground, not including the length of the turbine blades. Source: Vaisala Energy


(Heating, Ventilation, and Air Conditioning System) The mechanical systems that provide thermal comfort and air quality in an indoor space are often grouped together because they are generally interconnected. HVAC systems includes central air conditioners, heat pumps, furnaces, boilers, rooftop units, chillers, and packaged systems. Source: NC State University

Hydraulic Fracking

Fracking, or hydraulic fracturing, is a technique in which water, sand, and chemicals are injected underground in order to crack open rock formations and allow liberated gas to flow to the surface for capture. Source: Britannica Encyclopedia


Hydrographs are a representation of the physical geography of and the meteorological conditions in a watershed, and they include the combined effects of climate, hydrologic losses (e.g., evaporation, infiltration, and so on), surface runoff, subsurface stormwater flow, and groundwater flow. Source: Science Direct

Hydrological Cycle

(Water Cycle or Hydrologic cycle) The water cycle is circular cycle of evaporation, condensation, and precipitation.Liquid water evaporates into water vapor, condenses to form clouds, and precipitates back to earth in the form of rain and snow. Water in different phases moves through the atmosphere (transportation). Liquid water flows across land (runoff), into the ground (infiltration and percolation), and through the ground (groundwater). Source: National Oceanic and Atmospheric Administration


Hypothecation occurs when an asset is pledged as collateral to secure a loan, without giving up title, possession or ownership rights, such as income generated by the asset. Source: Investopedia



International Financial Reporting Standards (IFRS) set common rules so that financial statements can be consistent, transparent and comparable around the world. IFRS are issued by the International Accounting Standards Board (IASB). They specify how companies must maintain and report their accounts, defining types of transactions and other events with financial impact. Source: Investopedia

Import Duties

a tax collected on imports and some exports by a country's customs authorities. Source: Investopedia

Incident Radiation

The incident radiation is the electromagnetic radiation that is being used to eject the electrons in the metal. Another way to remember this is that the incident radiation is the "incoming" light that will strike the specific surface you are examining. Source: UCLA Lavelle Chemistry Community

Independent Engineer

An Independent Engineer (Lender's Engineer) is a term often given to the engineering representative of the lender, or financier, of a large capital project. Source: Wikipedia

Independent Power producer

An independent power producer (IPP) or non-utility generator (NUG) is an entity[1] that is not a public utility but owns facilities to generate electric power for sale to utilities and end users. Source: Wikipedia

Independent System Operator

An independent system (ISO) operator is similarly (to RTOs) an organization formed at the recommendation of FERC. In the areas where an ISO is established, it coordinates, controls, and monitors the operation of the electrical power system, usually within a single US state, but sometimes encompassing multiple states. Source: Wikipedia

Information Technology

Information technology (IT) is the use of technologies (e.g., computers, networks, telephones, televisions, software, semiconductors, etc.) to store, retrieve, transmit, and manipulate data or information. Most often it is used to refer to the technologies of the current electronic period.


Insolvency is a term for when an individual or organization can no longer meet its financial obligations to its lenders as debts become due. Source: Investopedia

Integrated Resource Plan

IRPs are utility plans for meeting forecasted annual peak and energy demand, along with some established reserve margin, through a portfolio of supply-side and demand-side resources over a specified future period. Source: EPA

Integrated Utility

A utility business model in which the utility owns all parts of the electricity value stream including transmission, generation and distribution. Source: Richard Kauffman, FDCE presentation

Intercreditor Agreement

An Intercreditor Agreement, commonly referred to as an intercreditor deed, is a document signed between two or more creditors, stipulating in advance how their competing interests are resolved and how to work in tandem in service to their mutual borrower. Source: corporatefinanceinstitute

Interest Only Loan

An interest-only loan is a loan in which the borrower pays only the interest for some or all of the term, with the principal balance unchanged during the interest-only period. At the end of the interest-only term the borrower must renegotiate another interest-only mortgage, pay the principal, or, if previously agreed, convert the loan to a principal-and-interest payment (amortized) loan at the borrower's option. Source: Wikipedia

Intergovernmental Panel on Climate Change

(IPCC) A scientific intergovernmental body set up by the World Meteorological Organization (WMO) and by the United Nations Environment Programme (UNEP) to provide the decision-makers and others interested in climate change with an objective source of information about climate change. Source: California Energy Commission

Internal Combustion Engine

Internal-combustion engine, any of a group of devices in which the reactants of combustion (oxidizer and fuel) and the products of combustion serve as the working fluids of the engine. Such an engine gains its energy from heat released during the combustion of the nonreacted working fluids, the oxidizer-fuel mixture. This process occurs within the engine and is part of the thermodynamic cycle of the device. Source: Britannica Encyclopedia

Internal Rate of Return

The internal rate of return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments. The internal rate of return is a discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero. Source: Investopedia

International Financial Reporting Standards

International Financial Reporting Standards (IFRS) set common rules so that financial statements can be consistent, transparent and comparable around the world. IFRS are issued by the International Accounting Standards Board (IASB). They specify how companies must maintain and report their accounts, defining types of transactions and other events with financial impact. Source: Investopedia

International Transfer of Mitigation Outcomes

Internationally transferred mitigation outcomes (ITMO) are a unit of measure that provide a means to balance, without double counting, any carbon based trade to achieve NDCs and the mitigation goals of the Paris Agreement. Source: IETA

Internet of Things

The Internet of Things (IoT) refers to a vast number of “things” that are connected to the internet so they can share data with other things – IoT applications, connected devices, industrial machines and more. Internet-connected devices use built-in sensors to collect data and, in some cases, act on it. IoT connected devices and machines can improve how we work and live. Real-world Internet of Things examples range from a smart home that automatically adjusts heating and lighting to a smart factory that monitors industrial machines to look for problems, then automatically adjusts to avoid failures. Source: SAS Institute


A power inverter, or inverter, is a power electronic device or circuitry that changes direct current (DC) to alternating current (AC). The input voltage, output voltage and frequency, and overall power handling depend on the design of the specific device or circuitry. The inverter does not produce any power; the power is provided by the DC source. Source: Wikipedia

Investment Tax Credit

The Investment Tax Credit (ITC) in section 45 of the Internal Revenue Service Code is available for energy efficiency/renewable energy improvements. It is equal to 30% of the value of the capitalized basis costs to develop, design, build, and install systems that: (1) use solar energy to generate electricity, or to heat, cool, (or provide hot water for use in) a structure (building), although heating swimming pool water does not qualify; (2) consist of fuel cell property with nameplate capacity of at least 0.5 kW and an electricity-only efficiency of at least 30% (up to $1,500 per 0.05 kW of capacity); (3) consist of small wind property with a nameplate capacity of 100 kW or less; (4).use fiber optic distributed sunlight to illuminate the inside of a structure.
Also available is an ITC equal to 10% of the value of the capitalized basis costs to develop, design, build, and install systems for the following types of energy property: (1) geothermal electric systems, (2) micro-turbines (stationary plant of less than 2 MW with an electricity-only efficiency of 26%), (3) combined heat and power systems, and (4) geothermal heat pumps. Source: Department of Energy

Investor-owned Utilities

A privately-owned electric utility whose stock is publicly traded. It is rate regulated and authorized to achieve an allowed rate of return. Source: U.S. Energy Information Administration


Islanding is the condition in which a distributed generator (DG) continues to power a location even though electrical grid power is no longer present. Islanding can be dangerous to utility workers, who may not realize that a circuit is still powered, and it may prevent automatic re-connection of devices. Additionally, without strict frequency control the balance between load and generation in the islanded circuit is going to be violated, leading to abnormal frequencies and voltages. For those reasons, distributed generators must detect islanding and immediately disconnect from the circuit; this is referred to as anti-islanding. Source: Wikipedia


An issue is the process of offering securities in order to raise funds from investors. Companies may issue bonds or stocks to investors as a method of financing the business. The term "issue" also refers to a series of stocks or bonds that have been offered to the public and typically relates to the set of instruments that were released under one offering. Source: Investopedia


Kaya Formula

The Kaya identity is a useful equation for quantifying the total emissions of the greenhouse gas carbon dioxide (CO2). Source: The Institute and Faculty of Actuaries (IFoA)

Keeling Curve

The Keeling Curve is a graph that represents the concentration of carbon dioxide (CO2) in Earth’s atmosphere since 1958. The Keeling Curve is named after its creator, Dr. Charles David Keeling. Source: National Geographic

Kilopower Project, NASA

The Kilopower project is a near-term technology effort to develop preliminary concepts and technologies that could be used for an affordable fission nuclear power system to enable long-duration stays on planetary surfaces. Source: NASA

Kyoto Protocol

The Kyoto Protocol is an international agreement that aimed to reduce carbon dioxide (CO2) emissions and the presence of greenhouse gases (GHG) in the atmosphere. The essential tenet of the Kyoto Protocol was that industrialized nations needed to lessen the amount of their CO2 emissions. The Protocol was adopted in Kyoto, Japan in 1997, when greenhouse gases were rapidly threatening our climate, life on the earth, and the planet, itself. Source: Investopedia



A reduction in emissions of greenhouse gases within the state that is offset by an increase in emissions of greenhouse gases outside the state. Source: California Energy Comission

Ledger, Digital

A digital ledger is a database. Most companies currently use a centralised database that lives in a fixed location, such as a clearinghouse. However, a distributed ledger eliminates the need for a central authority or intermediary to process, validate or authenticate transactions. Typically, records are only ever stored in a decentralized ledger after consensus has been reached by the parties involved. All files in the distributed ledger are then timestamped and given a unique signature. All participants on the distributed ledger can view all of the records in question. The technology provides a verifiable and auditable history of all information stored on that particular dataset. Blockchain is one type of distributed ledger with a unique process or architecture. Source: TradeIX


Banks, bondholders or other providers of senior debt to the Project Company. Source: Principles of Project Finance, E.R. Yescombe


The obligor under a lease (i.e. the Project Company). Source: Principles of Project Finance, E.R. Yescombe


The provider of finance under a lease (equivalent
to a lender). Source: Principles of Project Finance, E.R. Yescombe

Letter of Credit

A letter of credit (credit letter) is a letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. Source: Investopedia

Levelized Cost of Energy

The levelized Cost of Energy (LCOE) measures lifetime costs divided by energy production, calculates present value of the total cost of building and operating a power plant over an assumed lifetime, and allows for the comparison of different technologies (e.g., wind, solar, natural gas) of unequal life spans, project size, different capital cost, risk, return, and capacities. Source: U.S Department of Energy

Leverage Ratio

In the context of a Green Bank, this refers to the private capital deployed as a result of the utilization of public capital. Note that there is some fluidity in the definition, so that it may refer to the ratio of public to private capital, of private to public, or of public to total investment. In traditional financial settings, this would refer to the ratio of debt to equity, but there again, different leverage ratios are used in the industry.


A liability is something a person or company owes, usually a sum of money. Liabilities are settled over time through the transfer of economic benefits including money, goods, or services. Recorded on the right side of the balance sheet, liabilities include loans, accounts payable, mortgages, deferred revenues, earned premiums, unearned premiums, and accrued expenses. Source: Investopedia


LIDAR, which stands for Light Detection and Ranging, is a remote sensing method that uses light in the form of a pulsed laser to measure ranges (variable distances) to the Earth. These light pulses—combined with other data recorded by the airborne system— generate precise, three-dimensional information about the shape of the Earth and its surface characteristics. Source: National Oceanic and Atmospheric Administration


A lien is a legal right granted by the owner of property, by a law or otherwise acquired by a creditor. A lien serves to guarantee an underlying obligation, such as the repayment of a loan. Source: Investopedia

Life-cycle Assessment

Life-cycle assessment (LCA) or life cycle assessment is a methodology for assessing environmental impacts associated with all the stages of the life-cycle of a commercial product, process, or service. Source: Wikipedia


When the wind blows, a pocket of low-pressure air forms on the downwind side of the blade. The low-pressure air pocket then pulls the blade toward it, causing the rotor to turn. This is called lift. The force of the lift is actually much stronger than the wind's force against the front side of the blade, which is called drag. The combination of lift and drag causes the rotor to spin like a propeller, and the turning shaft spins a generator to make electricity. Source: National Renewable Energy Laboratory

Light Water Reactors

The most common type of thermal-neutron reactor. Light water reactors use water as both the coolant and neutron moderator. This technology includes either pressurized water reactors or boiling water reactors which harness the fission process to heat the normal water into steam. The three main byproducts are depleted uranium, nuclear fission products and the exhaust from the turbines. The depleted uranium is usually stored at an enrichment site, and the nuclear fission products are typically stored at the power plant. Source: Stanford

Limited Liability Company

A limited liability company (LLC) is a corporate structure in the United States whereby the owners are not personally liable for the company's debts or liabilities. Limited liability companies are hybrid entities that combine the characteristics of a corporation with those of a partnership or sole proprietorship. Source: Investopedia

Limited Partner

A limited partner (silent partner) is a part-owner of a company whose liability for the firm's debts cannot exceed the amount that individual invested in the company. Source: Investopedia

Limited Partnership

A limited partnership (LP) is a partnership made up of two or more partners. The general partner oversees and runs the business while limited partners do not partake in managing the business. However, the general partner has unlimited liability for the debt, and any limited partners have limited liability up to the amount of their investment. Source: Investopedia

Liquidated Damages

Liquidated damages are presented in certain legal contracts as an estimate of otherwise intangible or hard-to-define losses to one of the parties. It is a provision that allows for the payment of a specified sum should one of the parties be in breach of contract. Source: Investopedia

Load (electric)

An end-use device or customer that receives power from the electric system. Source: Glossary of Terms Used in NERC Reliability Standards.

Load Curve

The relationship of power supplied to the time of occurrence. Illustrates the varying magnitude of the load during the period covered. Source: U.S. Energy Information Administration

Load Duration Curve

Unlike a chronological electric load curve, which is simply an hourly record of electric demand, the LDCs are created by rearranging the hourly chronological electric load data from the highest to lowest (MW) value. Source: EPA

Load Serving Entity

Load-Serving Entity (LSE) means every electrical corporation, electric service provider, or community choice aggregator serving end-use customers. Source: LawInsider

Local Geothermal Gradient

The temperature gradient at any location in Earth, known as the geothermal gradient, is the increase in temperature per unit distance of depth; it is given by the tangent to the local geotherm. The magnitude of the geothermal gradient thus varies with the shape of the geotherm. In regions with high surface heat flow, such as areas of active volcanism or mantle upwelling beneath thinned continental crust, geothermal gradients of 40 to 100 °C (104 to 212 °F) per kilometre (0.6 mile) prevail, giving rise to high temperatures at relatively shallow levels of the crust. Within the stable interiors of old continents, geothermal gradients of 25 to 35 °C (77 to 95 °F) per kilometre are more typical, and in zones of active subduction, where the relatively cold oceanic crust is rapidly transported to great depths, geothermal gradients range from 10 to 20 °C (53.6 to 68 °F) per kilometre. These large variations in geotherms and geothermal gradients give rise to different metamorphic regimes, or combinations of pressure-temperature conditions, associated with the different tectonic provinces. Source: Britannica Encyclopedia

Locational Marginal Price

Locational marginal pricing (LMP) is a way for wholesale electric energy prices to reflect the value of electric energy at different locations, accounting for the patterns of load, generation, and the physical limits of the transmission system. Source: ISO-NE

London Interbank Offered Rate

LIBOR is an average interest rate at which major global banks lend to one another in the international interbank market for short-term loans. This rate serves as the globally-accepted benchmark that indicates borrowing costs between banks. LIBOR is used as the basis for consumer loans in countries around the world, so it impacts consumers just as much as it does financial institutions. LIBOR helps determine the ease of borrowing between banks and consumers. Source: Investopedia

Long-term Service Agreement

(LTSA)Require that the original equipment manufacturer, or OEM, provide maintenance services for their equipment on a more or less fixed-price basis. Source: Upcounsel

Loss Carryforward

Loss carryforward refers to an accounting technique that applies the current year's net operating loss (NOL) to future years' net income to reduce tax liability. Source: Investopedia

Loss Multiple

The loss multiple is a multiplier, or factor, determined by ratings agencies which will be applied to assets in any particular tranche to calculate the total enhancement required for that particular rating.The loss multiple is the required credit support, or buffer, for each rating/tranche. Source: Richard Kauffman, FDCE presentation

Loss Reserve

In accounting, loan loss reserves are accounting entries that banks make to cover estimated losses on loans due to defaults. In the context of green banks however, loan loss reserve funds are funds specifically set aside to pay future potential losses on a portfolio. They are a tool commonly used by green banks and development banks, and can cover either first loss positions or second loss positions. See Second Loss for additional details.

Low and Moderate Income

An individual is considered to be LMI based on their annualized family income. There are many ways to define LMI individuals, but under the Community Reinvestment Act, to be classified as LMI, an individual or family’s household income must be 80% of the median income for the county or area where they reside. Note that outside of the CRA, different financial institutions will define this criterion differently. For instance, they may choose to use a 50% threshold instead. Source: CRA Knowledge Center

Low Emissions Renewable Energy Credit

(LREC) A form of REC available to commercial energy users in the northeast specific to projects that are behind the meter, less than 2 MW and emit limited amounts of GHG's and other gasses. Source: Eversource


Machine learning

Machine learning is the concept that a computer program can learn and adapt to new data without human interference. Machine learning is a field of artificial intelligence (AI). The various data applications of machine learning are formed through a complex algorithm or source code built into the machine or computer. This programming code creates a model that identifies the data and builds predictions around the data it identifies. The model uses parameters built in the algorithm to form patterns for its decision-making process. When new or additional data becomes available, the algorithm automatically adjusts the parameters to check for a pattern change, if any. Source: Investopedia


The Modified Accelerated Cost Recovery System (MACRS) is the primary tax depreciation system used by the IRS. Depreciation is an income tax deduction that taxpayers can use to recover the cost of certain types of property over time. MACRS specifies different cost recovery periods for different types of properties, usually based on the expected useful lives of these properties. However, MACRS allows for a relatively short five-year cost recovery period for solar photovoltaic assets despite the fact that solar systems often have a useful life of 25 years or more. This accelerated recovery period increases the attractiveness of solar investment.

MACRS Depreciation

MACRS depreciation allows the capitalized cost of an asset to be recovered over a specified period via annual deductions. The MACRS system puts fixed assets into classes that have set depreciation periods. Source: Investopedia

Managing Member

Managing Members are those specifically able to bind the Limited Liability Company contractually. In the legal world, they have “actual authority” to contract on the LLC’s behalf. Source: LLC Made Easy

Marginal Plant

The most expensive technology providing services to meet energy demand at a specific time. Source: Marten Ovaere

Master Limited Partnerships

A publically traded limited liability partnership formed to hold long-lived assets with stable income streams. They combine the tax benefits of a private partnership with the liquidity of a publicly-traded company. MLPs are situated to take advantage of cash flow, as they are required to distribute all available cash to investors. They can also help reduce the cost of capital in capital-intensive businesses, such as the energy sector. At least 90% of an MLP's income must come from natural resources real estate. Note: renewable energy assets are precluded from MLP's. Source: Richard Kauffman, FDCE presentation, Investopedia

Master Meter

In the context of multi-tenant commercial or multi-family residential homes, master metering is when a single "master meter" controls the utilities for all units in the building or complex. When a master meter is present, utility companies send bills directly to the property owner, rather than to the tenants. To recoup costs, property owners may include utility costs as a flat fee as part of the rental charge or may divide utility costs amongst all tenants. Source: ABT Water Management


Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest rate and commodity swaps, options, loans and fixed income instruments such as bonds. They are sometimes altered by bonus rates as part of promotions. Source: Investopedia

Maximum Power point

The Maximum Power Point (MPP) is the point on a power (I-V) curve that has the highest value of the product of its corresponding voltage and current, or the highest power output. Source: Teach Engineering

Mechanical Completion

Occurs when all mechanical and physical aspects of a project, except for punch list items, have been constructed and installed in accordance with the specifications set out in the construction contract. Source: Thomson Reuters

Merchant Facilities

High-risk, high-profit facilities that operate, at least partially, at the whims of the market, as opposed to those facilities that are constructed with close cooperation of municipalities and have significant amounts of waste supply guaranteed. Source: U.S. Energy Information Administration

Merit Order Effect

The merit order effect describes the lowering of power prices at the electricity exchange due to an increased supply of renewable energies. Source: Clean Energy Wire

Met Masts

A measurement tower or met mast is a free standing tower or a removed mast, which carries measuring instruments with meteorological instruments such as thermometers and instruments to measure windspeed. Source: Wikipedia


A combination of localized electricity generation sources, energy storage devices, and multiple loads that acts as a small electric grid with respect to the main electric grid. The microgrid can operate interconnected or isolated from the main electric grid. Source: California Energy Comission

Mid-year Convention

The mid-year convention states that a fixed asset purchased at any time during a year is depreciated as of the mid-point of that year. For example, if a $100,000 asset is purchased on February 15 and it has a five-year useful life, $10,000 of depreciation will be recognized in the first year, under the assumption that it was actually acquired on July 1. $20,000 of depreciation will be recognized in each of the next four years, and a half-year of depreciation will be charged in the final year. Source: Accounting Tools


Miners are exceptionally high-powered computers or computer systems that solve extremely complex computational math problems.The key role miners play in blockchain networks is to ensure the network is trustworthy and secure by verifying transaction information. Source: Invesopedia

Modified Accelerated Cost Recovery System

The modified accelerated cost recovery system (MACRS) is a depreciation system used for tax purposes in the U.S. MACRS depreciation allows the capitalized cost of an asset to be recovered over a specified period via annual deductions. Source: Investopedia

Monitoring, Reporting, and Verification

"Monitoring, Reporting and Verification (MRV) is a term used to describe all measures which countries take to collect data on emissions, mitigation actions and support." Source: MRV Africa

Montreal Protocol

The Montreal Protocol on Substances that Deplete the Ozone Layer (1987). An international agreement, signed by most of the industrialized nations, to substantially reduce the use of chlorofluorocarbons (CFCs). Signed in January 1989, the original document called for a 50-percent reduction in CFC use by 1992 relative to 1986 levels. The subsequent London Agreement called for a complete elimination of CFC use by 2000. The Copenhagen Agreement, which called for a complete phase out by January 1, 1996, was implemented by the U.S. Environmental Protection Agency. Source: U.S. Energy Information Administration

Moral Hazard Argument

A prevailing theory in economics regarding risk and decision making. The main argument is that a party protected in some way from risk would act differently than if they didn't have that protection. Insurance represents a good example of how consequence mitigation can influence upstream behavior. Source: Investopedia


A mortgage is a debt instrument, secured by the collateral of specified real estate property, that the borrower is obliged to pay back with a predetermined set of payments. Source: Investopedia


Municipal solid waste (MSW), often called garbage, is used to produce energy at waste-to-energy plants and at landfills in the United States. Source: EIA


Municipal bonds (or “munis” for short) are debt securities issued by states, cities, counties and other governmental entities to fund day-to-day obligations and to finance capital projects. Source: U.S. Securities and Exchange Comission


Nameplate Capacity

Nameplate capacity. also known as rated energy capacity or rated power capacity, refers to the maximum rated output of a generator, prime mover, or other electric power production equipment under specific conditions designated by the manufacturer. Nameplate capacity is commonly expressed in megawatts (MW) and is usually indicated on a nameplate physically attached to the generator. Source: EIA

Nanotubes and Nanotechnology

Nanotubes are tubes made of carbon with diameters that are usually measured at the nanometer level. Structural reinforcement is the most popular application of nanotechnology but, there are various industrial, manufacturing and electronic uses as well. Source: Nanowerk

National Aeronautics and Space Administration

The United States agency that is tasked with space and planetary science and exploration. NASA is the agency behind the Kilopower project. Source: NASA

National Environmental Policy Act

NEPA, which was signed into law in 1970, requires U.S. federal agencies to assess the environmental and associated socioeconomic effects of proposed projects or actions prior to making decisions. NEPA covers a wide range of actions including but not limited to making decisions on permit applications, adopting federal land management actions, and constructing highways and other publicly-owned facilities. NEPA review processes include opportunities for public comment. Source: U.S. Environmental Protection Agency

Natural Monopoly

A situation where one firm can produce a given level of output at a lower total cost than can any combination of multiple firms. Natural monopolies occur in industries which exhibit decreasing average long-run costs due to size (economies of scale). According to economic theory, a public monopoly governed by regulation is justified when an industry exhibits natural monopoly characteristics. Source: California Energy Commission


A negawatt is a term that represents a watt of energy conserved or not used through energy conservation or the use of energy-efficient products.

Net Cash Inflow

A situation in which more money is coming into an organization than is going out of it. This results in a profit. Source: Financial Dictionary

Net Metering

Is a metering and billing arrangement designed to compensate distributed energy generation (DG) system owners for any generation that is exported to the utility grid. 
NEM allows utility customers with on-site DG to offset the electricity they draw from the grid throughout the billing cycle (e.g., one month). The utility customer pays for the net energy consumed from the utility grid. Source: NREL

Net Operating Income

A measurement of profitability of an income-producing property. NOI is calculated as the revenue from the property minus the necessary expenses incurred for operation. NOI is a before-tax figure, appearing on a property’s income and cash flow statement, that excludes principal and interest payments on loans, capital expenditures, depreciation, and amortization. When this metric is used in other industries, it is referred to as “EBIT”, which stands for “earnings before interest and taxes”. Does any of this sound familiar to the REPF course? Source: Investopedia

Net Operating Losses

For income tax purposes, a net operating loss (NOL) is the result when a company's allowable deductions exceed its taxable income within a tax period. The NOL can generally be used to offset the company's tax payments in other tax periods through an Internal Revenue Service (IRS) tax provision called a loss carryforward. Source: Investopedia

Net Present value

Net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. NPV is used in capital budgeting and investment planning to analyze the profitability of a projected investment or project. Source: Investopedia

Net Present Value of Future Cash Flows

Net present value (NPV) is a method used to determine the current value of all future cash flows generated by a project, including the initial capital investment. It is widely used in capital budgeting to establish which projects are likely to turn the greatest profit. Source: Investopedia

Net vs Gross

Gross income is the pre-tax net sales minus cost of sales. Also called Gross Profit. Net income is what remains after subtracting all the costs (namely, business, depreciation, interest, and taxes) from a company’s revenues. It is sometimes called the bottom line. Also called earnings or net profit. Source: Investorwords


In blockchain, a network node is a point (real or virtual) where a message or information can be created, received, or transmitted. Any computer or device connected to a blockchain interface may be considered a node as they are able to transmit information about transactions and blocks within the distributed network of computers by using peer-to-peer protocol. Each computer node is defined according to its particular functions, so there are different types of nodes. Miners are one type of node, for example. Source: Binance Vision

Non-coincident Peak

The sum of two or more peak loads on individual systems that do not occur in the same time interval. Meaningful only when considering loads within a limited period of time, such as a day, week, month, a heating or cooling season, and usually for not more than 1 year. Source: U.S. Energy Information Administration


A non-dispatchable source of electricity generateelectrical energy but cannot be turned on or off in order to meet societies fluctuating electricity needs. It is the opposite of dispatchable sources of electricity which are very flexible, being able to change their output fairly quickly in order to meet electricity demands. Non-dispatchable electricity sources are often highly intermittent, which means that they are not continuously available due to factors that cannot be controlled (ex. the weather). There are many different types of non-dispatchable sources such as tidal power and wave power, but two main types that contribute noticeably to the electrical grid: Solar power and wind power. Source: Energy Education, University of Calgary

Non-Integrated Utility

A utility business mode in which the utility owns some but not all of the parts of the electricity value stream. Although the degree of deregulation varies, generation is commonly opened to competition at the wholesale and retail levels. Source: Richard Kauffman, FDCE presentation


Finance relying only on project cash flow, with no guarantee from the Sponsors. Source: Principles of Project Finance, E.R. Yescombe

Non-wires Alternatives

(NWA)“An electricity grid investment or project that uses non-traditional T&D solutions, such as distributed generation, energy storage, energy efficiency demand response, and grid software and controls, to defer or replace the need for specific equipment upgrades, such as T&D lines or transformers, by reducing load at a substation or circuit level.” Source: Navigant Research

Normal Distribution

Normal distribution, also known as the Gaussian distribution, is a probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean. In graph form, normal distribution will appear as a bell curve. Source: Investopedia

Not in my Backyard

Community opposition to projects that involve localized costs and diffuse benefits, especially when experts judge the risk to be minimal or the facility essential, is typically characterized as the NIMBY syndrome. Source: The Western Political Quarterly

Notice to Proceed

Notice to Proceed (NTP) means a notice from Owner to Contractor that defines the date on which the Contract Time begins to run. Source: Law Insider


Novation is the act of substituting a valid existing contract with a replacement contract, where all concerned parties mutually agree to make the switch. In most novation scenarios, one of the two initial contracting parties is replaced outright by an entirely new party, where the original party willingly agrees to forgo any rights originally afforded to him. Source: Investopedia

Nuclear Regulatory Commission

The Nuclear Regulatory Commission (NRC) was created as an independent agency by the United States Congress in 1974 to ensure the safe use of radioactive materials for beneficial civilian purposes while protecting people and the environment. The NRC regulates commercial nuclear power plants and other uses of nuclear materials, such as in nuclear medicine, through licensing, inspection and enforcement of its requirements. Source: United States Nuclear Regulatory Commission


Ocean Thermal Energy Conversion

Ocean thermal energy conversion (OTEC) is a process or technology for producing energy by harnessing the temperature differences (thermal gradients) between ocean surface waters and deep ocean waters.

Energy from the sun heats the surface water of the ocean. In tropical regions, surface water can be much warmer than deep water. This temperature difference can be used to produce electricity and to desalinate ocean water. Ocean Thermal Energy Conversion (OTEC) systems use a temperature difference (of at least 77° Fahrenheit) to power a turbine to produce electricity. Warm surface water is pumped through an evaporator containing a working fluid. The vaporized fluid drives a turbine/generator. The vaporized fluid is turned back to a liquid in a condenser cooled with cold ocean water pumped from deeper in the ocean. OTEC systems using seawater as the working fluid can use the condensed water to produce desalinated water. Source: EIA

Off-Take Contract

A Project Agreement under which the Project Company produces a product and sells it to the Offtaker. Source: Principles of Project Finance, E.R. Yescombe


The purchaser of the Project Company’s product, e.g. under a PPA. Source: Principles of Project Finance, E.R. Yescombe

On-Bill Finance

On-Bill Finance allows utility customers to borrow money from their utility at little to no interest to pay for certain energy efficiency measures. The loan is repaid over time through the utility bill.

On-bill Financing

On-bill financing allows the utility to incur the cost of the clean energy upgrade, which is then repaid on the utility bill. Source: Department of Energy

On-bill Repayment

On-bill repayment programs help utility customers pay for energy efficiency and renewable energy generation by allowing them to repay the private financing institution through their utility bills. This provides lenders greater assurance, thereby enhancing the credit of participating customers. This results in more customers qualifying for financing and better overall financing terms for those customers. "Open-source OBR" programs allow multiple lenders and other investors to compete for customers, and allow a wide variety of financing products such as loans, leases, PPAs and ESAs. Source: EDF Energy Exchange

On-Bill Repayment

On-Bill Repayment programs help utility customers secure private financing for energy efficiency and renewable generation by allowing them to repay the private financing institution through their utility bills. Placing the repayment on the utility bills provides lenders and other investors with greater assurance that they will be repaid, therefore enhancing the credit of participating customers. This results in a greater number of customers being eligible for financing as well as better overall financing terms for qualifying customers.

Open Source OBR

These are on-bill repayment programs that allow multiple lenders and other investors to compete for customers. They allow a wide variety of financing products, such as loans, leases, power-purchase agreements, and Energy Services Agreements, to be eligible.


Blockchain oracles are third-party services that serve as bridges between blockchains and the outside world by providing the internal system with external information. Source: Binance Vision

Orographic Precipitation

Orographic precipitation, rain, snow, or other precipitation produced when moist air is lifted as it moves over a mountain range. As the air rises and cools, orographic clouds form and serve as the source of the precipitation, most of which falls upwind of the mountain ridge. Source: Britannica Encyclopedia



Property-assessed clean energy (PACE) allows building/home owners to repay loans for energy efficiency and/or renewable generation through their property tax bill. Placing the loan repayment on the property tax bill reduces the risk of default because property taxes are almost always successfully collected. This reduced risk of default provides a credit enhancement for participating building/home owners and therefore allows more building/home owners to get access to financing at attractive rates.

PACE 2.0

Property-assessed clean energy (PACE) 2.0 is a new version of PACE that is emerging in Connecticut, California and some other states. Like the original PACE, PACE 2.0 allows for clean energy investments to be repaid through property-tax bills. But PACE 2.0 goes a step further by allowing payments for solar leases and for solar power-purchase agreements to also be repaid through property-tax bills.


Paid-in capital is the amount of capital "paid in" by investors during common or preferred stock issuances, including the par value of the shares themselves plus amounts in excess of par value. Paid-in capital represents the funds raised by the business through selling its equity and not from ongoing business operations. Source: Investopedia

Particulate Matter

PM stands for particulate matter (also called particle pollution): the term for a mixture of solid particles and liquid droplets found in the air. Some particles, such as dust, dirt, soot, or smoke, are large or dark enough to be seen with the naked eye. Others are so small they can only be detected using an electron microscope. Source: EPA

Pass-Through Entity

A flow-through entity (Pass-Through-Entity) is a legal business entity that passes income on to the owners and/or investors of the business. Flow-through entities are a common device used to limit taxation by avoiding double taxation. Only the investors or owners are taxed on revenues, not the entity itself. Source: Investopedia

Passive Safety

A term for safety mechanisms that do not require user input in order to operate. For example, the commercial light water reactors operate at an extreme minimum in required enrichment levels, meaning that if the water moderator is removed from the system, the fission reaction will stop. Source: Stanford

Path Dependency

Path dependency explains the continued use of a product or practice based on historical preference or use. A company may persist in the use of a product or practice even if newer, more efficient alternatives are available. Path dependency occurs because it is often easier or more cost-effective to continue along an already set path than to create an entirely new one. Source: Investopedia

Payback Period

The payback period refers to the amount of time it takes to recover the cost of an investment. Simply put, the payback period is the length of time an investment reaches a break-even point. Source: Investopedia

Payback Rule

The payback period disregards the time value of money. It is determined by counting the number of years it takes to recover the funds invested. For example, if it takes five years to recover the cost of an investment, the payback period is five years. Some analysts favor the payback method for its simplicity. Source: Investopedia

Peak Load

The maximum load during a specified period of time. Source: U.S. Energy Information Administration

Peak Load Shaving

Peak shaving provides price incentives to lower and smooth peak loads, reducing or eliminating the short-term demand spikes responsible for high demand charges. Source: Ideal Energy Solar

Peaker Plant

Peaking power plants, also known as peaker plants, are power plants that generally run only when there is a high demand, known as peak demand, for electricity. Peak load power plants are dispatched in combination with base load power plants, which supply a dependable and consistent amount of electricity, to meet the demand. Source: Wikipedia

Peaking Power

Peaking power refers to electricity use at its highest points during a day. Day to day trends of power usage need to be met by power plants, however it is not optimal for power plants to produce the maximum needed power at all times. Therefore there are baseload power plants which provide the minimum needed electricity, and peaking power plants which meet the fluctuating needs. Common peaking periods might include hot summer days when air conditioners are used, or cold winter days when home heating is a necessity. Most often, peaking power occurs in the afternoon when businesses are at their busiest, and evenings when home appliances are in use. Source: Energy Education, University of Calgary


A peer-to-peer platform (p2p) is a service whereby two individuals ("peers") interact directly with each other, without intermediation by a third party. Source: Investopedia


To complete all steps necessary to establish a security interest in property that will take priority over later lenders. Source: Financial Dictionary

Performance Based Regulation

Generally speaking, performance based regulation (PBR) is a regulatory approach that focuses on desired, measurable outcomes, rather than prescriptive processes, techniques, or procedures. In the universe of utility regulation, performance-based regulatory action ties growth in utility revenues or rates to a metric other than the utility's costs. As such, if or when the utility's operating costs increases, the utility is unable to simply raise rates or increase sales. PBR provides the utility with opportunities to earn greater profits by constraining its costs rather than increasing sales. Source: Regulatory Assistance Project


These are defined as annuities in which the cash flows continue forever. The perpetuity present value formula is very straightforward: PV = C/r.

Placed In Service Date

Placed-in-service is the point in time when property or long-term assets that can be depreciated or granted a tax credit are first placed in use for the purposes of accounting. Source: Investopedia

Plant, Property, & Equipment

Property, plant, and equipment (PP&E) are physical or tangible assets that are long-term assets that typically have a life of more than one year. Source: Investopedia


A pledged asset is a valuable possession that is transferred to a lender to secure a debt or loan. A pledged asset is collateral held by a lender in return for lending funds. Source: Investopedia

Power Curve

The power curve of a wind turbine is a graph that indicates how large the electrical power output will be for the turbine at different wind speeds. Source: Danish Wind Industry Association

Power Purchase Agreement

A type of Off-take Contract. Source: Principles of Project Finance, E.R. Yescombe

Preferred Stock

The term "stock" refers to ownership or equity in a firm. There are two types of equity - common stock and preferred stock. Preferred stockholders have a higher claim to dividends or asset distribution than common stockholders. The details of each preferred stock depend on the issue. Source: Investopedia

Present Value Factor

The present value (PV) factor is used to derive the present value of a receipt of cash on a future date. The PV factor is greater for cash receipts scheduled for the near future, and smaller for receipts that are not expected until a later date. The factor is always a number less than one. The formula for calculating the present value factor is: P = (1 / (1 + r)n). Source: Accounting Tools

Present Value of Multiple Cash Flows

The PV of multiple cash flows is simply the sum of the present values of each individual cash flow. Each cash flow must be discounted to the same point in time. Source: Lumenlearning

Primary Energy

Primary energy is energy in the form that it is first accounted for in a statistical energy balance, before any transformation to secondary or tertiary forms of energy. For example, coal can be converted to synthetic gas, which can be converted to electricity; in this example, coal is primary energy, synthetic gas is secondary energy, and electricity is tertiary energy. See Primary energy production and Primary energy consumption. Source: EIA

Principle Reduction

A principal reduction is a decrease in the amount owed on a loan, typically a mortgage. A lender may grant a principal reduction to provide financial relief for a borrower as an alternative to foreclosure on the property. Source: Investopedia


Pro rata is a Latin term used to describe a proportionate allocation. It essentially translates to "in proportion," which means a process where whatever is being allocated will be distributed in equal portions. Source: Investopedia

Proceeds Account

Project revenues are deposited into a proceeds account. The proceeds account is controlled by a custodian to disburse funds prescribed by the lenders. In project finance, this is often structured using waterfall payments. A proceeds account controlled by a third-party avoids inadvertently misdirecting funds.

Production Tax Credit

Renewable electricity Production Tax Credits (PTC) in section 45 of the Internal Revenue Code are available for the domestic production and sale of electricity from qualified sources and are equal to either $0.022/kWh ($0.015 adjusted for inflation each year; $0.022/kWh is the current value), or half that amount for certain types of power-producing systems during their first 10 years of operation. Source: Department of Energy

Profitability Index

The profitability index (PI) (Benefit-to-cost ratio), alternatively referred to as value investment ratio (VIR), or profit investment ratio (PIR), describes an index that represents the relationship between the costs and benefits of a proposed project. Source: Investopedia


Nuclear proliferation is the spread of nuclear weapons, fissionable material, and weapons-applicable nuclear technology and information to nations not recognized as "Nuclear Weapon States" by the Treaty on the Non-Proliferation of Nuclear Weapons, commonly known as the Non-Proliferation Treaty or NPT. Source: United Nations

Prudence Review

Once a power plant or other capital project is completed, the commission may conduct a prudence review to determine if it has been constructed or implemented as proposed, according to sound management practices, and at a reasonable cost and with reasonable care. This review may compare utility performance to a previously reviewed set of goals, or it may be prepared on an ad hoc basis for a specific project. Source: RAP

Public Capital Markets

Capital markets are venues where savings and investments are channeled between the suppliers who have capital and those who are in need of capital. Public capital markets are open markets in which many securities can be bought or sold by anyone in the general population. Examples of securities include: common equity, hybrid securities, derivatives, rated (investment-grade or high yield) bonds, asset-backed securities, CDOs/CBOs/MBS, yieldcos, MLPs, REITs. As an example, the US stock market is currently the world’s largest, most liquid public equity market. Source: Investopedia

Public Utilities Commission

In the United States, a utilities commission, utility regulatory commission (URC), public utilities commission (PUC), or public service commission (PSC) is a governing body that regulates the rates and services of a public utility, such as an electric utility. In some cases, government bodies with the title "public service commission" may be civil service oversight bodies, rather than utilities regulators. Source: Wikipedia

Pumped Storage Hydropower

PSH / PHES. Source: Department of Energy

Pure Discount Loans

In a pure discount loan, the borrower receives money today and
makes one lump-sum payment at some time in the future. Source: Lakeheadu



Quad, unit of energy equal to 1 quadrillion (1015) British thermal units (BTUs). The quad is a convenient unit for describing national and world energy resources. One quad is also equal to 293 billion kilowatt-hours. Source: Britannica Encyclopedia



R-squared (R2) is a statistical measure that represents the proportion of the variance for a dependent variable that's explained by an independent variable or variables in a regression model. Whereas correlation explains the strength of the relationship between an independent and dependent variable, R-squared explains to what extent the variance of one variable explains the variance of the second variable. Source: Investopedia

Rate Case

A proceeding, usually before a regulatory commission, involving the rates to be charged for a public utility service. Source: U.S. Energy Information Administration

Ratings Agency

A rating agency is a company that assesses the financial strength of companies and government entities, especially their ability to meet principal and interest payments on their debts. Source: Corporate Finance Institute

Real Estate Investment Trusts

A real estate investment trust (REIT) is a company that owns, operates or finances income-producing properties (real estate). REITs are formed to hold long-lived assets with stable income streams and must include 75% of its total assets in real estate. Most REITs have a straightforward business model: The REIT leases space and collects rents on the properties, then distributes that income as dividends to shareholders. REITs are easy to buy and sell, as most trade on public exchanges. This marketable feature mitigates some of the traditional drawbacks of real estate (e.g., illiquidity). REITs also typically offer attractive risk-adjusted returns and stable cash flow. However, REITs don't offer much in terms of capital appreciation. As part of their structure, they must pay 90% of income back to investors. So, only 10% of taxable income can be reinvested back into the enterprise to purchase new holdings. Source: Richard Kauffman, FDCE presentation, Investopedia

Real-Time Market

The Real-Time Energy Market lets market participants buy and sell wholesale electricity during the course of the operating day. The Real-Time Energy Market balances the differences between day-ahead commitments and the actual real-time demand for and production of electricity. The Real-Time Energy Market produces a separate, second financial settlement. It establishes the real-time locational marginal price (LMP) that is either paid or charged to participants in the Day-Ahead Energy Market for demand or generation that deviates from the day-ahead commitments. Source: ISO-NE

Real-Time Pricing

Real-time pricing (RTP) gives consumers information about the actual cost of electricity at any given time. Electricity prices change from hour to hour, but most consumers are forced to pay the same price no matter when they use electricity. Real-time pricing lets consumers adjust their electricity usage. For example, scheduling usage during periods of low demand to pay cheaper rates. Source: Galvin Power 


Renewable Energy Certificates (RECs) are a market-based instrument that certifies the bearer owns one megawatt-hour (MWh) of electricity generated from a renewable energy resource. Source: Investopedia


Recitals (preamble) refer to the "whereas" clauses that precede the main text of a contract. They provide a general idea about the contract to its reader such as, what the contract is about, who the parties are, why they are signing a contract. Source: USLegal

Reforming the Energy Vision

Reforming the Energy Vision (REV) is Governor Andrew M. Cuomo’s comprehensive energy strategy for New York. REV is intended to make a clean, resilient, and more affordable energy system a reality, while spurring energy innovation, bringing new investments into the State, and expanding consumer choice. The strategy includes regulatory reform and market activation activities.

Regional Greenhouse Gas Initiative

A cooperative cap-and-trade initiative undertaken by the Northeastern and Mid-Atlantic states to reduce carbon dioxide emissions. To address the important climate (greenhouse gas reductions) issue, the RGGI participating states developed and are implementing a regional program for reducing emissions through the implementation of a multi-state market-based emissions trading system. Similar initiatives are being planned in the Midwest, through the Midwestern Greenhouse Gas Accord, and in the West, through the Western Climate Initiative. Source: American Council for an Energy-Efficient Economy

Regional Transmission Organization

A regional transmission organization (RTO) in the United States is an electric power transmission system operator (TSO) that coordinates, controls, and monitors a multi-state electric grid. The transfer of electricity between states is considered interstate commerce, and electric grids spanning multiple states are therefore regulated by the Federal Energy Regulatory Commission (FERC). The voluntary creation of RTOs was initiated by FERC Order No. 2000, issued on December 20, 1999. The purpose of the RTO is to promote economic efficiency, reliability, and non-discriminatory practices while reducing government oversight. Source: Wikipedia


Regression is a statistical method used in finance, investing, and other disciplines that attempts to determine the strength and character of the relationship between one dependent variable (usually denoted by Y) and a series of other variables (known as independent variables). Source: Investopedia

Regulated Rate of Return

Rate of return regulation is a form of price setting regulation where governments determine the fair price which is allowed to be charged by a monopoly. It is meant to protect customers from being charged higher prices due to the monopoly's power while still allowing the monopoly to cover its costs and earn a fair return for its owners. Source: Investopedia

Regulated Utilities

A “regulated energy market” is where a utility company owns the electric transmission lines and all associated infrastructure (like power poles, power lines and transformers), and generates (makes) or purchases electricity and sells it to customers. Utility companies have to show a return on investment or a benefit for the money they spend. Source: Duke Energy

Regulatory Compact

Arrangement in which distribution utilities were franchised or allotted a geographic area in which they became the exclusive provider, provided they agreed to serve all consumers, referred to as an obligation to serve, in return for which they were guaranteed a “fair” rate of return. Source: Science Direct

Renewable Electricity Production Tax Credit

The Renewable Electricity Production Tax Credit (PTC) is a per-kilowatt-hour tax credit for electricity generated from qualified renewable resources including, but not limited to, wind, geothermal, and closed-loop biomass. It incentivizes renewable energy in a market dominated by fossil fuels. This tax credit is generally only available for the first ten years of production. The PTC is not typically used for solar generation.

Renewable Energy Certificates

A renewable energy certificate, or REC (pronounced: rěk), is a market-based instrument that represents the property rights to the environmental, social and other non-power attributes of renewable electricity generation. RECs are issued when one megawatt-hour (MWh) of electricity is generated and delivered to the electricity grid from a renewable energy resource. Source: EPA

Renewable Portfolio Standard

Renewable portfolio standards (RPS), also referred to as renewable electricity standards (RES), are policies designed to increase generation of electricity from renewable resources. These policies require or encourage electricity producers within a given jurisdiction to supply a certain minimum share of their electricity from designated renewable resources. Generally, these resources include wind, solar, geothermal, biomass, and some types of hydroelectricity, but may include other resources such as landfill gas, municipal solid waste, and tidal energy. Source: U.S. Energy Information Administration

Request for Proposal

A request for proposal is a project funding announcement posted by an organization for which companies place bids.The RFP outlines the bidding process and contract terms and guides how the bid should be formatted. RFPs are used primarily by government agencies to get the lowest possible bid. An RFP is used to solicit bids from contractors who wish to help complete some or all of the project. Source: Investopedia

Residential Solar Incentive Program

A solar incentive program for residential customers offered through the Connecticut Green Bank. The RSIP offers an upfront rebate and a performance-based incentive based on the size of the solar system. Source: Go Solar CT

Resource Adequacy

“In the US, resource adequacy refers to the “ability of the electric system to supply the aggregate electrical demand and energy requirements of the end-use customers at all times” — in effect, to provide reliable supply 99.97 percent of the time.” Source: North American Electric Reliability Corporation, Glossary of Terms Used in Reliability Standards, April 20, 2009


A percentage of a contract price retained from a contractor as assurance that subcontractors will be paid and that the job will be completed. Source: Merriam Webster

Retained Earnings

Retained earnings (RE) is the amount of net income left over for the business after it has paid out dividends to its shareholders. A business generates earnings that can be positive (profits) or negative (losses). Source: Investopedia

Return on Equity

Return on equity is a measure of financial performance calculated by dividing net income by shareholders' equity. Source: Investopedia

Revolving Loan

Arrangement which allows for the loan amount to be withdrawn, repaid, and redrawn again in any manner and any number of times, until the arrangement expires. Source: Business Dictionary

Right of First Refusal

Right of first refusal (ROFR), also known as first right of refusal, is a contractual right to enter into a business transaction with a person or company before anyone else can. If the party with this right declines to enter into a transaction, the obligor is free to entertain other offers. This is a popular clause among lessees of real estate because it gives them preference to the properties in which they occupy. However, it may limit what the owner could receive from interested parties competing for the property. Source: Investopedia

Rural Electric Coops

A nonprofit, customer-owned electric utility that distributes power in a rural area. Source: California Energy Comission


Safe Harbor

A safe harbor is a provision in a law that affords protection from liability or penalty when certain conditions are met. In the case of the ITC, it allows firms to purchase PP&E and lock in their ITC rate before completing the majority of production.

Salvage Value

Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important component in the calculation of a depreciation schedule. Source: Investopedia

Seasonal Energy Efficiency Rating

SEER stands for Seasonal Energy Efficiency Ratio. This is the ratio of the cooling output of an air conditioner over a typical cooling season, divided by the energy it uses in Watt-Hours. It may also be called a Seasonal Energy Efficiency Rating. Source: Trane

Seasonality Account

The seasonality account is a project specific account. The seasonality account is a cash account that provides reserves to account for seasonal fluctations (e.g. winter/summer solar power production).

Second Loss

A form of loan loss guarantee that covers the risk of losses on a loan portfolio but only after the initial (first) losses are shouldered by the bank. For instance, if a bank normally expects a 1.5% loss at the portfolio level, a second loss reserve fund would repay the bank for losses in excess of the 1.5% up to an agreed upon level.

Secondary Energy

Secondary energy is a carrier of energy, such as electricity. These are produced by conversion from a primary energy source. Source: Wikipedia

Secondary Market

Secondary markets are ones where securities and other assets can be purchased from somebody other than the initial issuer of the asset. For example, when a bank sells the mortgages that it originated as mortgage-backed securities, it is selling into a secondary market. Secondary markets are particularly important to clean energy finance because the payment obligations that are created through clean energy finance mechanisms like PACE and On-Bill Repayment (see definitions above) can be turned into an asset and sold on secondary markets. The ability to sell these assets on the secondary market is very attractive to investors and helps drive down the cost of capital for clean energy projects.

Secondary market

Secondary markets are ones where securities and other assets can be purchased from somebody other than the initial issuer of the asset. For example, when a bank sells the mortgages that it originated as mortgage-backed securities, it is selling into a secondary market. Secondary markets are particularly important to clean energy finance because the payment obligations that are created through clean energy finance mechanisms like PACE and On-Bill Repayment (see definitions above) can be turned into an asset and sold on secondary markets. The ability to sell these assets on the secondary market is very attractive to investors and helps drive down the cost of capital for clean energy projects. Source: EDF Energy Exchange


This is the process of combining financial assets into a pool and then selling portions of that combined pool on the secondary market to institutional investors, such as pension funds. The resulting asset (i.e., mortgage-backed securities) generally requires a credit rating from a rating agency assessing the risk associated with it. By allowing the original investor in a project to sell the resulting asset on the secondary market, securitization increases initial lenders’ willingness to provide low-cost capital. This is particularly true if the resulting securities receive a high credit rating because the asset will be worth more on the secondary market.


A financial engineering process of turning an illiquid asset or group of assets (usually debt) into tradable assets. Often tiimes the issued bonds are backed by the asset's cash flows. For example, when a financial institution originates a loan, the institution will have claims to collateral and future payments on the loan, but these are illiquid assets with clear counterparty risk. The borrower could fail to repay the loan, and so banks often bundle all these notes or claims in the process of securitization and sell them for cash. Source: Richard Kauffman, FDCE presentation


The term "security" refers to a fungible, negotiable financial instrument that holds some type of monetary value. It represents an ownership position in a publicly-traded corporation via stock; a creditor relationship with a governmental body or a corporation represented by owning that entity's bond; or rights to ownership as represented by an option. Source: Investopedia

Security Agreement

A security agreement refers to a document that provides a lender a security interest in a specified asset or property that is pledged as collateral. Source: Investopedia

Security Market Line

The security market line (SML) is a line drawn on a chart that serves as a graphical representation of the capital asset pricing model (CAPM)—which shows different levels of systematic, or market risk, of various marketable securities, plotted against the expected return of the entire market at any given time. Source: Investopedia

Series A

"Series A, B, and C funding rounds are merely stepping stones or benchmarks in the process of turning an ingenious idea into a company, ripe for an IPO through outside investment. There are other types of funding rounds also available to startups, depending upon the industry and the level of interest among potential investors. It's not uncommon for startups to engage in what is known as "seed" funding or angel investor funding at the outset. Next, these funding rounds can be followed by Series A, B, and C funding rounds, as well as additional efforts to earn capital as well, if appropriate.Once a business has developed a track record (an established user base, consistent revenue figures, or some other key performance indicator), that company may opt for Series A funding in order to further optimize its user base and product offerings. Opportunities may be taken to scale the product across different markets. In this round, it’s important to have a plan for developing a business model that will generate long-term profit. Often times, seed startups have great ideas that generate a substantial amount of enthusiastic users, but the company doesn’t know how it will monetize the business. Typically, Series A rounds raise approximately $2 million to $15 million, but this number has increased on average due to high tech industry valuations, or "unicorns." The average Series A funding as of 2020 is $12.5 million." Source: Investopedia

Shale Gas

Shale gas, natural gas obtained from sheetlike formations of shale, frequently at depths exceeding 1,500 metres (5,000 feet). Shales are fine-grained sedimentary rocks consisting of silt- and clay-sized particles that were laid down hundreds of millions of years ago as organic-rich mud at the bottom of ancient seas and tidal flats. Source: Britannica Encyclopedia


A shareholder, also referred to as a stockholder, is a person, company, or institution that owns at least one share of a company’s stock, which is known as equity. Because shareholders are essentially owners in a company, they reap the benefits of a business’ success. These rewards come in the form of increased stock valuations, or as financial profits distributed as dividends. Conversely, when a company loses money, the share price invariably drops, which can cause shareholders to lose money, or suffer declines in their portfolios’ values. Source: Investopedia

Single Buyer Market

A monopsony is a market condition in which there is only one buyer, the monopsonist. Like a monopoly, a monopsony also has imperfect market conditions. Source: Investopedia

Smart Contract

"A smart contract is a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code. The code and the agreements contained therein exist across a distributed, decentralized blockchain network. The code controls the execution, and transactions are trackable and irreversible." Source: Investopedia

Social Cost of Carbon

The social cost of carbon (SCC) is the marginal cost of the impacts caused by emitting one extra tonne of greenhouse gas (carbon dioxide equivalent) at any point in time, inclusive of ‘non-market’ impacts on the environment and human health. The purpose of putting a price on a ton of emitted CO2 is to aid policymakers or other decision makers in evaluating whether a policy designed to curb climate change is justified. Source: Wikipedia


SODAR (SOnic Detection And Ranging), also written as sodar, is a meteorological instrument used as a wind profiler to measure the scattering of sound waves by atmospheric turbulence. SODAR systems are used to measure wind speed at various heights above the ground, and the thermodynamic structure of the lower layer of the atmosphere. Source: Wikipedia

Solar Constant

Solar constant, the total radiation energy received from the Sun per unit of time per unit of area on a theoretical surface perpendicular to the Sun’s rays and at Earth’s mean distance from the Sun. It is most accurately measured from satellites where atmospheric effects are absent. The value of the constant is approximately 1.366 kilowatts per square meter. Source: Britannica Encyclopedia

Solar Investment Tax Credit

The solar Investment Tax Credit (ITC) is a 30-percent United States federal tax credit for the cost of solar systems installed on residential and commercial properties. It is gradually ramping down over time.

Solar Irradiance

Irradiance is the amount of light energy from one thing hitting a square meter of another each second. Photons that carry this energy have wavelengths from energetic X-rays and gamma rays to visible light to the infrared and radio.The solar irradiance is the output of light energy from the entire disk of the Sun, measured at the Eart. Source: NASA

Solar Lease

This is a contractual agreement under which an individual or business allows solar panels owned by a third party to be installed on their property and leases those panels for a fixed period of time. Lease periods typically fall between 10 and 20 years. Third-party ownership structures, such as solar leases and solar power-purchase agreements, allow investors to take full advantage of the tax benefits of solar (see Tax Equity Investment).

Solar Lease

This is a contractual agreement under which an individual or business allows solar panels owned by a third party to be installed on their property and leases those panels for a fixed period of time. Lease periods typically fall between 10 and 20 years. Third-party ownership structures, such as solar leases and solar power-purchase agreements, allow investors to take full advantage of the tax benefits of solar (see Tax Equity Investment). Source: EDF Energy Exchange

Solar Power-Purchase Agreement

A solar power-purchase agreement (PPA) is a contractual agreement under which an individual or business allows solar panels owned by a third party to be installed on their property and agrees to purchase the power produced from the solar installation at an agreed-upon rate over a fixed period of time. Third-party ownership structures such as Solar Leases and Power Purchase Agreements allow investors and consumers to take full advantage of the tax benefits of solar (see Tax Equity Investment).

Special Capital Reserve Fund

(SCRF) A comprehensive budget plan is often comprised of two essential elements: an operating budget and a capital budget to provide both the services and facilities needed to fulfill the functions of government. Financial assistance programs administered by state agencies provide funds to municipal through grants and/or loans from the capital budget. The Special Capital Reserve Fund is a debt service reserve fund set up at the time bonds are issued, and if the borrower is unable to pay all or part of the scheduled debt service payments, the reserve may be drawn upon to pay debt service. SCRF is a type of bond insurance which yields blanket protection so that investors don't suffer losses. Source: CT General Assembly's Office of Fiscal Analysis

Special Purpose Vehicle

A special purpose vehicle (SPV) is a subsidiary created by a parent company to isolate financial risk. Its legal status as a separate company makes its obligations secure even if the parent company goes bankrupt. Source: Investopedia

Split Incentives

In the context of energy efficiency, split incentives occur due to the diverging incentives between property owners and tenants. While there are no split incentives when an occupant owns their property and pays for their own energy use (they want to improve efficiency and/or lower energy use to minimize costs), there are split incentives when (1) an occupant owns their property, but doesn't pay for their energy use (lower incentive to reduce energy use or make energy efficiency improvements), (2) the occupant rents but pays utility costs (the property owner isn't incentivized to make energy efficiency improvements since they're not paying for energy use), and (3) the occupant rents and does not pay their utility costs (the occupant has little incentive to reduce their energy use). Source: Gillingham, Harding, and Rapson (2010)


The investor(s) who develop and lead the project through their investment in the Project Company. Source: Principles of Project Finance, E.R. Yescombe

Spot Market

The spot market is where financial instruments, such as commodities, currencies and securities, are traded for immediate delivery. Delivery is the exchange of cash for the financial instrument. Source: Investopedia

Spot Tracking

When financial instruments, such as commodities, currencies and securities, are traded for immediate delivery.

Steam Engine

Steam engine is a machine using steam power to perform mechanical work through the agency of heat.In a steam engine, hot steam, usually supplied by a boiler, expands under pressure, and part of the heat energy is converted into work. The remainder of the heat may be allowed to escape, or, for maximum engine efficiency, the steam may be condensed in a separate apparatus, a condenser, at comparatively low temperature and pressure. Source: Britannica Encyclopedia

Step-in Rights

Step-in rights are rights given to lenders in project financed arrangements to "step in" to the project company's position in the contract to take control of the infrastructure project where the project company is not performing. Source: Public-Private-Partnership Legal Resource Center

Stochastic Modeling

Stochastic modeling forecasts the probability of various outcomes under different conditions, using random variables. Source: Investopedia

Subordinated Loan

Subordinated loans (also known as subordinated debt) is debt that is only paid off after all primary loans/debts are paid off if there is money remaining. In the case of bankruptcy, courts will prioritize loans to be repaid. Lesser-priority debt is known as subordinated debt; higher priority debt is known as unsubordinated debt. Source: Investopedia

Substancial Completion

Substantial completion is the stage when a construction project is deemed sufficiently completed to the point where the owner can use it for its intended purpose. Source: Xpera Group


Superfund allows EPA to clean up contaminated sites. It also forces the parties responsible for the contamination to either perform cleanups or reimburse the government for EPA-led cleanup work. (Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)). Source: EPA

Swanson's Law

Swanson’s Law is the observation that the price of solar photovoltaic modules tends to drop 20% for every doubling of cumulative shipped volume. Source: PV Magazine

Swept Area

The swept area (Disk Area) refers to the area of the circle created by the blades as they sweep through the air. To find the swept area, use the same equation you would use to find the area of a circle. Source: Minnesota Municipal Power Agency

System benefit Fund

System Benefit Funds (also known as Public Benefit Funds) are funding mechanisms for energy efficiency, renewable energy, and low-income assistance programs and projects. These funds are typically funded through a charge on a customers’ utility bill based on energy usage level, or through a flat fee charge.  Source: U.S. Department of Energy


Take or Pay Contract

A contract under which the purchaser must buy
the product or make a payment in lieu. Source: Principles of Project Finance, E.R. Yescombe

Take out financing

A takeout loan, or takeout financing, is long-term financing that the lender promises to provide at a particular date or when particular criteria for completion of a project are met. Source: Investopedia

Take-out Loan

A take-out loan is a type of long-term financing that replaces short-term interim financing. Such loans are usually mortgages that are collateralized with assets and have fixed payments that are amortizing. 

Take-out lenders who underwrite these loans are normally large financial conglomerates, such as insurance or investment companies, while banks or savings and loan companies usually issue short-term loans, such as a construction loan. Source: Investopedia

Tax Carryforwards

A tax loss carryforward is a provision that allows a taxpayer to carry over a tax loss to future years to offset a profit. The tax loss carryforward can be claimed by an individual or a business in order to reduce any future tax payments. Source: Investopedia

Tax Equity

Tax equity finance involves splitting the benefits of solar electricity production from the tax benefits and other incentives that flow from renewable energy and energy efficiency projects. Property owners receive the benefits of solar and the financial institutions receive the benefits of tax credits, deductions, rebates and the like. Source: Solomon Energy

Tax Equity Investment (Third-Party Ownership)

This is an investment in solar development by a third-party private investor who utilizes federal tax benefits to offset taxes they would otherwise owe. In such an arrangement, a third party investor owns the solar panels and collects the tax benefits while leasing out the panels or selling the power through a solar power-purchase agreement. The two primary tax benefits for solar investment are the solar Investment Tax Credit (ITC) and the MACRS. In practice, tax equity investments are generally attractive for profitable financial companies and for a few wealthy individuals with extensive real estate holdings.

Temperature Gradient

A temperature gradient is a physical quantity that describes in which direction and at what rate the temperature changes the most rapidly around a particular location. Source: Wikipedia

Term Loan

A term loan is a loan from a bank for a specific amount that has a specified repayment schedule and either a fixed or floating interest rate. Source: Investopedia

The Employee Retirement Income Security Act

ERISA is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans. Source: U.S. Department of Labor


A thermocline is the transition layer between warmer mixed water at the ocean's surface and cooler deep water below. Source: NOAA

Third Party Cover

Third-party insurance (cover) is an insurance policy purchased for protection against the claims of another. One of the most common types is third-party insurance is automobile insurance. Third-party offers coverage against claims of damages and losses incurred by a driver who is not the insured, the principal, and is therefore not covered under the insurance policy. The driver who caused damages is the third party. Source: Investopedia

Time of use rates

The pricing of electricity based on the estimated cost of electricity during a particular time block. Time-of-use rates (TOU Rates) are usually divided into three or four time blocks per twenty-four hour period (on-peak, mid-peak, off-peak and sometimes super off-peak) and by seasons of the year (summer and winter). Real-time pricing differs from TOU rates in that it is based on actual (as opposed to forecasted) prices which may fluctuate many times a day and are weather-sensitive, rather than varying with a fixed schedule. Source: California Energy Commission

Time Value of Money

The time value of money (TVM) is the concept that money you have now is worth more than the identical sum in the future due to its potential earning capacity. This core principle of finance holds that provided money can earn interest, any amount of money is worth more the sooner it is received. Source: Investopedia

Tip Speed Ratio

The tip-speed ratio, λ, or TSR for wind turbines is the ratio between the tangential speed of the tip of a blade and the actual speed of the wind. The tip-speed ratio is related to efficiency, with the optimum varying with blade design. Source: Wikipedia

Tragedy of the Commons

The tragedy of the commons is an economic problem in which every individual has an incentive to consume a resource at the expense of every other individual with no way to exclude anyone from consuming. It results in overconsumption, under investment, and ultimately depletion of the resource. As the demand for the resource overwhelms the supply, every individual who consumes an additional unit directly harms others who can no longer enjoy the benefits. Generally, the resource of interest is easily available to all individuals; the tragedy of the commons occurs when individuals neglect the well-being of society in the pursuit of personal gain. Source: Investopedia


A common financial structure for a pooled collection of securities, usually debt instruments. Each tranche, or group, shares common risk profiles. The tranches can be structured in virtually any way that the issuer sees fit, allowing a single security to be tailored for a variety of risk tolerance profiles.This spreads the risk of default around, similar to how standard portfolio diversification works. Source: Investopedia


Transformer, device that transfers electric energy from one alternating-current circuit to one or more other circuits, either increasing (stepping up) or reducing (stepping down) the voltage. Transformers are employed for widely varying purposes; e.g., to reduce the voltage of conventional power circuits to operate low-voltage devices and to raise the voltage from electric generators so that electric power can be transmitted over long distances. Source: Britannica Encyclopedia

Tristructural-isotropic (TRISO) Fuel

An alternative type of high performance nuclear fuel that is made of three different types of fuel kernels: uranium, carbon, and oxygen. TRISO fuels are structurally more resistant to neutron irradiation, corrosion, oxidation and high temperatures than traditional reactor fuels. Furthermore, each particle acts as its own containment system and cannot melt in a reactor. Source: United States Department of Energy


A trustee is a person or firm that holds and administers property or assets for the benefit of a third party. A trustee may be appointed for a wide variety of purposes, such as in the case of bankruptcy, for a charity, for a trust fund, or for certain types of retirement plans or pensions. 

Trustees are trusted to make decisions in the beneficiary's best interests and often have a fiduciary responsibility, meaning they act in the best interests of the trust beneficiaries to manage their assets. Source: Investopedia

Turnkey Contract

A construction contract under which a contractor is employed to plan, design and build a project or an infrastructure and do any other necessary development to make it functional or 'ready to use' at an agreed price and by a fixed date. Source: Business Novice


UCC-1 Filing

A type of business loan in the US that is commonly taken out against a property. The lender is the existing mortgage holder and there is often no additional consent required. Details required on the UCC-1 statement include information on the borrower and the assets being secured for the loan. The filings are used by lenders to announce their rights to collateral or liens on secured loans. Source: National Association of Credit Management


Underwriting is the process through which an individual or institution takes on financial risk for a fee. This risk most typically involves loans, insurance, or investments. The term underwriter originated from the practice of having each risk-taker write their name under the total amount of risk they were willing to accept for a specified premium. Source: Investopedia

Uniform Commercial Code

The Uniform Commercial Code (UCC), first published in 1952, is one of a number of Uniform Acts that have been established as law with the goal of harmonizing the laws of sales and other commercial transactions across the United States of America. Source: Wikipedia

Unsecured Loan

An unsecured loan is a loan that is not supported by "collateral," i.e., assets, but only by the borrower's creditworthiness. In case of default, the lender may not seize and sell the borrower's assets through "foreclosure," but may still take the defaulting borrower to court, and seek various remedies, like the placement of a lien on some of the borrower's assets, or request that the borrower's wages be garnished. A typical example of an unsecured loan is a credit card. Source: Yale SOM

US Department of Housing and Urban Development

(HUD) The goal of this branch of government is to support community development, home ownership and to make sure that everyone has access to fair and equal housing. Source: Investopedia

Useful Life

The value leftover once the PP&E is fully depreciatedThe useful life of an asset is an accounting estimate of the number of years it is likely to remain in service for the purpose of cost-effective revenue generation. Source: Investopedia


Value Added Tax

a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. Source: Investopedia

Value of Distributed Energy Resources

VDER is the successor to net metering in the state of New York. It fulfils the same function of providing credits to customers, but compensates distributed energy resource projects based on when and where they provide electricity to the grid rather than strictly the supply of energy to the grid. VDER aims to more accurately reflect the additional locational value of distributed energy resources, and is calculated by a stack of different value streams including demand reduction value, locational pricing and avoided carbon emissions among other elements. Source: Richard Kauffman, FDCE presentation

Venture Capitalist

A private equity investor that provides capital to companies exhibiting high growth potential in exchange for an equity stake. Venture Capital (VC) is often administered through the form of a fund, in which the partners of the fund expect to receive a return on their investments. Venture capital is usually deployed towards the beginning of a company's lifecycle during the seed stage, early stage or growth stage. Source: Investopedia

Vertical Integration

The combination within a firm or business enterprise of one or more stages of production or distribution. In the electric industry, it refers to the historical arrangement whereby a utility owns its own generating plants, transmission system, and distribution lines to provide all aspects of electric service. Source: U.S. Energy Information Administration

Virtual Power Plant

VPPs are an aggregation of power customers at a granular level based on a utility's needs. Customers can be grouped, for exmaple, under one type of Pricing, Demand Response, or Distributed Energy Resource program and/or by type and location in the distribution topology or some other agreed upon aggregation.
Such grouping allows a utility to better forecast and analyze information about the value that these particular customers and programs can bring to the utility and improve operational decision making. For example, the distribution organization may group customers into VPP’s that fit their distribution model, while the retailers or generators group customers by city or some other higher–level aggregation. Source:

Virtual Power Purchase Agreement

Virtual PPA—Within a VPPA contract, the corporate buyer does not own and is not responsible for the physical electrons generated by the project. The VPPA is purely a financial transaction, exchanging a fixed-price cash flow for a variable-priced cash flow and renewable energy certificates (RECs). Because the VPPA is purely financial, the buyer still needs to meet its electricity load through traditional channels—therefore, the VPPA means the buyer’s relationship with its utility at the retail level remains unchanged. Source: RMI

Volatile Organic Compound

Volatile organic compounds (VOC) means any compound of carbon, excluding carbon monoxide, carbon dioxide, carbonic acid, metallic carbides or carbonates and ammonium carbonate, which participates in atmospheric photochemical reactions, except those designated by EPA as having negligible photochemical reactivity. Volatile organic compounds, or VOCs are organic chemical compounds whose composition makes it possible for them to evaporate under normal indoor atmospheric conditions of temperature and pressure. Source: EPA


Voltage, electric potential difference, electric pressure or electric tension is the difference in electric potential between two points. Volt, unit of electrical potential, potential difference and electromotive force in the metre–kilogram–second system (SI); it is equal to the difference in potential between two points in a conductor carrying one ampere current when the power dissipated between the points is one watt. An equivalent is the potential difference across a resistance of one ohm when one ampere is flowing through it. Source: Britannica Encyclopedia


Wake Effect

Wind turbines extract energy from the wind and downstream there is a wake from the wind turbine, where wind speed is reduced. As the flow proceeds downstream, there is a spreading of the wake and the wake recovers towards free stream conditions. The wake effect is the aggregated influence on the energy production of the wind farm, which results from the changes in wind speed caused by the impact of the turbines on each other. Source: Wind Energy Facts


A form of aggregation of smaller loans (e.g., residential energy efficiency loans) that a green bank can create to later offer for sale on the secondary market. Source: Coalitionforgreencapital

Water Shed

It’s a land area that channels rainfall and snowmelt to creeks, streams, and rivers, and eventually to outflow points such as reservoirs, bays, and the ocean.The size of a watershed is defined on several scales—referred to as its Hydrologic Unit Codes (HUC)—based on the geography that is most relevant to its specific area. A watershed can be small, such as a modest inland lake or a single county. Source: National Oceanic and Atmospheric Administration

Waxman Markey

American Clean Energy and Security Act of 2009 - Sets forth provisions concerning clean energy, energy efficiency, reducing global warming pollution, transitioning to a clean energy economy, and providing for agriculture and forestry related offsets. Includes provisions: (1) creating a combined energy efficiency and renewable electricity standard and requiring retail electricity suppliers to meet 20% of their demand through renewable electricity and electricity savings by 2020; (2) setting a goal of, and requiring a strategic plan for, improving overall U.S. energy productivity by at least 2.5% per year by 2012 and maintaining that improvement rate through 2030; and (3) establishing a cap-and-trade system for greenhouse gas (GHG) emissions and setting goals for reducing such emissions from covered sources by 83% of 2005 levels by 2050. Source: U.S. Congress

Weibull Distribution

In probability theory and statistics, the Weibull distribution is a continuous probability distribution. It is named after Swedish mathematician Waloddi Weibull. Source: Wikipedia

Wind Rose

A wind rose is a graphic tool used by meteorologists to give a succinct view of how wind speed and direction are typically distributed at a particular location. Source: Wikipedia

Working Capital

Working capital, also known as net working capital (NWC), is the difference between a company’s current assets, such as cash, accounts receivable (customers’ unpaid bills) and inventories of raw materials and finished goods, and its current liabilities, such as accounts payable. Net operating working capital is a measure of a company's liquidity and refers to the difference between operating current assets and operating current liabilities. Source: Investopedia


Yield to Maturity

Yield to maturity (YTM) is the total return anticipated on a bond if the bond is held until it matures. Yield to maturity is considered a long-term bond yield but is expressed as an annual rate. In other words, it is the internal rate of return (IRR) of an investment in a bond if the investor holds the bond until maturity, with all payments made as scheduled and reinvested at the same rate. Yield to maturity is also referred to as "book yield" or "redemption yield." Keep in mind that “yield” is used by practitioners to mean several different things in relation to bonds. While yield to maturity refers to the discount rate applied to a bond to calculate its value, or the interest rate applied to similar bonds in the market; current yield refers to the annual coupon value divided by the current market value. Source: Investopedia and FCDE Finance Course 


A yieldco is a publicly traded company that is created for the purpose of owning assets that produce cash flow. Some yieldcos specifically focus on renewable energy assets. The income from these assets is then generally distributed to the shareholders as dividends. While yieldcos are structured as normal taxpaying corporations, yieldcos that own renewable resources can use the tax benefits associated with clean energy investment to avoid paying taxes.


A yieldco is an investment vehicle (company) formed by a parent company to own operating assets. These long-term contracted assets are expected to generate stable cash flows, most of which are distributed as dividends. Yieldcos are often known as synthetic MLPs. However, unlike MLPs that get a tax pass, yieldcos have to pay corporate-level taxes. They depend on depreciation and tax credits to manage corporate taxes. Operational renewable energy projects produce predictable cash flows.Subsequently, YieldCos are an emerging asset class of publicly traded companies that are focused on returning cash flows generated from renewable energy assets to shareholders. Source: Richard Kauffman, FDCE presentation



A Z-score is a numerical measurement that describes a value's relationship to the mean of a group of values. Z-score is measured in terms of standard deviations from the mean. Source: Investopedia

Zenith Angle

The solar zenith angle is the angle between the zenith and the centre of the Sun's disc. The zenith is an imaginary point directly "above" a particular location, on the imaginary celestial sphere. "Above" means in the vertical direction opposite to the apparent gravitational force at that location. The opposite direction, i.e. the direction in which gravity pulls, is toward the nadir. The zenith is the "highest" point on the celestial sphere. Source: Wikipedia

Zero Coupon

What is a Zero-Coupon Bond. A zero-coupon bond is a debt security that does not pay interest but instead trades at a deep discount, rendering a profit at maturity, when the bond is redeemed for its full face value. Source: Investopedia

Zero Emissions Renewable Energy Credit

A REC available to commercial energy users in the Northeast specific to projects that are behind the meter, emit no pollutants and are less than 1 MW. Source: Eversource