Solar & Heat Pump Glossary
Plain-English definitions of the home-energy terms you'll meet when shopping for solar or a heat pump — from AFUE to 25D. Every entry links to a deeper guide where one exists.
Updated October 2026 — federal credits have ended. The One Big Beautiful Bill Act (signed July 4, 2025) ended the 30% federal Residential Clean Energy Credit (25D: solar, batteries, geothermal) and the Energy Efficient Home Improvement Credit (25C: air-source heat pumps, up to $2,000) for anything installed after December 31, 2025. Systems completed by Dec 31, 2025 can still be claimed on a 2025 return. Any 30% or $2,000 figure on this page applies only to those installs — our calculators now default to $0 federal credit. What is still available in 2026 →
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- 25C credit
- The Energy Efficient Home Improvement Credit — 30% of cost up to $2,000/year for a qualifying air-source heat pump (plus up to $1,200 for other measures). Ended by the One Big Beautiful Bill Act for property placed in service after December 31, 2025, so it only applies to 2025 and earlier installs, claimed on that year's return. Non-refundable, no carryforward. See the credit guide.
- 25D credit
- The Residential Clean Energy Credit — 30% of cost with no cap for solar, batteries (3 kWh+) and geothermal heat pumps. Ended by the One Big Beautiful Bill Act for systems installed after December 31, 2025. Installs completed by then are claimed on the 2025 return (Form 5695), and unused credit can still carry forward. A missed claim can generally be fixed with Form 1040-X within three years. See the solar tax credit guide.
A
- AFUE
- Annual Fuel Utilization Efficiency — the seasonal efficiency rating for furnaces and boilers, expressed as a percentage of fuel converted to useful heat. A 95% AFUE furnace wastes 5% of its fuel. Unlike a heat pump, a combustion system can never exceed 100% AFUE.
- Air-source heat pump (ASHP)
- A heat pump that exchanges heat with outdoor air to heat and cool a home. The most common residential type. Units installed through 2025 could qualify for the 25C credit (30% up to $2,000), which ended after 2025; in 2026, HEAR and utility rebates are the main incentives. See our ASHP vs GSHP guide.
- Air-to-water heat pump
- A heat pump that heats water rather than air, supplying radiators, underfloor heating or a hot-water cylinder. Useful for replacing a boiler in a home with hydronic heating; see our older-homes guide.
- Azimuth
- The compass direction a solar array faces. In the US, due south (180°) is ideal, though southeast to southwest orientations lose only modest production. Covered in our roof suitability guide.
B
- Balance point
- In a dual-fuel system, the outdoor temperature below which the system switches from the heat pump to the backup furnace — typically 25–40°F, set by your local energy prices. See our dual-fuel guide.
- BTU
- British Thermal Unit — the standard unit of heating and cooling capacity. Heat pump and AC capacity is measured in BTUs per hour, or in tons (12,000 BTU/h = 1 ton). See the sizing guide.
C
- CEE tier
- The Consortium for Energy Efficiency's efficiency tiers, used to define which heat pumps qualified for the 25C federal tax credit (ended after 2025). Many state and utility rebate programs still use CEE tiers to decide which units qualify.
- Cold-climate heat pump
- A heat pump engineered to maintain capacity and useful efficiency well below freezing, often listed on the NEEP Cold Climate ASHP list. Essential for northern climates; see our cold-climate guide.
- COP
- Coefficient of Performance — the ratio of heat delivered to electricity consumed at a given moment. A COP of 3 means 300% efficiency. Air-source units run COP 3–4 in mild weather; geothermal holds COP 4–5. See SEER2 vs HSPF2.
D
- Degradation
- The gradual, predictable decline in a solar panel's output, typically about 0.5% per year. After 25 years a panel still produces ~85–88% of its original output. Covered in our lifespan guide.
- DSIRE
- The Database of State Incentives for Renewables & Efficiency (dsireusa.org) — the authoritative, ZIP-searchable catalog of every US state and utility energy incentive. The best place to find your exact rebates.
- Dual-fuel system
- See Hybrid heat pump. A system pairing a heat pump with a backup furnace, switching at the balance point.
- Ductless mini-split
- A heat pump with indoor wall- or ceiling-mounted heads connected to an outdoor unit by a small refrigerant line, requiring no ductwork. Ideal for retrofits, additions and zoning; see ducted vs mini-split.
E
- EER2 / EER
- Energy Efficiency Ratio (updated to EER2 in 2023) — cooling efficiency measured at a single hot temperature (95°F), important in very hot, dry climates. See SEER2 vs HSPF2.
G
- Geothermal heat pump
- Also called ground-source (GSHP) — exchanges heat with the stable temperature of the ground via buried loops. Highly efficient (COP 4–5). Systems installed through 2025 qualified for the uncapped 30% 25D credit, which ended for installs after December 31, 2025. See the geothermal calculator.
H
- HEEHRA / HEAR
- The High-Efficiency Electric Home Rebate / Home Electrification and Appliance Rebates program — IRA-funded, state-administered rebates up to $8,000 for a heat pump for households at or below 80% of area median income, with 50% cost coverage for households at 80–150% of AMI. Not repealed by the 2025 tax law, so they remain available in 2026 where your state has launched its program. See our rebates guide.
- HSPF2 / HSPF
- Heating Seasonal Performance Factor (updated to HSPF2 in 2023) — a heat pump's seasonal heating efficiency. Higher is better; aim for 8.1+ for high-efficiency. Detailed in SEER2 vs HSPF2.
- Hybrid heat pump
- A dual-fuel system combining an electric heat pump with a gas (or propane/oil) furnace, using the heat pump most of the year and the furnace on the coldest days. See our dual-fuel guide.
I
- Interconnection
- The utility's approval and metering process that allows a solar system to connect to the grid and export power. A required step in the permitting process.
- Inverter (HVAC)
- A variable-speed compressor that modulates output rather than cycling fully on and off, delivering steadier temperatures, higher efficiency and quieter operation. The defining feature of premium heat pumps.
- Inverter (solar)
- The device that converts the DC electricity from solar panels into the AC electricity a home uses. Types include string inverters and microinverters.
- IRA
- The Inflation Reduction Act of 2022 — the law that extended the 30% clean-energy tax credits through 2032 and funded the HOMES and HEAR heat pump rebates. The One Big Beautiful Bill Act (July 4, 2025) cut the homeowner credits short at the end of 2025, but left the rebates in place. See our IRA guide.
K
- kW / kWh
- A kilowatt (kW) is a unit of power (system size); a kilowatt-hour (kWh) is a unit of energy (what you're billed for). A 7 kW solar array producing for 1,400 hours yields about 9,800 kWh per year.
L
- Load calculation (Manual J)
- The industry-standard method for calculating a home's precise heating and cooling needs, accounting for insulation, windows, air leakage and size. Proper sizing depends on it; see the sizing guide.
N
- NEM 3.0
- California's revised net-metering policy, which sharply cut the value of exported solar power and increased the value of batteries. Explained in our NEM 3.0 guide.
- Net metering
- A billing arrangement that credits solar owners for electricity exported to the grid, effectively using the grid as a battery. Policies vary by state; see how net metering works.
O
- One Big Beautiful Bill Act (OBBBA)
- The federal tax law signed July 4, 2025 (Public Law 119-21). It ended the 30% 25D credit for solar, batteries and geothermal and the 25C heat pump credit for anything installed after December 31, 2025. It did not repeal the IRA HOMES and HEAR rebates. See what is left in 2026.
P
- Payback period
- The time it takes for cumulative energy savings to equal the net cost of a system. With no federal credit for 2026 installs, solar paybacks commonly run 10–15 years (6–8 in Hawaii); estimate yours with the payback calculator.
R
- Reversing valve
- The component that lets a heat pump switch between heating and cooling by reversing the direction of refrigerant flow. Its switching can cause a normal soft 'clunk'; see our noise guide.
S
- Section 48E
- The commercial Clean Electricity Investment Credit. Homeowners cannot claim it, but the company that owns a leased or PPA solar system can, if construction begins by July 4, 2026 or the system is placed in service by the end of 2027. Some pass part of that value to customers as a lower lease or PPA rate. Compare options in our lease vs buy calculator.
- SEER2 / SEER
- Seasonal Energy Efficiency Ratio (updated to SEER2 in 2023) — a heat pump or AC's seasonal cooling efficiency. Higher is better; aim for 16+ for high-efficiency. See SEER2 vs HSPF2.
- Short-cycling
- When a system rapidly turns on and off, usually because it's oversized. It wastes energy, worsens comfort and shortens equipment life — a key reason not to oversize a heat pump.
- SREC
- Solar Renewable Energy Certificate — a tradable credit earned per megawatt-hour of solar generated, sold in certain state markets for extra income. See our SREC guide.
T
- Ton (cooling)
- A unit of heat pump/AC capacity equal to 12,000 BTU/h. A typical home needs 2–5 tons depending on size and climate; see the size calculator.
V
- Variable-speed compressor
- See Inverter (HVAC). A compressor that modulates output for efficiency, comfort and quiet operation.