Energy Terms Defined & Renewable Energy Glossary

Kilowatts, and RECs, and British thermal units, oh my! If all the energy terms floating around out there leave your head spinning, you’re not alone. Whether you’re looking for more information regarding renewable energy terms, general utility phrases, tongue-twisting acronyms, or any other words about energy, you’ve come to the right place. Have you found yourself wondering things like, “What is a kilowatt-hour?” or “What’s the difference between renewable energy, clean energy, sustainable energy, and green energy?” or “What are Time-of-Use Rates?”

If so, we at Inspire have you covered. We understand the world of energy terms can be a bit overwhelming, so we created this energy glossary as a one-stop for all your energy term needs. 

Clean Energy Terms

• What is Clean Energy?

Clean energy, which is sometimes referred to as renewable energy, is energy derived from zero-emissions sources, meaning they do not release pollutants into the atmosphere when used. Some examples of clean energy sources include solar, wind, hydropower, and geothermal energy. These sources are all renewable, so they will never run out. Think of it this way: clean energy = clean air. 

• What is Clean Natural Gas?

Traditional natural gas is a fossil fuel normally delivered to your home via a pipeline. When it’s burned, it releases carbon dioxide and methane into the atmosphere, contributing to climate change. Clean natural gas is a “cleaner” option because the carbon emitted from your home’s natural gas usage is neutralized thanks to nature-based carbon offsets (like reforestation) that reduce overall carbon levels in the atmosphere. 

• What is Liquefied Natural Gas (LNG)?

Liquefied natural gas (LNG) is a form of natural gas that has been cooled drastically (to approximately -260 degrees Fahrenheit!) to transform it from a gaseous state to a liquid state. This process reduces its volume by 600 percent, making it easier to transport and store. While it is a fossil fuel, it produces less carbon dioxide than other types of fossil fuels, such as coal and oil, making it the cleanest fossil fuel option.

• What is Property Assessed Clean Energy (PACE)?

Property Assessed Clean Energy (PACE) financing is a U.S.-based program that helps owners of residential or commercial properties finance energy-efficient upgrades, such as water conservation measures, disaster-resiliency improvements, or renewable energy installations. 

Renewable Energy Terms

• What is Biofuel?

Biofuel is a fuel derived from biomass, such as plants, algae material, or animal waste. Unlike fossil fuels—like petroleum, coal, and natural gas—biomass is easily renewed, making biofuel a source of renewable energy.

• What is Biomass?

Biomass is renewable organic material (derived from plants and animals) that can be burned directly to generate heat or produce electricity. It can also be converted to liquid or gaseous forms to produce electricity. Examples of biomass include firewood, wood pellets, animal manure, food waste, and more. 

• What is Green Energy?

Green energy is energy that is derived from natural resources provided to us by the Earth, such as the sun, wind, and water. When used to produce green energy, these natural, renewable resources don’t release harmful greenhouse gases into the atmosphere, meaning they have little to no impact on the environment. Think of it this way: Green energy comes from natural sources. 

• What is Renewable Electricity?

Renewable electricity is electricity generated using renewable energy sources that are self-replenishing and have a low- or zero-carbon footprint, such as wind, solar, geothermal, marine, hydropower, biomass, and biogases. 

• What is Renewable Energy?

Renewable energy is energy that is created by natural resources that can quickly restore or replenish themselves on their own (renewable resources). Types of natural resources used to generate renewable energy include energy from the sun, wind, water, and even organic plant material. Think of it this way: Renewable energy comes from sources that can be replenished. 

• What are Renewable Resources?

Renewable resources are natural resources—such as solar, wind, hydro, biomass, and geothermal energy—that are automatically replenished over time despite human consumption. 

Sustainable Energy Terms

• What is a Carbon Offset?

A carbon offset is a credit that represents 1 metric ton of CO2 emissions avoided, captured, or removed from the atmosphere. Carbon offsets are key to funding a variety of emissions reduction projects, including reforestation and emissions capture. 

• What is Community-Based Energy Development (C-BED)?

Community-Based Energy Development (C-BED) aims to maximize the economic benefits of renewable energy for local, regional, and state economic development by ensuring new generation is owned by members of the local community. C-BED initiatives are owned by farmers, neighborhood businesses, community organizations, schools, and local citizens, which contributes to the long-term economic health of the community. 

• What is Geothermal Energy?

Geothermal energy, which is a renewable resource, is heat that’s continually generated in the Earth’s crust. Once harnessed, it can be used in a variety of ways: to heat or cool buildings via geothermal heat pumps, generate electricity through geothermal power plants, or directly heat homes near hot springs or geothermal reservoirs with the aid of heat exchangers. 

• What is Hydro Energy?

Hydro energy (or hydropower) is a type of renewable energy that uses the force of moving water (from rivers, streams, and lakes) to produce electricity. Hydropower plants utilize turbines built into dams to capture kinetic energy from the currents in bodies of freshwater and convert it to electricity. Once generated, hydro energy can be used immediately, connected to the electrical grid, or stored for future use. 

• What is a Nature-based Solution (NbS)?

Nature-based solutions (NbS) are actions taken to protect, sustainably manage, and restore natural or modified ecosystems. They also address societal challenges and provide human well-being and biodiversity benefits. Examples of nature-based solutions include protecting and managing ecosystems and restoring damaged ecosystems.

• What is a Power Purchase Agreement (PPA)?

A Power Purchase Agreement (PPA) is a long-term renewable energy contract that allows a third-party developer to install, own, and run an energy system on a customer’s property. For a specified time, the consumer purchases the system’s electric output. PPAs allow customers to obtain reliable, affordable electricity while the owner of the system benefits from tax credits and can make a profit by reselling the electricity produced. 

• What is a Renewable Energy Certificate (REC)?

A Renewable Energy Certificate (more commonly known as a REC), tracks energy generated from renewables. When one megawatt (MWh) of renewable energy is generated, one REC is created to track it, ensuring it is accounted for when added to the grid. RECs reduce emissions by supporting renewable energy generation on the grid and represent all types of renewable energy, including wind, solar, and hydropower. 

• What is Solar Energy?

Solar energy (or solar power) is energy generated by the sun that is transformed into thermal or electrical energy. As the sun is a sustainable and inexhaustible natural resource, solar energy is touted as being the cleanest and most abundant renewable energy source available. To harness the sun’s energy, solar panels use silicone sheets with energy-absorbing cells to convert sunlight into electricity for commercial or industrial use. Once the solar energy is generated, it can be used immediately, connected to the electrical grid, or stored in batteries for future use. 

• What is Sustainable Energy?

Sustainable energy is produced using resources that can meet our current energy demands without compromising the needs of future generations—and without harming the environment. Popular sources of sustainable energy are renewable and include geothermal, hydropower, solar, and wind. 

• What is Wind Energy?

Wind energy (or wind power) is a free, clean, and inexhaustible renewable energy source. To create electricity, wind turbines channel the power of the wind to generate kinetic energy. Harnessing wind energy doesn’t require much labor, and it’s also an environmentally friendly resource. Once generated, wind energy can be used immediately, connected to the electrical grid, or stored for future use.

Dirty Energy Terms

• What are Fossil Fuels?

Fossil fuels are non-renewable energy sources found in the Earth’s crust. They are made of once-living organisms—such as plants and animals that lived millions of years ago—and can be burned for energy due to their high carbon content. Common fossil fuels include oil, coal, natural gas, and petroleum. When fossil fuels are burned to heat homes, power vehicles, and produce electricity, they release large amounts of greenhouse gases into the atmosphere, which contributes to global warming. 

• What are Greenhouse Gases?

Greenhouse gases (such as carbon dioxide, water vapor, methane, nitrous oxide, and ozone) are essential to life on Earth, as they trap the sun’s heat (like a blanket), making the planet warm enough for organisms to survive. Without their help, the average temperature of the planet would be an icy 0 degrees Fahrenheit. But there is such a thing as too much of a good thing. Over the last 150 years, humans have increased the amount of greenhouse gases in the atmosphere—primarily by burning fossil fuels for things like transportation, electricity, and heat—which has resulted in an even thicker blanket that traps too much heat, causing the global average surface temperature to rise. 

• What is Non-renewable Energy?

Non-renewable energy is created using natural resources that we only have access to in limited amounts. These finite resources can’t restore or renew themselves on their own. Non-renewable energy often comes from sources like oil, coal, and gas. When used to generate electricity, the types of resources used to create non-renewable energy also emit harmful emissions into our atmosphere, contributing to climate change. 

Energy Industry Terms

• What is a British Thermal Unit (Btu)?

British thermal units (Btus) are used to measure the amount of heat in fuels or energy sources. One Btu (which is roughly equivalent to the energy generated from a single match) represents the amount of heat required to raise the temperature of 1 pound of water by 1 degree Fahrenheit. 

• What is a Fixed Rate?

When it comes to energy plans, a fixed rate means the cost per kilowatt-hour (kWh) remains the same during the course of your contract. Even if there are market fluctuations, the rate you pay for your energy is locked in, which makes it easier to budget for your monthly energy expenses. 

• What is Distributed Generation (DG)?

Distributed generation (DG) refers to electricity that’s generated at or near the location where it will be utilized—rather than at centralized sources, such as traditional power plants, which must transmit energy long distances via the grid. Distributed generation is often composed of renewable energy sources, including solar panels, wind turbines, and hydropower. 

• What is a Kilowatt (kW)?

A kilowatt (kW) is a unit of power that’s equal to 1,000 watts. It can be used to measure the amount of power consumed by the appliances and devices in your home. 

• What is a Kilowatt-Hour (kWh)?

A kilowatt-hour (kWh) measures the amount of energy used by a one-kilowatt (kW) appliance for one hour. Whereas a kilowatt (kW) measures energy usage at a particular point in time, a kilowatt-hour (kWh) refers to energy use over a specific time period—an hour. 

• What is Peak Demand?

Peak demand refers to the time when electricity consumption is at its highest. This could be daily (when most people are home from work), seasonally (when extra heating or air-conditioning is required), or even yearly. Electricity prices increase when demand is at its highest, so the cost of electricity during peak demand rises in response. 

• What are Time-of-Use Rates (TOU)?

Time-of-Use rates are based on the quantity and timing of your energy use. TOU plans modify the cost of your electricity depending on when (time of day, week, or season) you use it. As the price of consuming electricity increases during peak energy demand periods, it’s possible to reduce your bill and contribute to a healthier environment by scheduling some of your electricity usage for times when costs and demand are lower.