What is solar energy accounting?

What standards does Denowatts follow for solar energy performance accounting and reporting?


Energy accounting, just like financial accounting, is a critical part of operating a business. In financial accounting, Generally Accepted Accounting Principles (GAAP) guide how transactions are recorded and statements are prepared. Every business uses GAAP so management, shareholders, and outside organizations can clearly communicate financial results.

But is there an internationally recognized standard for reporting solar energy production? Yes.

IEC 61724-3 (2016) “Photovoltaic System Performance- Part 3: Energy Evaluation Method” is the standard that details solar energy accounting and reporting. The IEC 61724-series has three parts that detail monitoring, capacity testing, and energy reporting principles for solar assets. This series defines benchmarking metrics and key performance indices that can apply to any solar array, including recent updates for bifacial solar modules.

The benefit to organizations following this standard is growing clearer every year: Portfolio value. When asset managers, owners, operators, independent engineers, and financiers all follow the same standards, reporting uncertainty is reduced, management efficiency is gained, and smarter decisions grow the bottom line.

Throughout the Denowatts portal we utilize performance metrics and KPIs that are defined under the IEC 61724-series standards. The math and full context are defined in the IEC 61724 series standards, and are summarized below for your quick reference:

Summary of Metrics

Model Irradiation

The P50 Typical Meteorological Year (TMY) amount of Effective Plane of Array (POA) Irradiation


The measured POA Irradiation measured by the Deno sensor.  Includes direct, diffuse, and reflective irradiation

Predicted Energy

The P50 Predicted Energy modeled for the period using historical weather data sets

Expected In Service Energy

The weather adjusted energy expected by the model during non-outage operating periods

Expected Unavailable Energy

The weather adjusted energy that was lost during outage periods

Expected Energy

The sum of In Service and Unavailable Expected Energy

Measured Generation

Measured Net Energy Generation as reported by your monitoring company

Summary of Key Performance Indices (KPIs)

Energy Performance Index (EPI)

The Measured Generation divided by the Expected Energy

In-Service EPI

The Measured Generation divided by the In Service Expected Energy (non-outage)

Energy Availability

The EPI divided by In Service EPI

Capacity Factor

Measured Energy divided by DC capacity and 8760 hours in the year

Performance Ratio

The ratio of Effective Plane of Array (POA)  Irradiation that is converted to Grid Energy


IEC TS 61724-3:2016 Section 3: Terms and definitions

IEC 61724-1:2020 Section 10 Performance Metrics