In more detail
One peak sun hour is 1 kWh of solar energy per square metre, so a site receiving 5 kWh/m² in a day has 5 peak sun hours, however long the day is. The figure depends on latitude, season, cloud cover and the tilt and direction of the panels; sunny low-latitude regions often average 5 to 6 or more, while cloudier high-latitude places get considerably less, especially in winter. Solar maps and weather-service data give monthly averages for a location.
Why it matters
Daily output is roughly system size (kW) × peak sun hours × derate factor, where the derate (often around 0.75 to 0.85) covers inverter, temperature, wiring and dirt losses. Grid-tied systems are usually sized on the yearly average; off-grid systems need the worst month, or the batteries run flat in winter.
Example
5 kW system, 5 peak sun hours, 80 % derate: 5 × 5 × 0.8 = 20 kWh/day
Per year: 20 × 365 = 7,300 kWh → $1,095 at $0.15/kWh
$15,000 net cost / $1,095 per year = 13.7-year simple payback
Common confusion
Peak sun hours are not daylight hours: a 14-hour summer day between Sunrise and sunset may deliver only 6 peak sun hours, because morning and evening sunlight is weak. Output is measured in Kilowatt-hour (kWh).