The DC to AC size ratio is the ratio of the array's DC rated size to the inverter's AC rated size. For the default value of 1.2, a 4 kW system size would be for a 4 DC kW array at standard test conditions (STC) and 4 DC kW / 1.2 = 3.33 AC kW inverter.
For a system with a high DC to AC size ratio, for times when the array's DC power output exceeds the inverter's rated DC input power, the inverter limits the array's power output by increasing the DC operating voltage, which moves the array's operating point down its current-voltage (I-V) curve. PVWatts® models this effect by limiting the inverter\'s power output to its rated AC size. You can see that in the hourly results, by clicking the Hourly link below the table of Results on the Results page.
The default value of 1.20 is reasonable for most systems. A typical range is 1.10 to 1.25, although some large-scale systems have ratios as high as 1.50. The optimal value depends on the system's location, array orientation, and module and inverter costs.