It should be based on the capacity of the panels, ie. # of panels x watts/panel . Then convert to kW. The inverter is commonly undersized to save money and becasue the panels very rarely operate at peak capacity.

I'm not sure, the website says:

• The total system peak power capacity must be equal to or greater than 1.0 kW DC.

I suppose if the panels were 5kW but the inverter was only 4kW it would be hard to argue for the 5kW. That's a good question for your SO, or the CACEA technical committee.

You can  send me an email manager@cacea.ca and I will add to the next agenda (will be in September).

Submit the details in the email and the question or what needs clairification.  I will copy the conversation in this email if I can.