Yes, PVWatts don't consider a standalone controller loss. I noticed some changes from several months ago, don't remember what their defaults were back then. Anyway, if you discount 10% loss of their inverter and add 5% of your controller, you're down to 1.05 DC/AC conversion. They include "most"of other system losses, like panel soiling and wires. They also include temperature effect.
Nice calculator overall. I used it to estimate my system before building it, and it didn't let me down, solar harvest is what I expected to be.
