Quick answer
Capacity factor is energy generated during a period divided by the energy that continuous operation at the stated capacity would produce during that period. It is an energy ratio, not the percentage of hours spent at full power. Specify the period, energy boundary and AC or DC capacity basis before comparing solar projects.
What is capacity factor?
The US Energy Information Administration definition compares actual electrical energy with continuous full-power generation over the same period. The distinction matters: a system can spend no hours at full output and still have a positive capacity factor.
For solar, record whether capacity means the array’s DC STC rating or the plant’s AC rating. Changing that denominator changes the result without changing the generated energy. Neither convention is self-explanatory when a report simply prints “capacity factor.”
Formula and example
Capacity factor = energy (kWh) / [capacity (kW) × hours in the period]For an illustrative 10 kW capacity basis and 15,768 kWh of annual energy in a non-leap year:
15,768 / (10 × 8,760) = 0.18 = 18%This is an arithmetic example, not an expected yield for every 10 kW solar installation. A leap-year annual calculation uses 8,784 hours. For a partial period, use the actual hours and explain how commissioning or capacity changes are handled.
AC versus DC basis
Assume the same illustrative plant has 12 kW of DC modules, a 10 kW AC capacity basis and produces 15,768 kWh during the non-leap year. The AC-based factor is 18%; the DC-based factor is 15%. The figures describe the same energy with different denominators.
When comparing projects, keep the basis consistent. Do not interpret the larger percentage as evidence that the plant became more efficient.
Capacity factor is not efficiency or availability
| Term | Question it answers |
|---|---|
| Capacity factor | How much energy was generated relative to continuous operation at the stated capacity? |
| Module efficiency | What fraction of incident power is converted under the specified conditions? |
| Availability | Was equipment available to operate according to the stated measurement method? |
| Specific yield | How much energy was produced per installed DC kWp over the period? |
Nighttime can reduce annual solar capacity factor without representing a fault. Weather, orientation, shading, losses and operational restrictions also affect energy. A single ratio cannot distinguish those causes.
What to verify in a report
Record the capacity value and basis, period dates, elapsed hours, energy boundary and whether the result is measured or simulated. Check downtime, missing records and capacity changes before comparing years.
EIA’s generation and capacity explanation describes its published utility-scale data and capacity categories. A national utility-scale fleet average should not be presented as a residential rooftop target without establishing comparability.
Use specific yield alongside this metric when comparing PV designs. The generation and financial workflow is a relevant place to evaluate how an energy assumption affects project economics; it does not establish a universal capacity-factor target.
Related Glossary Terms
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