Capacity factor

What does Capacity factor mean?

Capacity factor is the electricity a plant actually produces in a period divided by what it would produce running at its full rated (nameplate) capacity for every hour of that period. Example: a 100 MW solar farm could produce 100 x 8,760 hours = 876,000 MWh a year; if it produces 219,000 MWh, its capacity factor is 25 percent. Solar and wind depend on the sun and wind, so their factors are lower; US Energy Information Administration data show nuclear plants running above 90 percent. Capacity factor drives revenue per MW installed, which is why the same solar panel earns more in a sunny desert than in northern Europe.