What is capacity factor and how do solar and wind energy compare?

Types_of_Energy_GenerationOne of the most confusing aspects of renewable energy is the difference between installed (nameplate) capacity and the actual output that is obtained from these systems. It is dead simple to determine the installed capacity. For example, if we install 10 solar panels rated at 250 watts each, we will have a capacity of 2500 watts, or 2.5 kW. However, determining the actual output from these panels is much more challenging (this is one of the reasons why we developed Sunmetrix Discover: to help you with the output estimates). The capacity factor is simply the ratio of energy generated over a time period (typically a year) divided by the installed capacity.

To illustrate how location impacts capacity factor, consider a 10 kW system installed in Phoenix (AZ) vs. Seattle (WA). With a Solar Score of 84, Phoenix has a very high solar energy potential. Using Sunmetrix Discover for Phoenix, we can see that this system would generate about 20,500 kWh of electricity during the year. If it were to run non-stop, 24/7 at peak capacity of 10 kW, it would have generated 24 x 365 x 10 = 87,600 kWh. Dividing 20,500 by 87,600 gives us a capacity factor of  about 23%. With a Solar Score of 43, Seattle is an entirely different story. Here, a 10 kW system would generate about 14,000 kWh during the year. Consequently, the capacity factor of the solar energy system here is much lower than that of Phoenix at about 16%.

As we have seen, the capacity factor varies quite a bit for solar photovoltaic systems depending on the location. Generally, it is in the range of 10-25%. One of the key reasons for this low ratio is the nature of renewable power. After all, when it comes to solar, wind and hydro, we are at the mercy of the nature. If there is no wind at a given moment, a wind turbine will sit idle. If there is no rain or snow to fill the reservoirs, a hydroelectric plant cannot generate power. Compared to wind and hydro, solar energy has an additional limitation: there is absolutely no energy production during night time (which corresponds to a big chuck of hours available in a year). Fortunately, solar energy has many distinct advantages such as easy maintenance, long lifetime and decreasing prices that still make it the renewable energy of choice for households. We explore in great detail the question: is investing in solar panels is worth it?

So how does solar energy compare to other forms of energy generation? As we summarized in the table below, the picture isn’t very pretty.

Generation TypeCapacity Factor
Solar Panels10-25%
Wind Turbines25%
Hydroelectric Power Stations40%
Coal Fired Power Plants70%
Nuclear Power Plants89%
Combined Cycle Gas Turbine38%

It is no wonder that with a capacity factor of about 90%, nuclear power continues to constitute the backbone of many electricity grids. Other forms of renewable energy, such as wind and hydro, are also trailing behind fossil fuels and nuclear power when it comes to capacity factor.

Yes, it is a fact that the capacity factor of solar energy is one of the lowest when compared to all other forms of power generation. However, as we often state, rather than ignoring the drawbacks of solar energy, we should focus on them with great enthusiasm. By truly understanding the limitations of solar energy, we can identify the bottlenecks and concentrate our R&D efforts accordingly. By accepting what we cannot change (such as zero production during the night), we can better plan our energy grids and capitalize on the strengths of different types of energy generation.

If you are curious about the capacity factor of solar energy at own site, you can learn it with a few clicks using Sunmetrix Discover.

Data source for the table: Average Capacity Factors by Energy Source, 1998 through 2009, U.S. Energy Information Administration, April 2011.

Image source: bplanet/Freedigitalphotos.net
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22 Replies to “What is capacity factor and how do solar and wind energy compare?”

    1. Thanks for these figures. I suppose 12% is an average figure for Europe, with a lot of variation in different parts of the continent. You can consult Sunmetrix Discover for a more specific analysis.

  1. The capacity factor for both on and off shore wind in Germny in 2015 was ~15%. I mean, really. Would you even consider buying a car that worked 15% of the time?

    1. The average reciprocal engine vehicle is capped at less than 40% efficiency due to heat, friction, vibration and noise losses. Fossil fuel sources are finite and emit greenhouse gases.

  2. If you do full tracking for solar in the southwest USA or southern spain you should get a 30% capacity factor. Fixed tilt, a rainy climate and the high latitudes of europe are killers for solar. Desert solar and low cost storage (lithium ion is below 200 a kwh and charge cycles total about 5000 in the powerwall if you stay away from full cycle drains) you can easily do solar for baseload at a reasonable cost.

  3. I can’t believe you wrote “The capacity factor is simply the ratio of actual power generation over a time period (typically a year) divided by the installed capacity.” It’s not the POWER (kW) you want but the ENERGY (kWh). You are trying to help people understand basic concepts but you are confusing the basic concepts of power and energy yourself!!

    1. Hi Sarah,

      Thank you for your comment. Indeed, capacity factor is about the relationship between installed power capacity and the energy generated over time. That’s precisely why we used the term “actual power generation over a time period” to denote energy, but it seems like this may cause some confusion. We changed the text to clarify the explanation.

    2. Yes, for proper comparison we need to know the difference between power, the rate that energy is being produced, and total energy produced. Capacity factor can be calculated for total energy as these numbers are. You can also look at capacity factor as it relates to the power. For example, what is the power at any given time as compared to the nameplate. This is not a single number but would be different at the times that you measure it. Without storage or an electric utility backing you up, this is the power limitation imposed on your use of energy. This number is the number that matter to the consumers. The intermittency of solar is the real challenge not the nameplate power or the capacity factor as a whole. If we don’t realize that the electric utility is backing up most people’s solar installation we miss the real limitations. Currently the easiest way to backup renewables is with natural gas fired turbines. The must be ramped up and down to smooth out the intermittency of renewables. The current reality is that without storage or utility backup, renewables don’t work for a society like ours that relies on consistent delivery of electricity whenever we want it. They may actually use more fossil fuels as we run the backup systems.

  4. Hywind Scotland with five wind turbines (floating in sea) each 6 MW obtained 65% capacity factor during November an December 2017 and January 2018. GE plans to launch a 12 MW turbine with cf of 65%!

    Cheap solar cells with efficiency of 50% soon come (I hope!). Though that would not change cf, but price would be halved!

    1. Sorry, Ketill, you don’t understand.
      The capacity factor is the ratio of actual power generated per year divided by (peak installed capacity * one year). For solar, the sun is down 50% of the time, and low on the horizon or obscured by clouds for a large fraction of daylight hours, so the capacity factor of 10-25% will not change as solar cells improve. Technical improvements will reduce the cost of panels, and may increase the % of light energy hitting the cell that is converted to electricity, which is the cell’s efficiency. Capacity factor and efficiency are quite different things.

  5. You didn’t include geothermal energy in your discussion of capacity factor. Our geothermal plants have a very high availability (% of time plant is on line generating) of about 99%. We have pretty high parasitic load for some plants (energy from the plant used to run auxiliary systems like well pump and injection pumps) so that decreases our capacity factor quite a bit. Typically we use about 20% of the gross output of the generator for this type of auxiliary load. So for our 40 MW geothermal power plant that has pumped wells the capacity factor runs around 80%. Steam power plants from hotter geothermal resources don’t use well pumps so they have much lower auxiliary loads. Our 60 MW steam geothermal plant has a capacity factor of 88.2%. The geothermal resource, though is available all the time, 24/7 and is very reliable.

  6. Will the people that have installed solar systems please publish actual numbers. How much did the system cost. How much does it produce over a long period of time. What are the maintenance costs. Just saying it is reasonable, or very efficient, or cost effective does not help with what this article is trying to point out.

    1. Your local installers are your best resource. Almost every single system will have a different cost per KWh produced depending on the roof angles, and what subsidies are available, and payback will depend on what feed-in price you get and what power price you pay, interest rates, etc.

      These factors are different everywhere, but what you can find out with a little digging:
      – The average annual solar resource in your area. We get about 1200 KWh per watt of solar PV here. In Arizona or Hawaii you’ll get more. In the Yukon you’ll get less. Everywhere’s different.
      – how much electricity you use, from your old power bills. We charge electric cars, which take more power in an average month than our house. We might run an air conditioner for a few hours a day, on about 20 days a year. Our thermostat is switched to ‘heat’ from mid-September to mid-May. Everywhere’s different.
      – How much the utility will pay you for solar power. This might be the total amount you pay, the electricity plus delivery, or just the electricity. Everywhere’s different.
      – How much the utility will charge you for power the rest of the day. We happen to pay an ‘average’ pool price, which includes daytime spikes, set once a month, for the month, plus transmission + distribution + a day rate. Different for every utility, for each district, in each municipality.
      – What interest rate you would have to pay for financing. Going to be different for everyone, but I’ve seen financing at 3% from solar vendors, and mortgage financing at about 2%. At 4%, you would break even on buying a $20,000 system that saves you $1,000 a year. More if the price of power goes up, a tiny bit less as the panels age, and if cold fusion is invented and power becomes almost free, you might not save as much.

      Our system pays back about 7.5% in savings annually. Our summer power bills are basically zero because we use only 1/3 of the power from the panels, and our winter bills are a bit lower than they used to be, because 200 KWh for December isn’t very much but it’s more than nothing. By running appliances mostly during the time the solar is producing, we save a bit more than just randomly running laundry anytime, or running the dishwasher at night. And of course with or without solar, we save by swapping out everything for LED lighting driving as little as possible.

      Maintenance cost so far has been zero. We let rain and snow clean the panels, rather than wash them with our hard water. And I don’t try to remove snow and ice, it’s either going to melt off, or it’s not worth trying to chip it off because not enough sun anyway.

      I hope that helps, please post back

  7. You want to find out what a solar PV system could potentially produce in your area? Then use the NREL PV Watts calculator here: https://pvwatts.nrel.gov/pvwatts.php My 12.8 kWp DC system, limited to 10kW AC, became operational April 1, 2020. So far it has tracked within a few % of the PV Watts calculator predictions. To find out how a PV system could perform at your exact location with unobstructed access to sunlight, just enter a small amount of data into the PV Watts calculator. Below is a summary of the information for my PV system.

    Latitude: 40.97°, Longitude: 89.54° W
    DC System Size: 12.8 kW
    Module Type: Premium
    Array Type: Fixed (open rack)
    Array Tilt: 30°
    Array Azimuth: 180°
    System Losses: 14.08%
    Inverter Efficiency: 96%
    DC to AC Size Ratio: 1.28
    Average Retail Electricity Rate: 0.091 $/kWh
    Capacity Factor: 16.1%
    (System output may range from 16,818 to 18,345 kWh per year near this location.)

    Based on the above information, my system is predicted to produce 16,818 to 18,345 kWh/Year. It has produced 13,360 kWh as of the end of December, 2020. This leaves 3,458 kWh to 4,985 kWh to be produced in the next three months to reach the predicted 16,818 to 18,345 kWh/Year. The PV Watts calculator predicts that the system will produce 3,787 kWh in the next three months, which would reach 17,147 kWh for the full year.

    This shows that the new system is producing within the expected range, but it is under producing by nearly 1,000 kWh. Part of this under production was because four of the 40 PV panels had been defective for about two months before being replaced. And part of the reduced output was because of unanticipated reduction in solar radiation due to atmospheric smoke from the western states during the summer months.

  8. Thanks for the valuable information. I have installed Solar in my home. But I want to change the module now, can you please suggest which module should, I used for better efficiency. Please help me out – thanks

  9. Will the people that have installed solar systems please publish actual numbers. How much did the system cost. How much does it produce over a long period of time. What are the maintenance costs. Just saying it is reasonable, or very efficient, or cost effective does not help with what this article is trying to point out.

  10. The capacity factors for the various thermal and hydro plants appear to be skewed by renewables. When wind or solar enter the grid, some other source must be kept in warm standby to pick up the load when the renewables drop off, wind stops, sun goes down, etc. Natural gas and hydro, being the easiest to turn down and ramp back up, carry the bulk of the planned inefficiency to cover wind and solar. In fact, most hydro or gas plants can operate at a 90% plus capacity factor when there is a demand for the power.

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