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

9 Replies to “What is capacity factor and how do solar and wind energy compare?”

  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 is all 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.

  4. In my opinion solar energy is very reasnable and I have installed one in my home from Solar Tech Elec LLC.It was very cost effective and they will install it for us

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