Federal solar credit ended Dec 31, 2025
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Glossary

Capacity factor

Updated

Actual output over a year divided by what the system would make running at full power all year.

Capacity factor compares the energy a power system actually produces over a period with the energy it would produce if it ran at its full rated capacity the whole time. For rooftop solar it is limited by night, weather, sun angle and system losses, so it is far below that of a power plant that can run around the clock. It is a convenient way to compare locations: a sunnier location has a higher capacity factor and produces more kilowatt-hours per kilowatt installed. PVWatts reports a capacity factor with every estimate. For household decisions, production per kilowatt per year is easier to use, and it carries the same information.