Content displaying: CAPEX Definition

Utility-Scale PV

CAPEX Definition

Capital expenditures (CAPEX) are expenditures required to achieve commercial operation in a given year.

For the ATB, and based on EIA (2016a) and the NREL Solar PV Cost Model (Fu, Feldman, and Margolis 2018), the utility-scale solar PV plant envelope is defined to include:

  • Hardware
  • Module supply
  • Power electronics, including inverters
  • Racking
  • Foundation
  • AC and DC wiring materials and installation
  • Electrical infrastructure, such as transformers, switchgear, and electrical system connecting modules to each other and to the control center
  • Balance of system (BOS)
  • Land acquisition, site preparation, installation of underground utilities, access roads, fencing, and buildings for operations and maintenance
  • Project indirect costs, including costs related to engineering, distributable labor and materials, construction management start up and commissioning, and contractor overhead costs, fees, and profit
  • Financial Costs
  • Owners' costs, such as development costs, preliminary feasibility and engineering studies, environmental studies and permitting, legal fees, insurance costs, and property taxes during construction
  • Electrical interconnection, including onsite electrical equipment (e.g., switchyard), a nominal-distance spur line (< 1 mile), and necessary upgrades at a transmission substation; distance-based spur line cost (GCC) not included in the ATB
  • Interest during construction estimated based on six-month duration accumulated 100% at half-year intervals and an 8% interest rate (ConFinFactor).

CAPEX can be determined for a plant in a specific geographic location as follows:

CAPEX = ConFinFactor × (OCC × CapRegMult + GCC)
(See the Financial Definitions tab in the ATB data spreadsheet.)

Regional cost variations and geographically specific grid connection costs are not included in the ATB (CapRegMult = 1; GCC = 0). In the ATB, the input value is overnight capital cost (OCC) and details to calculate interest during construction (ConFinFactor).

In the ATB, CAPEX represents a typical one-axis utility-scale PV plant and does not vary with resource. The difference in cost between tracking and non-tracking systems has been reduced greatly in the United States. Regional cost effects associated with labor rates, material costs, and other regional effects as defined by EIA (2016b) expand the range of CAPEX. Unique land-based spur line costs based on distance and transmission line costs for potential utility-PV plant locations expand the range of CAPEX even further. The following figure illustrates the ATB representative plant relative to the range of CAPEX including regional costs across the contiguous United States. The ATB representative plants are associated with a regional multiplier of 1.0.

R&D Only Financial Assumptions (constant background rates, no tax changes)

Standard Scenarios Model Results

ATB CAPEX, O&M, and capacity factor assumptions for the Base Year and future projections through 2050 for Constant, Mid, and Low technology cost scenarios are used to develop the NREL Standard Scenarios using the ReEDS model. See ATB and Standard Scenarios.

CAPEX in the ATB does not represent regional variants (CapRegMult) associated with labor rates, material costs, etc., but the ReEDS model does include 134 regional multipliers (EIA 2016b).

CAPEX in the ATB does not include a geographically determined spur line (GCC) from plant to transmission grid, but the ReEDS model calculates a unique value for each potential PV plant.


References are specific to this page, see all references page for all references.

EIA. (2016a). Annual Energy Outlook 2016 Early Release: Annotated Summary of Two Cases (No. AEO2016). Retrieved from U.S. Energy Information Administration website:

EIA. (2016b). Capital Cost Estimates for Utility Scale Electricity Generating Plants. Retrieved from U.S. Energy Information Administration website:

Fu, R., Feldman, D., & Margolis, R. (2018). U.S. Solar Photovoltaic System Cost Benchmark: Q1 2018.