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Content displaying: CAPEX Definition

Annual Technology Baseline 2017

National Renewable Energy Laboratory

Recommended Citation:
NREL (National Renewable Energy Laboratory). 2017. 2017 Annual Technology Baseline. Golden, CO: National Renewable Energy Laboratory.

Please consult Guidelines for Using ATB Data:

Residential PV Systems

CAPEX Definition

Capital expenditures (CAPEX) are expenditures required to achieve commercial operation in a given year. For residential PV, this is modeled for a host-owned business model only.

For the ATB - and based on EIA (2016a) and the NREL Solar-PV Cost Model (Fu et al. 2016) - the distributed residential solar PV plant envelope is defined to include:

  • Hardware
    • Module supply
    • Power electronics, including inverters
    • Racking
    • Foundation
    • AC and DC wiring materials and installation
  • Balance of system (BOS)
    • Site and/or roof preparation
    • Permitting, inspection, and interconnection costs
    • 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
    • Owner's costs, such as development costs, legal fees, insurance costs.

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 are not included in the ATB (CapRegMult = 1). Because distributed PV plants are located directly at the end use, there are no grid connection costs (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 distributed residential/commercial PV plant and does not vary with resource. Regional cost effects associated with labor rates, material costs, and other regional effects as defined by EIA (2016a) expand the range of CAPEX. Unique land-based spur line costs based on distance and transmission line costs are not estimated. 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.

chart: CAPEX definition for residential solar in the ATB

Standard Scenarios Model Results

ATB CAPEX, O&M, and capacity factor assumptions for the Base Year and future projections through 2050 for High, Mid, and Low projections 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 dGen does include 134 regional multipliers (EIA 2016a).


EIA (U.S. Energy Information Administration). 2016a. Capital Cost Estimates for Utility Scale Electricity Generating Plants. Washington, D.C.: U.S. Department of Energy. November 2016.

Fu, Ran, Donald Chung, Travis Lowder, David Feldman, Kristen Ardani, and Robert Margolis. 2016. U.S. Photovoltaic (PV) Prices and Cost Breakdowns: Q1 2016 Benchmarks for Residential, Commercial, and Utility-Scale Systems. Golden, CO: National Renewable Energy Laboratory. NREL/PR-6A20-67142. September 2016.