What is Capacity Factor?

Legal Definition
The net capacity factor of a power plant is the ratio of its actual output over a period of time, to its potential output if it were possible for it to operate at full nameplate capacity continuously over the same period of time. The capacity factor is calculated by dividing the total amount of energy the plant produced during a period of time and divide by the amount of energy the plant would have produced at full capacity. Capacity factors vary greatly depending on the type of fuel that is used, the design of the plant, its location, reliability, maintenance schedule and can also be subject to regulatory constraints and market forces. The capacity factor should not be confused with the availability factor, capacity credit (firm capacity), efficiency or cost of energy.
-- Wikipedia
Legal Definition
The net capacity factor of a power plant is the ratio of the actual output of a power plant over a period of time and its output if it had operated at full nameplate capacity the entire time.