The capacity factor is a measure of how effectively a power plant operates compared to its maximum potential output. It is calculated by dividing the actual energy produced by the plant over a specific period by the energy it could have produced if it had operated at full capacity during that time. A higher capacity factor indicates more efficient use of the plant's resources. For example, a wind turbine with a maximum capacity of 2 megawatts that produces 1 megawatt of energy over a year has a capacity factor of 50%. This metric is important for understanding the reliability and efficiency of different energy sources, such as solar energy or nuclear power.