Overnight cost is an estimate of the cost at which a power plant could be constructed assuming that the entire process from planning through completion cold be accomplished in a single day. This concept is useful to avoid any impact of financing issues and assumptions on estimated costs. Once one has overnight costs, a complete modeling should explicitly take account of the time required to bring each generation technology online and the costs of financing construction in the period before a plant becomes operational.

When one does the economics based on overnight costs, in order to properly compare the different technologies, it is worthwhile taking a generic facility of a specific size and configuration and assuming a location without unusual constraints or infrastructure needs.

It is also important to use common boundaries for costing, as using different practices regarding the inclusion or exclusion of various components of costs can have a large impact on overall cost estimates.