What Is Loss Evaluation / Capitalisation?

Published 27 Aug 2026Updated 27 Aug 20266 min readIntermediateProcurement
Quick answer — Loss evaluation (loss capitalization) converts the transformer no-load and load losses into a monetary value over the life, so bids can be compared on the total cost of ownership, not just the price. A loss-evaluation factor (in $/watt) is set for the no-load and load loss, and each unit is priced as the purchase price plus the capitalised value of its losses. A lower-loss unit can justify a higher price.
Contents
What is transformer loss evaluation?

The idea

Because the losses cost energy every year of the life, a buyer sets a value (e.g. $/kW for the no-load and load loss) and adds the capitalised loss to the purchase price for a fair comparison.

How it is used

Set the evaluation factors for the no-load and load loss (they differ), compute the loss value for each bid, and compare the total.

Why it matters

It rewards a lower-loss, higher-efficiency transformer, which often pays for itself even if the purchase price is higher.

References & standards

Related

Book seriesAcademy

Related manufacturers

Prolec GE (GE Vernova) · Prolec GE Waukesha · Hitachi Energy USA · Siemens Energy · Eaton · Virginia Transformer Corp

Related components

Conductors & core steel Transformer cooling systems
Technical content is prepared from engineering references, standards frameworks, manufacturer documentation and industry sources. Contractual or compliance decisions should refer to current official standards. TransformerPath Technical Editorial.
Source transformers for this application

Submit an RFQ or browse manufacturers and components.

Submit an RFQ Get Verified