> The solar industry will continue to tout capacity rather than actual generation because most folks don't understand the difference.
The solar industry reports capacity because the whole electrical industry uses that to size their wires, from transmission lines to the wiring in your house. Every electrical device you plug into the wall outlet has peak power draw listed in Watts or Amps. That's so you don't overload the circuit (typically 20 Amps or 2400 Watts). In the same way, transmission lines that carry power from plants to cities have a maximum capacity, and the grid operator has to know what peak power level each source can provide.
What you are calling "actual generation" is just "energy", or power x time. For a power plant, it's typically listed as "Peak capacity (MW) x capacity factor (%) x 8766 hours (in a year) = Energy output (MWh)". The capacity factor is the average output divided by the peak output. It varies from 90% for nuclear, to as low as 15% for solar in a bad location like Seattle (not recommended). Every power plant, without exception, has less than 100% capacity factor, although the reasons vary. A hydroelectric dam might theoretically run nearly all the time, since individual turbines can be shut for maintenance. But that does not account for weather. During a drought, there may not be enough water behind the dam to keep running at full power.
The job of a grid operator is to have enough power sources and transmissions lines to meet demand every minute of every day. That demand varies all the time: daytime vs night and weekends, seasonal cycles, weather variations. They prefer to use generating plants with the lowest operating costs first. So solar, wind, hydro, etc. that don't burn fuels are the preferred choice when available. They also prefer to use long-running plants like nuclear for "base load", the demand at the lowest point of the day, because they are slow to start and stop. "Dispatchable" plants (like Hydro), which can be turned on and off quickly are preferred to adjust supply to match demand as it varies. It's not as simple as "X is better than Y"
The grid operator also has to have enough reserve capacity for when something unexpected happens. A severe storm could knock out a bunch of demand (by downing distribution lines, or people are snowed in and don't go to work, thus businesses stay closed). A power plant can shut down unexpectedly, and other sources have to fill in. A heat wave or cold snap could drastically affect demand.