What is a Capacitor? A capacitor is a passive two-terminal electrical component that stores electrical energy in an electric field. The effect of a capacitor is known as capacitance. While capacitance exists between any two electrical conductors of a circuit in sufficiently close proximity, a capacitor is specifically designed to provide and enhance this effect for a variety of practical applications by consideration of size, shape, and positioning of closely spaced conductors, and the intervening dielectric material. A capacitor was therefore historically first known as an electric condenser.