EXHIBIT 16




August 7, 2007



Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549


Gentlemen:

We have  read  Item 4.01 of Form  8-K/A,  Amendment  No. 2 to the Form 8-K dated
February 5, 2007, of ATEL Capital  Equipment Fund VII, L.P. and are in agreement
with the  statements  contained in the first five  sentences of paragraph 2, and
paragraphs  4 and 5 therein.  We have no basis to agree or  disagree  with other
statements of the registrant contained therein.

Regarding  the  registrant's  statement  concerning  its material  weaknesses in
internal  control over financial  reporting,  included in the fifth paragraph of
the Form  8-K/A,  we had  considered  such  matters in  determining  the nature,
timing, and extent of procedures performed in our audit of the registrant's 2005
financial statements.



                                     /s/ Ernst & Young LLP