A newly developed cost model for tidal stream turbines is presented. The model is based on (a) an existing tidal stream turbine cost model, (b) published CapEx data from an operational tidal stream turbine array, and (c) wind turbine cost data. The new cost model is utilised to establish cost-effective tidal stream turbine design, with the aim of reducing cost of energy through appropriate sizing of turbine rated power and rotor diameter for a given resource. A validated hydrodynamic model is used to estimate turbine energy yield at locations in Ramsey Sound, allowing cost of energy to be quantified. Drivers for cost reduction are identified and quantified. It is shown that optimal turbine placement and sizing can reduce turbine CapEx per unit energy by up to 40% on previously considered locations. The cost of ballast for gravity based foundations is also considered. Initial results show that through appropriate quantification of the effective friction between the gravity based structure and the seabed, the total gravity based structure cost can be reduced by up to 18%. Finally, we demonstrate how vessel costs can be reduced at relatively low flow sites such as Ramsey Sound as a result of longer duration slack tide periods.