What is a solar farm? Costs, the necessity for land, and more

Landowners and farmers all throughout the nation are becoming more interested in solar energy.

After all, compared to conventional products like corn or soybeans, solar is being lauded as the new “dollar crop.” (To see what I mean, just Google “solar panels cash crop”).

So, if you have a lot of land, should you try to use solar energy on your property? If so, how should one start if it isn’t already? What precisely is a solar farm, how much they cost, and how to build one are all things we’ll cover.

What is a solar farm?

Large-scale, ground-mounted solar arrays are called solar farms. To harness the power of the sun, they employ photovoltaic (PV) panels or other methods of solar energy collection, such as concentrating solar systems.

Solar farms also go by the names “solar parks,” “solar plants,” and “solar power stations,” and they function as power plants in the same way as fossil-fuel powered plants have done for the past 100 years.

They differ in a number of significant ways from rooftop solar systems and even commercial solar power systems.

  • Solar farms take advantage of economies of scale, meaning, by placing large orders for solar panels and other equipment, project developers can purchase the equipment for less.
  • Solar power stations can also be located in a more ideal location that’s free from issues like shading from trees.
  • Solar farms are decentralized and usually consist of ground-mounted solar panels, installed across large areas.
  • In most cases, solar farms provide power to the electric grid and are part of the utility’s energy mix. 

Large solar projects can be of many sizes, including utility-scale and community solar farms.

Different types of solar farms: Utility solar vs community solar

Utility-scale solar farms often have a greater physical footprint than community solar farms, which is the main distinction between the two types of solar farms.

The capacity of utility-scale solar farms can range from 1 MW to 2,000 MW. On the other side, community solar farms are often smaller—around 5 MW, and it’s not unusual to find ones that are under 100 kW.

Who receives the power from the two types of solar farms is a significant additional distinction.

Community solar farm projects provide electricity to members or subscribers who have paid for a portion of it. On the other hand, utility solar farms are used by the utility company and all of its clients as a component of the energy mix it transports over its power lines.

How much does a solar farm cost?

Installation expenses for solar farms typically range from $0.89 to $1.01 per watt. Accordingly, the price of a 1 megawatt (MW) solar farm would range from $890,000 to $1,01 million.

These numbers are based on the SEIA’s Q4 2021 average national cost data. Additionally, they presume that you already own the property needed to construct the solar farm.

Rooftop solar systems are more expensive to install and maintain than solar farms. Residential solar panel systems, which are typically under 20 kW, cost $3.06 per watt, according to SEIA statistics.

In other words, the price per watt for a solar farm is far lower than the price of installing solar energy for homes.

In order to increase their capacity for power generation, utilities are increasingly turning to solar farms due to their low cost. In addition to being one of the most affordable sources of renewable energy, solar power is now equally affordable to sources of electricity derived from fossil fuels.

Starting a solar farm – key points to consider

Here are the top questions asked by those interested in starting a solar farm on their property: 

How much land does a solar farm need?

According to GTM Research, a 1 MW solar farm typically requires 6–8 acres to accommodate all the necessary infrastructure and space between panel rows. Be aware that you require more area for huge solar installations than just the solar arrays themselves. Additionally, land is needed to house auxiliary devices like inverters, and room must be provided between solar panel rows to allow for access for repairs and maintenance.

How long does it take to build a solar farm?

Construction of a solar farm can be finished in a few months, depending on the scale of the project and the amount of people working on it. However, sitting and permitting are far more difficult. To complete all the necessary contracts and approvals for a solar farm, it can take three to five years. Once built and operational, a solar farm requires little upkeep and only needs to be repaired three to four times each year.

How much money can you make with a solar farm?

Selling the electricity from a 1 MW solar farm can bring in roughly $40,000 per year in revenue. Here is a description of how solar farms make money. Utility-scale solar farms exchange Purchase-Power Agreements for the sale of the electricity they generate on the wholesale electricity market. Electricity marketplaces like LevelTen Energy can be used for this. Solar energy traded at a price of $29.75 per MWh in Q4 2021, according to LevelTen Energy’s P25 national index. The P25 index, which represents the 25% of PPAs that traded for less than this while 75% traded for more, is a fairly conservative estimate. We know that the typical 1 MW solar farm would produce 1,460 MWh per year based on the national average of four peak sun hours each day. As a result, the typical 1 MW solar farm can anticipate yearly revenues of about $43,500. Of course, they are simply average numbers. Based on variables like local solar power production and the going rate for solar energy in the wholesale market, your actual revenue may differ dramatically from these estimates. Additionally, keep in mind that PPA values vary greatly depending on the wholesale electricity costs in your Regional Transmission Organization region.

How much do solar farm leases pay?

According to the biggest solar land lease websites, landowners who rent out their property for a solar farm can make between $250 and $3,000 per acre a year.

This is a choice for those who would rather lend their property to a third-party solar developer than construct their own solar farm.

You might be asking why the range of leasing fees is so wide. It’s because there are numerous variables dependent on your location that might impact the going rate for a land lease, some of which are as follows:

  • Land prices in your area
  • Electricity transmission infrastructure near your land
  • Substitute uses of your land (i.e. possible agricultural farm income)
  • Demand for renewable energy in your state
  • State and municipal incentives to solar farm operators

The average length of an agreement is between 15 and 20 years, with potential for extensions of up to 50 years. In order to adjust for inflation, they additionally offer annual escalators of 1.5 to 2.5%.

Some developers even offer to make a sizable advance payment to cover the lease costs.

What are the largest solar farms?

Solar farms are currently having a good time in the sun, no pun intended. Thanks to the increased economics of solar energy generation and the ambition of governments to transition to renewable energy to prevent climate change, the solar industry is constructing ever-larger solar farms.

The biggest solar farm in the United States 

The largest solar farm in the US at the moment is the Copper Mountain Solar project in Eldorado Valley, Nevada. 816 MW is the total installed capacity.

It began as an 86MW project in 2010 and has subsequently undergone four more expansions. The newest expansion, a 250 MW unit that began operating in March 2021, assisted Copper Mountain in surpassing the California-based Solar Star project as the nation’s largest solar installation.

Mammoth Solar Farm – set to be the biggest in the US 

In northern Indiana, a $1.5 billion project called Mammoth Solar is now being built. It will be twice as large as the largest solar farm in the US at the time it is finished (1,650 MW total energy generation capacity) (Copper Mountain).

The appropriately called Mammoth Solar Project will feature around 2.85 million solar panels spread across a surface area of 13,000 acres.

In 2024, the project is expected to be completed and fully operating.

The project is scheduled to become fully operational in 2024.

The largest solar farm in the world 

As of March 2022, the largest solar farm in the world is Bhadla Solar Park, in the Rajasthan desert region of India. 

The solar farm covers an enormous area of 14,000 acres. It has an energy generating capacity of 2,245 MW, or 2.2 gigawatts. 

It is nearly three times the capacity of America’s current biggest solar farm, Copper Mountain. 

The 2.2 GW Bhadla Solar Park is on the fringes of the Thar Desert in India; temperatures there go up to 126 degrees Fahrenheit.

The future of solar farms

Community solar initiatives, utility-scale solar projects, and rooftop solar projects will all eventually contribute to the clean energy solution that will displace fossil fuel power across the US.

As solar farm developers continue to find ways to lower finance costs and equipment costs continue to decline, large-scale solar will only become more affordable. In the near future, bigger and much more solar farms should be expected to appear.

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