Building a solar farm ranges from $800,000 to over $1 million per megawatt, not including the land cost.
Building a solar farm costs about $2.40 per watt to install, though the actual costs range from $0.83 on the low end to $3.80 on the high end, not including the cost of land. By acreage, building a solar farm costs between $400,000 and $500,000 per acre.
If you live on a large plot of land, consider building a solar farm as a new business venture. Aside from generating clean energy for your property, you can sell energy to local households who buy into a community solar program. The up-front cost may seem high, but the operation will reduce your energy bills and even earn a profit by selling extra clean energy to the grid. Here’s what to know.
Solar farming involves installing solar panels over a large area of land to generate massive amounts of electricity from sunlight.
| Solar Farm Cost (Per Watt) | Solar Farm Cost (Per Acre) | Solar Farm Cost (Per Megawatt) |
|---|---|---|
| $0.80–$1.36 | $400,000–$500,000 | $800,000–$1 million+ |
Solar farms are not a residential project for the average homeowner. Instead, installing a solar farm is a larger-scale business that requires a high up-front investment.
Solar farm costs can be estimated by energy output (megawatts) or size (acres). One megawatt is the power equal to 1 million watts, and one megawatt will power about 164 homes. Several factors contribute to this project's overall cost, such as the type and size of the solar farm you install.
The size of your solar farm is another significant factor in your overall cost. Smaller property owners who want to provide solar energy to their townhomes or apartment complexes will need a solar farm significantly smaller than a government-owned entity trying to provide solar energy for thousands of homes. The size of your solar farm will impact the land size needed, the amount of materials (like solar panels), and operating costs.
| Solar Farm Type | Average Land Size (Acres) | Average Cost (Not Including Land) |
|---|---|---|
| Community | 3–20 | $0.80 to $3.50 per watt |
| Commercial | 10–40+ | Starting at $400,000 |
| Utility-scale | 10–100+ | Starting at $800,000 |
Community solar farms offer higher energy output than simply installing solar panels on your rooftop. Solar farms are also more cost-effective, running between $0.80 to $1.36 per watt, and solar panel installation costs about $2.50 to $3.50 per watt. These large-scale projects usually provide 5 megawatts or less, and a megawatt can power an average of 164 homes.
Larger than a community solar farm, many companies opt to use a commercial solar farm to generate the electricity they need to operate their business. Depending on the business size, a commercial solar farm may span a few acres of land to a few hundred acres, making this project start at $400,000.
As governments work toward a more sustainable energy future, utility-scale solar farms become more commonplace to power hundreds or thousands of homes. Utility-scale solar farms may span 1 megawatt to 2,000 megawatts. Since there is a greater need for higher wattage for this giant-scale project, the cost can start at $800,000, not counting the land cost.
A solar farm has many components, from the panels themselves to the batteries that store the energy. Since so many different components are required, the cost of materials will be the bulk of your total cost of installing a solar farm. Some materials you will need include:
Racks to hold panels
Foundations for the racks
Inverters
Cables and connectors
Additional equipment to connect the solar plant to the grid and for battery storage
Monitoring systems
Security equipment, including fences and cameras
The type of solar panel you choose for your solar farm will make up a large part of the overall materials cost. While the cost per watt might be small on its own per solar panel, it’s important to remember the scale of your project.
| Type of Solar Panel | Average Cost, Per Watt | Average Solar Panel Life Span |
|---|---|---|
| Monocrystalline | $1–$1.50 | 40 years |
| Polycrystalline | $0.90–$1 | 25 years |
| Thin Film | $0.70–$1 | 15 years |
A local solar panel installer can help you choose, source, and install the right array for your needs.
The land needed for the farm is directly related to the size of your solar farm. If you already own the land required to install the solar farm, you’re a step ahead. If not, you’ll have to find the property to build. Across the U.S., acreage can range from as little as $3,400 in Wyoming to as much as $78,500 in Delaware.
| Size of Land | Capacity of Solar Farm | Approximate Residential Homes Powered |
|---|---|---|
| 6 | 1 | 164 |
| 15 | 2.5 | 610 |
| 30 | 5 | 1,250 |
| 60 | 10 | 2,500 |
| 150 | 25 | 6,100 |
Installation will make up about 10% of the project cost for starting a solar farm. In addition to having construction and solar companies develop the land and install the panels, you’ll need to hire people to maintain the grounds to prevent plants from growing over the panels and to clean the solar panels for efficiency.
In order to build a solar farm, you’ll need special permits throughout the process. As with most things, the cost of permits varies from state to state. Although some states have streamlined the permitting process for solar farms due to their impeccable renewable energy, others still require a lengthy process.
Choosing the right location is essential, since local sunshine conditions, land suitability, and proximity to infrastructure (like electrical substations and transmission lines) will dictate the productivity of your solar farm. The location also impacts the cost of starting and operating a solar farm. You’ll need to factor in labor costs like wages and benefits, material costs, land costs (buying or renting the land), and the local cost to service and maintain solar panels. Operations are more costly in areas with higher costs of living and land costs.
Installing a solar farm will help you harness the power of the sun, but not without additional ongoing expenses after the initial installation.
Plan to budget around $15,000 per megawatt for annual maintenance. This includes cleaning the solar panels and monitoring the system’s performance. Most solar panels need to be cleaned every six months to remove dirt and debris. You should also research how long solar panels last, and plan to replace damaged, worn, or underperforming panels.
You’ll also likely need vegetative maintenance for your solar farm, which includes mowing, weeding, and other grass control measures.
The installation and operation of a solar farm will require insurance. The exact price depends on factors like the deductible and coverage amount you choose, the size of your solar farm, and any location-specific risks. Insurance premium rates range from $0.15 to $0.30 per $100 of total insurable value.
Your solar farm insurance can provide different coverages, including all-risk property coverage, general liability, equipment breakdown, and business interruption. A solar farm insurance broker can offer you more specific pricing information based on your needs.
To install a solar farm, you’ll need to work with a solar panel installer, your utility company, and your local, state, and federal governments. This massive project cannot be done alone, and it requires planning permissions and professional installation.
According to the Environmental Protection Agency, developing a solar farm is a lengthy process. You’ll need certifications, project proposals, and purchase agreements, just to name a few. You’ll also need to set up a business and purchase insurance for your solar farm.
When comparing solar farms to rooftop solar installations, a basic choice is whether you’ll install your solar panels on the ground versus a roof. While most solar farms have ground-mounted panels and most residential solar panel systems are on roofs, you can install panels on the roofs of buildings or on the ground in either case. Solar farms are on open land and generate power for wider communities or the grid supply, while rooftop solar systems provide power directly to the building they’re on.
Rooftop solar installations are less expensive to install, are designed to support one building, and their size is limited to what the roof can support. They help homeowners save money on their utility bills and power the buildings they’re on, from solar panels on a shed to an apartment building or business. On the other hand, solar farms cost more up front but can be sized up to maximize profit by selling excess energy to the grid.
Maintenance needs vary for both solar setups. Solar farms are larger operations that require routine professional maintenance, while rooftop solar installations need occasional cleaning and service and an annual inspection.
Most solar farms are designed for community or utility use, as these massive areas of solar panels will supply enough energy to power many households. Expect to earn about $14,000 to $40,000 annually for each megawatt of power from your community solar farm. Plus, your own household can save up to 15% of annual electricity costs with solar energy.
If you want to build a solar farm on your land, you can:
Find local homeowners who are interested in purchasing power from your community solar project to offset the cost of installing and maintaining a solar farm.
Apply for federal and state government incentives to offset the start-up costs.
Invest in high-quality solar materials to maximize longevity and performance.
Develop a maintenance program, including routine cleaning and performance monitoring.
Choose the right location for your solar farm—low shade and high sun rates. Additionally, consider the potential to expand in the future.
Instead of building your own solar farm, another option is to provide your land to lease for a solar project. This will generate passive income, where you can earn around $300 to $2,000 per acre each year by providing your land for another developer to install and manage the solar farm.
Depending on the location, output, and investors’ goals, the average ROI on solar farms often makes them a smart long-term venture and a viable way to contribute to renewable energy efforts.
For investors, solar farms can be a wise investment in the future, especially as solar panel costs fall and energy prices rise. Incentives like solar tax credits reduce initial costs, and selling power back to the grid or leasing the land can make solar farm investment even more profitable. Operational costs are relatively low and—if local electricity prices and solar conditions cooperate—ongoing revenue can be impressive.
Solar farms that are built and managed properly have a net positive environmental impact. Solar energy significantly reduces greenhouse gas emissions, which is good for the Earth. In addition to earning and selling carbon credits, or permits to release a certain amount of greenhouse gases, solar farms can also earn a steady income from direct energy sales.
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Rooftop solar panels supply energy to a single household, where a solar farm can power multiple homes at once with clean energy. Residential rooftop solar panels cost more per watt with a lower project total, and those panels only service the residence they are installed on (in most circumstances). With a solar farm, multiple households can buy into the project and share the overall cost.
You don’t have to build your own solar farm to reap the benefits of clean energy. In the U.S., there are 41 states with at least one community solar farm. You can look for community solar projects near you, or you can contact your local utility company for further information.
Homeowners who use solar power can save 5% to 15% on their energy bills per year. If you own a community solar farm, it can generate about $14,000 to $40,000 per megawatt annually. Leasing your land for someone else to develop a solar farm will earn you up to $2,000 per acre per year.
The actual time it takes to construct the solar farm is relatively short, taking between 2 and 4 months on average. That timeline is dependent on site conditions, crew size, and the overall size of the solar farm.
However, the time it takes to get the ball rolling is significantly longer, ranging from 3 to 5 years. With a project of this scale, you’ll need to obtain all of the proper permits and approvals to start breaking ground, and depending on your location, that could be an extended process.
