What is a Solar Farm? Cost, Land Needs & More

Are you looking forward to making money with solar panels? Are you planning to build a solar farm but don’t know where to start? If you’re looking for the answers to these questions, you’ve come to the right place. 

Over the last few years, the solar industry has seen booming growth in the global market. This is a major reason behind the increasing number of solar farms all across the globe. So, if you’re wondering if you can make money with solar farms, you are absolutely right. You will be glad to know that the solar farm return on investment experienced by most owners is very impressive. 

In this article, we will discuss everything about solar farms, from what they are, their types, solar panel farms price, complete solar farms cost, and land needs to important considerations for helping you get started. This solar farm guide is going to be very helpful. So, make sure to read it till the end!

What is a Solar Farm?

A solar farm is a huge collection of photovoltaic solar panels that converts sunlight into electricity and routes it to a power grid that distributes it to the customers. These farms are also known as PV power stations and solar parks and are usually installed on the land, unlike the solar panels installed on the rooftop. 

The concept of solar farms can be applied for both residential and commercial usage. A small number of solar panels can be enough to supply power to community households, whereas a large number of solar panels can be utilised for commercial purposes.

Different Types of Solar Farms

Solar farms are of two types: community solar farms and utility-scale solar farms. The biggest difference between these farms is their customers. In the case of utility-scale solar farms, they sell directly to the utilities. On the other hand, community solar farms sell electricity directly to the customers like homeowners and tenants. 

Let’s discuss both types of solar farms in brief.

  • Community Solar Farms

Community solar farms have become quite popular over a couple of years. More and more households have realised that they can switch to non-conventional solar energy without installing solar panels on their rooftop.

A community solar farm is also sometimes known as a “solar garden” or “solar park”, where the produced electricity is used by a community consisting of multiple households. The farm is often built on a ground that spans multiple acres. 

Talking about the design, these solar farms look just like utility-scale solar farms but are smaller in size. These farms offer two options to the customers. They can either buy a share of the entire solar farm or lease energy from the solar system by paying a monthly price. In other words, they can replace their monthly electricity bill with a monthly solar power bill. It is not only safer for the environment but also highly cost-effective. 

community solar farm
  • Utility-Scale Solar Farms

As the name suggests, a utility-scale solar farm is basically a large solar farm that consists of multiple solar panels and is owned by a utility that transfers the generated power to the grid. Depending on the size and location of these farms, the electricity produced is either owned by a utility company or sold to wholesale buyers via a Power Purchase Agreement (PPA). 

They are different from the community solar farms as the electricity from these farms is sold to the utility, which then distributes it to residential, commercial or industrial facilities.

Community Solar FarmUtility-Scale Solar Farms
Electricity produced is used to supply to the community.Is used to provide supply back to the grid.
Households from community pay you back for the power.Power / Utility company pays you for the power.
Scale ranges from small to medium.Requires large scale investment to setup.
Based on scale, can provide power to 50-100 households.Based on scale, can provide power to a large number of households.

Are Solar Farms a Good Investment? — Advantages of Solar Farms

Are solar farms a good investment? This is a question that bothers many people. If you’re one of them, then the answer is — Yes! Solar farms are an excellent investment and can help you earn significant profits. If you’re still confused and looking for better reasons to invest in solar farms, here are some advantages to clarify your confusion. 

The following are the key advantages of solar farms:

  • Solar Energy is Clean and Green

If you have land and other resources, setting up a solar farm can be a great investment. The electricity produced by solar farms is not only cheap and readily accessible, but it is also very friendly to the environment. It doesn’t produce toxic byproducts like fossil fuels. 

  • Requires Very Little Maintenance

Solar panels require zero or low maintenance. In the past few years, solar panel technology has become more robust and efficient. Today, solar panels are made using highly durable materials that can withstand damage due to a wide variety of elements. They are easy to clean and stay fresh for years without requiring any maintenance work. 

  • No Upfront Cost for Community Solar Farm Subscribers

If you want to subscribe to a commission solar farm, you can easily do so without paying any upfront cost. This makes it a very good option for renters, households with low budgets, and those who can’t afford to install a solar panel on their rooftops.

Solar Farm Cost —How Much Does a Solar Farm Costs?

If you can’t afford to install solar panels on your rooftop, subscribing to a solar farm can be a great idea. You don’t have to pay any upfront cost, unlike the hefty installation fees required to set up rooftop solar panels. By subscribing to a community solar farm, you can save a good amount on your monthly electricity bills. 

Compared to rooftop solar panel setups, building a solar farm is a lot cheaper. Plus, many companies have reported a significant rise in their solar farm return on investment. 

Depending on the size, setting up a solar farm can cost from $800,000 to over 1.3 million USD. Moreover, a utility-scale solar farm will be at least 1 megawatt, which makes it capable of supplying power to nearly 200 households.

You can use the solar calculator here to figure out a rough estimate of a project.

Important Considerations for Building a Solar Farm

To help you get started, we have mentioned some important considerations for setting up a solar farm. Check them out!

  • Land Requirement: How many acres of land is enough for building a solar farm? This is the first question that comes to mind when planning to set up a solar farm. A small solar farm requires just a couple of acres. However, a utility-scale solar farm requires more land that can go up to hundreds of acres. 
  • Number of Solar Panels: The second question is, how many solar panels will be enough to build a solar farm? To find out the number of panels you need, first, you need to figure out the demand in your area in kilowatts. To calculate this demand, you have to find out the solar panel production ratio at your location to see how much energy (in watts) the plant can provide. 
  • Understanding Electrical Connection: Before setting up the solar array, you need to ensure that the land is situated near electrical panels and power lines. This is very important for connecting your array to the centralized power source.
  • Maintenance and Cleaning: Keeping the solar farm clean is very important for maintaining its usability and efficiency. Because they are situated on the ground, they tend to get dirty very quickly. But the good thing is, they are very easy to clean and require no other maintenance work.
  • Solar Array Installation Cost: Solar array installation cost depends on a number of factors like location, number of panels, size of the farm, as well as the fee of contractors. In short, the cost can easily vary depending upon the above-mentioned factors. So, it is advised to take multiple quotes from reputed contractors and select the most efficient and cost-effective one. Moreover, suppose you’re considering a solar installation for your home or community rather than building a solar farm. In that case, solar installation cost calculators are available online that you can use to get an approximate estimate of the total set-up cost. 
  • Profit Margin for Solar Companies: What is the profit margin for solar companies? Just like any other business, solar farms also require initial funding. But the good news is, being an environmentally-friendly concept, this funding is greatly subsidized by the government. You can save around 5-7% on initial installation. Once the business is set up, it can thrive, giving you an impressive margin of nearly 25 to 28% of your investment. 

Starting a solar farm can be very rewarding, given the excellent ROI and profits it offers over time. The government is also supporting solar businesses by providing subsidies and other benefits. We have discussed everything you need to know about solar farms. Now, it’s your time to make the right decision.

Solar Farms — Frequently Asked Questions

Have more doubts regarding solar farms? Don’t worry! Check out the most asked questions about solar farms, along with their answers. 

Are solar farms profitable?

The profitability of solar farms depends on multinational factors like their size, geographic location and the cost of electricity in that area. You can determine the potential profit of a solar farm by multiplying the average market rate (in wholesale) of solar power in your area by the size of your farm. Also, consider the installation and upfront costs associated with the farm. In case you’re renting land, add that too in your calculations. 

How much power does one acre of solar panels produce?

The answer largely depends on the type of solar panels you are using and the amount of sunlight they are exposed to. The deal is different solar panels offer different efficiency, and different regions receive different amounts of sunlight. Most companies and landowners in India produce several hundreds of MWh per year for every acre of solar panels. 

What do solar farms look like?

Solar farms of today can be designed in many ways. Talented contractors build many aesthetically pleasing farms. However, an important thing to note is that the design of the farm impacts the approvals and permits required for its establishment. But again, they can be designed in multiple ways, and slight creativity goes a long way. You can easily design an artistic solar farm without making it very complicated. 

Can you make money from solar panels?

Yes, you can make money by setting up a solar farm. Not just that, you will also contribute to our environment’s safety. 

How much does a 1 MW solar farm cost?

The cost of solar farms varies depending upon multiple factors, as discussed in the article. Plus, the government is offering great subsidies to promote clean and green energy. You can expect to invest anything in between 1,00,000$ and 5,00,000$ for a 1MW solar farm.

Meet the Authors

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Dax Linwood is a knowledgeable and experienced writer in the field of renewable energy, with a core expertise in solar energy. With a passion for sustainability and a commitment to advancing the adoption of clean energy, Dax's writing is both informative and engaging. He has worked on numerous solar energy projects, including solar panel installation and maintenance, and has a deep understanding of the technology and its benefits. Dax's expertise and dedication to the renewable energy industry make him a valuable resource for those looking to learn more about solar energy and its impact on the environment.

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Brantley Edison is a highly experienced and accomplished writer in the field of solar energy. With over a decade of experience in the renewable energy industry, Brantley has contributed significantly to the growth and adoption of solar energy across various sectors. He has worked on several large-scale solar projects, including the design and installation of solar energy systems for commercial and residential properties.

Brantley holds a Bachelor's degree in Electrical Engineering and a Master's degree in Sustainable Energy. His educational qualifications and hands-on experience have given him a deep understanding of the technical aspects of solar energy, and he is well-versed in the latest trends and advancements in the industry.

Brantley's writing is highly informative and engaging, with a focus on educating readers about the benefits of solar energy and promoting sustainable practices. His expertise and contributions to the solar energy industry make him a valuable resource for those interested in adopting solar energy solutions.

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