How Much Does It Cost To Start A Solar Farm?

Key Points

• Building a solar farm involves placing a cluster of photovoltaic solar panels on a cleared plot of land. This business opportunity can be lucrative by farming sunlight on your land and sending energy back to the power company.
• The total cost of a solar farming operation comes down to several factors, including land, power lines, solar equipment, permits, and labor.
• To justify the costs, a profitable solar farm typically produces at least 1 megawatt, which requires around 7-10 acres of land with 5,000-7,000 solar panels.
• The average cost for one acre of land is $3,160; panel costs are typically between $26,750 and $31,000 per acre.
• The total cost for the average 1-megawatt solar farm ranges from $890,000 to $1,010,000.
• As demand for clean energy like solar continues to rise, investing in solar energy could be a wise move for the future, as the technology and efficiency of solar energy will likely continue to improve.

The concept of building a solar farm or solar park is pretty simple.

It starts with placing a large cluster of photovoltaic solar panels on a cleared plot of land. No specific number of panels is required for a site to be called a solar farm or amount of acres for the meetings.

The execution of building a solar farm is a bit more complicated.

In recent years, this has become a lucrative business opportunity for some. By farming sunlight on your land and sending energy back to the power company, you can run your meter in reverse and get a monthly check.

So, what might you expect to shell out to get up and running with this business?

Solar Farm Costs

The total cost associated with a solar farming operation comes down to several factors:

1. Land – Is the land owned, or will it need to be purchased? Is the land cleared or in need of clearing?
2. Power – Do power lines run to the property?
3. Solar Array – How much does the equipment cost?
4. Permits – Total cost of the licenses and other necessary documentation.
5. Labor – What will be spent on the electricians and other workers to build the farm?

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How Much Energy Is Needed?

Before getting into the costs, it's essential to understand how big a solar farm should be!

On average, one house needs roughly 18-26 solar panels on its roof to bring its energy bill down to zero.

To justify the costs, a solar farm must have a positive return on investment (ROI).

With this in mind, a profitable solar farm will typically produce at least 1 megawatt, the same as 1 million watts or the power needed for roughly 150 – 210 homes. To make 1 megawatt, 5,000 to 7,000 solar panels are typically required.

1 Megawatt Solar Farm

The first requirement is land. To have enough space for the panels and room to be organized and maintained, a 1 Mega-watt solar farm generally requires around 7 – 10 acres. However, it is difficult to find a tract of land with 7-10 acres of flat terrain when buying land.

In other words, to secure 7-10 acres of flat land, you may have to buy closer to 20-30 acres.

The ideal spot is relatively flat land or a gentle slope facing south. However, most large plots of cleared land will serve the purpose.

The average cost for one acre of land is $3,160. This amount, of course, varies wildly based on the location of the land and its condition. For example, if the ground needs to be cleared of trees and debris, then the costs will rise. Another major obstacle is how close the land is to existing infrastructure. Bringing power to the ground can be extremely expensive for long distances.

So, your average investment for 7 – 10 acres of land would be $22,120 to $31,600. But, again, this figure can vary dramatically based on various factors. If you already own the land, could you strike out this cost?

Here’s where it gets a bit pricey to start.

Panel costs alone are typically between $26,750 and $31,000 per acre. There are also other associated costs, such as installing the equipment, batteries, transformers, and wiring.

For a 7-acre operation, enough for a one-megawatt farm, that cost would be around $210,000 to $250,000, depending on whether or not you owned the land. Remember, this is the cost for the panels and land only. It gets far more expensive from here, including installation and materials such as miles and miles of copper and aluminum wire.

SEIA Cost Figures & Bottom Line

The Solar Energy Industries Association publishes average costs for solar builds. This is priced out on a per-watt basis.

In 2021, the average cost for a solar farm was a range of $0.89 to $1.01 per watt. Since there are 1,000,000 watts in a megawatt, the total cost for the average 1-megawatt solar farm ranges from $890,000 to $1,010,000.

So, how much does it cost to start a decent solar farm?

Long story short, be prepared to shell out one million dollars to get a decent solar farm operation going today.

Into the Future

Solar energy is still a new expanding field of technology. As popular demand for clean energy like solar continues to rise, the private and public sectors are incentivized to continue investing in emergent technologies such as solar, battery technology, green manufacturing practices, etc.

As these technologies progress, the efficiency of solar energy will only continue to rise, making several of the variables in our snapshot today change wildly – but likely towards making solar panels more efficient per square foot.

The land also tends to appreciate over time as demand for space grows in many sectors.