How Much Does It Cost To Start A Solar Farm?

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

It begins with placing a large cluster of photovoltaic solar panels on a cleared plot of land. There is not a specific number of panels required for a site to be called a solar farm, or amount of acres for the panels.

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

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

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 a number of 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 – Are power lines run to the property?
3. Solar Array – How much does the equipment cost?
4. Permits – Total cost of the permits and other necessary documentation.
5. Labor – What will be spent on the electricians and other workers to actually build the farm?

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How Much Energy Is Needed?

Before getting into the costs, it's important to understand just how big a solar farm ought to be.

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

In order 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, which is the same as 1 million watts or the power needed for roughly 150 – 210 homes. In order to produce 1 megawatt, 5000 to 7000 solar panels are typically needed.

1 Megawatt Solar Farm

The first requirement is land. In order to have enough space for the panels and room for them to be organized and maintained, a 1 Mega-watt solar farm generally requires around 7 – 10 acres. However, when buying land, it is difficult to find a tract of land with 7-10 acres of flat terrain. In other words, in order 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. If the land 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. The costs to bring power to the land can be extremely expensive for long distances.

So, your average investment for 7 – 10 acres of land would be 22,120 to 31,600. Again, this figure can clearly vary dramatically based on a variety of factors. Obviously, if you already own the land, strike out this cost.

Here’s where it gets bit pricey to start out. 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 1 mega-watt farm, that cost would be around $210,000 to $250,000 depending on whether or not you owned the land. Keep in mind, 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 Figure

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.

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