investing in solar farms

How To Invest In Solar Farms In 2023

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There are many alternative investments to choose from outside of stocks and bonds. Farmland is a popular choice due to its negative correlation to the stock market and ability to appreciate in tough economic times.

A farm can be used for a number of purposes such as growing crops or raising cattle. But there are also farms that capture energy – that is, solar energy.

Solar farms are large-scale outdoor power plants fueled by a natural source: the sun.

These farms use photovoltaic (PVC) panels installed on the ground in a cleared lot.

Solar farm investing means you'd be part of a movement to find alternative energy sources instead of our country’s continued reliance on finite fuel mined from the ground.

Sunlight is one of the most powerful alternative energy sources available and is becoming increasingly more popular among investors as well as homeowners.

Unlike the solar panels you’ve likely seen on rooftops of homes, solar farmers can produce enough electricity to power an entire town or even a larger region.

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Why Invest In A Solar Farm?

Solar farming has grown quite rapidly over the last few years. As a sustainable energy source, investors and governments alike are interested in the benefits of solar farming. In fact, since 2006, the US government has offered individuals major tax incentives for investing in solar panels. Aside from tax incentives, here are some other solid benefits of solar farm investing:

  • Solar farms support the use of a natural source of energy and reduce the country’s reliance on fossil fuels that will one day be depleted
  • The sun provides limitless energy and more than we could ever use
  • Investing in solar farms could be a smart way to diversify your portfolio
  • In ideal locations that get plenty of sunshine, farms can generate income 12 months per year
  • If you already own land, income could be higher than using it for crops or other purposes
  • Over the last decade, there has been explosive growth and interest in the solar industry

Invest In Farmland Today!

PlatformMinimumLinkAccredited OnlyInvestments
AcreTrader farmland investing platform$8,000+View InvestmentsYesUS Farmland, Timberland, Vineyards
FarmTogether farmland investing platform$15,000+View InvestmentsYesUS Farmland
farmfolio$30,000+View InvestmentsNoSouth American Farmland

Ways To Invest In Solar Energy Farms

While not quite as simple as stocks and bonds, investors have a few options when it comes to investing in solar energy farms. On the more simple side, investors can invest in a publicly traded company associated with solar energy. And on the more intensive side, there is the option to build your own solar farm.

Here are six ways to invest in solar energy:

  1. Just like mortgage lending institutions, there are lots of companies offering loans to build community solar farms. It is crucial that you compare loan fees and interest, as they can vary wildly. Some local utility companies offer investors a profit sharing model with local residents. Contact yours to see if this option exists where you live.
  2. Shasta Power Solar Development Investments is another option. Its mission is to grow your investment portfolio and also to leave the world a better place. Shasta Power is leading the transformation from coal energy to a sustainable future.
  3. iShares sustainable ETFs focus on specific themes including environmental causes. These ETFs can actually be bought and sold through most brokerages available today.
  4. Another option would be to invest in a publicly traded company focusing on solar energy. A few of these companies include First Solar, Brookefield Renewable, and SolarEdge.
  5. The most costly option would be to build your own solar farm! This takes significant capital and extensive research. In addition to securing a big enough plot of land, you will need to ensure you have a proper business license and legal requirements to engage in this type of business. Building a 1 megawatt solar farm will cost roughly $800K – $1M to get started. A 1 megawatt farm would also need to have at least 6-8 acres of land.
  6. If you have unused land, you can also look into leasing out the land to a solar farmer.

Some people also choose to invest in solar on a smaller scale through solar panels on their own home. While it does represent a large initial cost, it can drastically reduce your energy bill each month. And once your solar panels are paid off, you will start to experience the ROI. Investing in solar panels also offers tax incentives. Contact your CPA to learn more.

Types of Solar Farms

There are really two different types of solar farms. The main difference is the size of the farm.

The two types are utility scale farms and community scale farms. Utility scale farms are massive farms that provide power to large areas. On the other hand, community scale farms are much smaller and power smaller communities.

The other key difference is the consumer of the energy. Community farms provide solar energy to those who pay for its service in a local group. Utility farms typically work with the local utility companies.

Solar Farm Returns

All solar farms are different. The amount a solar farm can earn depends on a number of factors such as land, weather, type of panels, and geographic area to name a few.

An average 1 megawatt solar farm can earn roughly $43,500 per year. Of course, this figure varies wildly depending on the factors listed above.

The Copper Mountain Solar facility, which is in Nevada and is a 816 megawatt farm, is currently the biggest solar farm in the U.S.

If you lease out your land to a solar farmer, you could expect to earn roughly $1,000 to $2,000 per acre per year.

Solar Farm Investing: Final Thoughts

Unlike other energy sources, the sun provides limitless energy and far more than we could ever use. Additionally, as an energy source, it doesn't require high operational costs or fuel to capture.

While building your own solar farm can be incredibly complex, there are other ways to get started.

Some utility companies actually offer local residents the opportunity to participate in a profit sharing model or reduced energy cost plan.

You can also get started by investing in a publicly traded company that focuses on solar energy.

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