Solar farms: What are they and how much do they cost?

The solar industry has grown rapidly over the past decade, with more individuals and businesses worldwide finding ways to tap into clean energy. A significant contributing factor has been the surge in solar farms popping up across the globe. As more ways emerge to go solar, reduce greenhouse gas emissions, and combat climate change, there can be a lot to keep track of, and you've probably got some questions. This article will explain the types of solar farms, how much they cost, and how to find one near you.

A solar farm, sometimes called a solar garden or a photovoltaic (PV) power station, is a large solar array that converts sunlight into energy that is then routed to the electricity grid. Many of these massive ground-mounted arrays are owned by utilities and are another asset for the utility to supply power to properties in their coverage area. These solar farms can include thousands of solar panels. Other solar farms are community solar projects, which typically have hundreds of solar panels and can be a good alternative for households that can't install solar on their property.

There are two main types of solar farms around the country: utility-scale and community solar farms. The main difference between the two is their customers – utility-scale solar farms sell solar generation directly to public utilities. In contrast, community solar farms sell directly to end-consumers of electricity, such as homeowners and renters.

Utility-scale solar vs. community solar farms

Utility-scale solar farms

A utility-scale solar farm (often referred to as simply a solar power plant) is a large solar farm owned by a utility company that consists of many solar panels and sends electricity to the grid. Depending on the installation's geographic location, the power generation at these farms is either sold to wholesale utility buyers through a power purchase agreement (PPA) or owned directly by an electric utility company. Regardless of the exact structure, the original customer of the solar power is a utility, which then distributes the generated electricity to residential, commercial, and industrial customers connected to the grid.

Community solar farms

Community solar has taken off in recent years as more households have realized that they can go solar without being required to put solar panels on their physical roof. A community solar farm – sometimes referred to as a "solar garden" or "roofless solar" – is a farm that generates electricity to be shared across multiple households. In most cases, a community solar array is a large ground mount installation that spans one or many acres, usually in a field.

Visually, these solar gardens resemble utility-scale solar farms, but they're often smaller in size. Customers can either purchase a share of a solar garden and own that portion of the overall array, or they can lease energy from the solar system and, in a sense, replace their monthly utility payments with monthly community solar payments that are typically at a lower price.

In most states, community solar subscribers can also access virtual net metering. This incentive allows energy generated by solar panels at a solar farm to be sent back as electricity bill credits to subscribers. You can explore community solar projects in your utility area by visiting our Community Solar Marketplace.

Starting or subscribing to a solar farm can be a great way to save money, reduce your carbon footprint and make the most of rapidly changing solar technology. However, there are several things to remember before investing in one.

Environmentally friendly

If you have the available land and resources, starting a solar farm yourself can be a worthwhile investment. Solar energy generated by utility and community solar farms is abundant and readily accessible. Unlike fossil fuels, solar energy doesn't produce any harmful by-products and is virtually inexhaustible.

Require little maintenance

Solar panel technology has improved dramatically in the past few years, and panels require almost no maintenance. Solar panels are made with durable materials designed to withstand lots of damage from the elements and only require minimal cleaning. 

No upfront cost for community solar farm subscribers

If you're interested in subscribing to a community solar farm, you likely won't have to pay any upfront cost. This makes community solar an excellent option for renters, those with roofs unsuitable for solar panels, or those looking to avoid the cost of rooftop solar panels.

Have an upfront cost for property owners

Commercial and residential solar installations have high upfront costs. Property owners looking to start a solar farm can expect to pay $800,000 to $1.3 million initially; however, there's also the potential for a significant return on investment. Once you've constructed the farm, you can make as much as $40,000 annually by selling electricity for a 1MW solar farm.

Require a lot of space.

Solar farms (typically about five to seven acres) need a significant amount of land to account for the solar arrays and the space for related equipment, repair, and maintenance. It also may take up to five years to construct a solar farm. 

Energy storage for solar farms can be costly.

Solar panels only work when the sun is shining. So, like solar-plus-storage options for homeowners, utility-scale and community solar farms require storage technology like batteries to collect and preserve the excess energy generated by solar panels. This can get expensive. However, depending on the location, there are financial benefits for subscribers and owners who sell energy back to the grid as net metering.

If traditional rooftop solar isn’t right for you, subscribing to a community solar farm could be a good option. There’s typically no up-front cost to sign up, unlike the initial investment required to install solar panels. Once you’ve subscribed, you can expect to save about 5 to 15 percent on your electric bill.

Compared to residential solar panel setups, a solar farm is much cheaper to build on a dollar-per-watt basis; you may pay between $0.80 and $1.30 per watt to build a solar farm rather than the $2.86 per watt average cost of a residential installation. Depending on the size of the installation, solar farm costs can be between $800,000 to over 1.3 million dollars – significantly higher than the $20,020 average cost of a residential installation. However, solar panel farms at the utility scale will typically be at least one megawatt (MW) in size, capable of supplying electricity to about 200 households. 

When developers are considering building a solar farm, whether it's a 50 kW array or a 50+ MW project, here are five key questions they'll ask:

1. How many acres do I need for this size of power plant?

A smaller solar farm may only require a few acres of land, whereas a large utility-scale solar farm can require thousands of acres, as the Bhadla Solar Park mentioned above.

2. How will the electrical connection work?

You'll need to consider the location of the land and whether it's close enough to power lines and electrical panels to feasibly connect your array to the power grid or a centralized power source.

3. How will I clean and maintain the plant?

Whether or not the location has water sources or cleaning options will be essential to maintain the efficiency of so many solar panels situated so close to the ground. For example, the Bhadla Solar Park in India is constantly cleaned by a team of solar-powered robots.

4. How many solar panels will I need?

To ensure you'll meet the expected energy demand with your solar farm, you'll need to start with the required kilowatt hours of energy and work backward to get the number of panels you'll need for the array. To calculate this figure, you'll need to determine your area's solar panel production ratio to understand how much energy a specific solar panel wattage will provide. Check out our full explanation of how to do this type of calculation.

5. What's a reasonable price for my solar installation?

For larger solar panel farms, there will likely be significant discrepancies between quotes from various contractors, so getting a few bids from different companies is essential. Solar Power World compiles a list of top solar developers each year, which can be a helpful starting point.
If you're in the early stages of considering a residential solar installation rather than a solar farm, our Solar Calculator can offer a free estimate for what the array might cost, when you could break even on the investment, and how much it could save you over time. For those interested in the community solar options in their state, check out our Community Solar Marketplace.

How profitable is a solar farm?

The profitability of a solar farm varies substantially based on its size and the cost of electricity in the area where it’s built. You can estimate the potential profitability of a solar farm by multiplying the average wholesale market rate of solar electricity in your area (in dollars per megawatt-hour, MWh) by the farm’s size (in MW). Just be sure to account for the upfront and maintenance costs associated with the farm – or if you’re renting land – in your solar calculations as well.

Are solar farms bad?

While solar farms are effective forms of renewable energy, their construction can have a negative impact on the environment. In addition to the amount of space needed for solar facilities and the materials and energy required to produce solar panels, solar farms can contribute to harmful solar panel disposal practices and even contaminate groundwater due to the maintenance requirements of a solar panel farm. When constructed properly, however, solar farms are completely safe (and beneficial) for the environment – especially if they’re constructed on landfills or other types of land that aren’t pristine.   

How much electricity does one acre of solar panels produce?

This largely depends on the efficiency of the solar modules, the geographic location, and the amount of sunlight exposure. Landowners and companies that maintain solar panel farms can expect several hundred MWh of electricity produced yearly for one acre of solar panels.

How do solar farms look?

One concern investors may have is the aesthetics of solar farms and their impact on permits and approvals. But, as shown by numerous examples from around the world, a little creativity goes a long way. Take a look at these artistic solar farms and how they’re reshaping the idea that solar farms are bland.

If you are interested in community solar, the best way to find a solar farm near you is on the EnergySage Community Solar Marketplace. By subscribing, you can filter by all sorts of project details, read about individual developers and panel locations, and compare your estimated yearly savings. Get started today to start saving money on electric bills, even as a renter.