How much does a solar farm cost?
How much does a solar farm cost?
$0.90 – $1.30 average cost per watt
$900,000 – $1,300,000 average cost per megawatt
$300,000 – $500,000 average cost per acre
Average solar farm cost
Building a solar farm costs $0.90 to $1.30 per watt, not including the land. A 1-acre solar farm costs $300,000 to $500,000 total. A 1-MW solar farm costs $900,000 to $1,300,000 to build and powers 100 to 250 homes. The cost to build a solar farm depends on size, type, and location.
| Factor | Average cost |
|---|---|
| Per watt | $0.90 – $1.30* |
| Per acre | $300,000 – $500,000 |
| Per megawatt | $900,000 – $1,300,000* |
*Prices do not include the cost of the land.
Other terms for a solar farm include solar park, solar power plant, solar power station, solar garden, and photovoltaic (PV) power station.
In comparison, residential solar panel installation costs $2.53 to $3.15 per watt.
A 1-megawatt solar farm can power 100 to 250 homes, depending on the location and climate.
Solar power plant cost breakdown
Size and capacity are the biggest factors impacting the cost of a solar farm. Other cost factors to consider when planning a solar farm installation include:
Purpose – A small-scale solar farm built to power local homes and businesses will have different planning and development requirements than a larger-scale solar farm built to power hundreds or thousands of customers on the electrical grid.
Location – The land's proximity to existing roads and power lines is a huge factor in determining the amount of work it will take to build and connect to the grid.
Cost of land – If you don't already own the property to build a solar farm, land in the US costs $12,000 to $15,000 per acre on average but can be as little as $3,500 per acre or as high as $80,000+ per acre depending on the state and site conditions.
Climate – The amount of sunlight the solar panels receive impacts how much electricity is generated, and therefore how profitable the farm may be.
Design & engineering – Solar farm planning, design, and construction requires the skills of several professionals, including electrical engineers. Local labor rates and the scope of your project affect these costs.
Installation – Installation labor makes up 10% to 15% of the total cost to build a solar farm in most cases.
Panel type – Solar panels may be fixed or sun-tracking and come in three material types. Monocrystalline panels cost the most but typically generate the most electricity. Polycrystalline costs less but is less efficient. Thin film panels are the cheapest and offer the lowest efficiency and require more land.
Additional materials – Solar panels are only one piece of the puzzle when building a solar farm. You also need structures to hold the panels, cables, inverters, batteries to store power, housing for battery storage, and monitoring and security systems.
Permitting – Regulations and permitting requirements to build a solar farm vary by state. Some states have made the process smoother and simpler to encourage renewable energy projects, while others require many lengthy and complicated steps to plan, design, and construct a solar farm.
Financing – Solar farms are a huge undertaking and typically involve investors or pre-construction loans.
Tax credits & incentives – Depending on the type of solar farm, you may be able to save up to 30% on the installation with the federal solar Investment Tax Credit (ITC).
Ongoing maintenance – Annual maintenance for a solar farm costs $10 to $50 per kilowatt to keep the solar panels clean, monitor to ensure the system's performance, and repair or replace parts as needed. Solar panel cleaning alone costs $10 to $20 per panel.
Check the Database of State Incentives for Renewables and Efficiency (DSIRE) for potential savings in your area.
Types of solar farms
Most solar farms fall in one of three categories:
Community solar farms – Community solar farms are typically 5 MW or less and are built to serve the local community. Subscribers buy shares to power their homes and businesses and receive credits for extra electricity their share produces that is sold to the power company, further reducing subscriber utility costs.
Commercial & industrial solar farms – Large businesses sometimes build solar farms on-site to generate the electricity needed to run the business. Depending on the size of the business, commercial and industrial solar farm installations are often larger than community solar farms but smaller than utility-scale farms.
Utility-scale solar farms – Utility-scale solar farms are larger-scale installations, often using hundreds of acres to generate up to a gigawatt (GW) of electricity to sell to utility companies. Some utility companies directly own utility-scale solar farms.
Solar farm pros and cons
Building a solar farm requires a significant investment up front but has the potential to earn significant revenue over time. While some may not like the look of a field of panels, they provide a safe and quiet source of renewable energy and could serve as an additional income stream for farmers.
| Pros | Cons |
|---|---|
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Steps to build a solar farm
Building a solar farm is no small feat. This project requires extensive research, planning, and design before the site preparation and installation can even begin.
The solar farm development and construction process involves the following steps:
Market research – Confirm there is actual demand for solar power in the area you're planning to build. In addition to consulting with the utility company, this research may involve contacting local homeowners, businesses, schools, churches, and other organizations.
Legal research – Confirm all the legal requirements for building a solar farm in your area.
Cost research – Calculate the approximate cost to build the solar farm and estimate the return on investment (ROI).
Financing – Obtain financing if needed through investors or loans.
Education – Learn how to run and maintain a solar farm.
Business setup – You'll need to set up a business to operate the solar farm.
Land acquisition – If you don't already own a piece of land, look for a flat, south-facing property as close as possible to an electrical grid and accessible roads.
Plans – Work with an electrical engineer to produce plans for the solar farm construction.
Permits – Obtaining all the required licenses, permits, and insurance to build the solar farm is a lengthy process. The specific requirements vary by state.
Site prep – Preparing the site may involve land clearing and leveling to create an optimal installation surface.
Installation – Install the panels and other associated components.
Connect to the grid – The local utility company typically does an analysis to determine the requirements for this step.
An alternative to building a solar farm is to lease your land for solar development. Leasing your land for solar farming generates quicker income but requires a long-term commitment, and your income only comes from the lease of the land, not from the energy produced on it.
Solar farm FAQs
What is a solar farm?
A solar farm is a piece of land used for a large-scale ground-mounted solar panel installation. Most solar farms have hundreds or thousands of panels, with renewable energy capacities in the megawatts (MW) range. Solar farms are typically used for utility or community projects.
Some solar farms utilize agrivoltaics, or solar sharing, and use the land for growing crops and harnessing solar energy simultaneously. Growing crops like tomatoes that thrive in the solar panels' shade can increase crop production, reduce the crop's water demands, and offer farmers multiple potential income streams.
How much can I save with a solar farm?
You can save 5% to 20% per year on electricity costs by subscribing to a community solar farm. The savings is more difficult to calculate if you plan to build and operate a solar farm. After the initial payback period, you essentially have free electricity for the remaining life of the farm.
Are solar farms profitable?
Solar farms may be a profitable long-term investment. Many factors affect the potential profitability, like the farm's size, location, accessibility, available sunlight, proximity to the electrical grid and roads, local demand, market rates, state laws and incentives, equipment quality, and the initial startup costs.
The average payback period for solar farm construction is 5 to 10 years.
Potential profit ranges from $15,000 to $40,000 per year for each MW of power the farm produces and sells.
Leasing your land for solar farm development can bring in $300 to $3,000 per year per acre.
How much land do I need for a 1-megawatt solar farm?
You need 5 to 10 acres of land for a 1-megawatt solar farm. The number of solar panels needed to produce 1 megawatt (1 million watts, or 1,000 kilowatts) depends on the panel size, efficiency, and available sunlight, but typically ranges from 5,000 to 7,000 panels.
How long does it take to construct a solar farm?
Constructing a solar farm takes 2 to 4 months on average, depending on the farm size, crew size, and site conditions. However, the pre-construction planning phase is a complex process that can take 3 to 5 years to obtain all the permits and approvals required to start construction.
Getting estimates from solar farm developers
When searching for a solar farm installer or solar contractor near you, be sure to:
Look for active members of organizations like the Solar Energy Industries Association (SEIA), the North American Board of Certified Energy Practitioners (NABCEP), and the American Council on Renewable Energy (ACORE).
Check for positive customer feedback on HomeGuide and Google.
Compare 3 to 5 estimates with similar details.
Select a licensed, bonded, and insured solar contractor who has been working for 5+ years.
Get a detailed contract and warranty in hand before the work begins.
Beware of extremely low bids that can indicate low-quality work or lack of industry expertise.
Questions to ask a solar farm contractor
Ask these important questions to find the best solar contractor for your solar farm:
How long have you been in business in this area?
What solar power training, certifications, or licensing do you have?
Do you have references I can contact from past projects of comparable size and scale?
Is this property suitable for a solar farm?
What type of panels and inverters do you recommend, and why?
How much electricity can a solar farm of this size generate?
Does the estimate include all labor, materials, permitting, and cleanup fees?
What extra costs might come up when you're building a solar farm?
How long will this project take?
What maintenance will be required once the panels are installed?
Who should I contact for troubleshooting after everything is up and running?
Using our proprietary cost database, in-depth research, and collaboration with industry experts, we deliver accurate, up-to-date pricing and insights you can trust, every time.