Solar Farm Income Per Acre: How Much Can You Earn?

According to the Solar Energy Industries Association, the United States has a 100 GW solar capacity that can power up to 18.9 million homes. Since 2010, solar power has had a 42% annual growth rate.

Overall, solar panels present a new and profitable way to increase your income. The industry is growing rapidly, so you can expect to find success.

Many types of solar panels vary in efficiency, cost, and electricity production. However, 40% of solar farms use around 3.5 acres to produce one GWh yearly. This value translates to 0.28571 GWh/acre/yr or 285.71 MWh/acre/yr.

Nevertheless, the amount of solar irradiance in your region will change how your panels produce. How much money does 1 acre of solar panels make?

In 2019, you could sell solar power for $27.40/MWh. As a result, you could make approximately $7,828.45 per acre. Keep reading to learn more about solar farms, how to start one, and ways to maximize income from solar farms.

What is a Solar Farm?

A solar farm is a collection of large-scale solar technologies mounted on the ground. Usually, they use solar photovoltaic (PV) panels. However, they sometimes involve concentrating solar power (CSP) or solar heating and cooling (SHC) systems.

Regardless, they find ways to harness the sun’s energy for use on Earth.

Other names for solar farms include solar power stations, parks, and plants. They function the same as a fossil fuel power plant, but without greenhouse gas emissions.

Also, solar farms differ from most residential and commercial solar systems. For instance, installing a solar farm often costs less as you usually get a bulk discount. You have greater freedom to choose the location, so you can use a spot free from tree coverage. 

Furthermore, solar farms cover more ground area and generate substantial electricity. The power produced often gets sent to the electric grid to join the energy mix from the utility.

Utility vs. Community Farms

Utility solar farms are expansive, with 1-2,000 MW capacities. On the other hand, community farms have capacities under 5 MW.

Many times, they do not exceed 100 kW. Furthermore, utility farms are controlled by utility companies.

The power from these plants goes into the company’s mix to serve many residential and commercial customers. Community farms primarily serve nearby individuals who opt into the power.

Components of a Solar Farm

Most solar farms operate with PV panels. These panels operate using the photoelectric effect. They absorb photons from the sun and release free electrons. Capturing the electrons generates an electric current that you can use as electricity.

A solar panel features many photovoltaic cells. These solar cells feature thin semiconductor wafers that get treated to create an electric field with one positive and one negative end. Electrons get loosened from the semiconductor’s atoms when photons strike the cell.

By attaching electrical conductors to the positive and negative sides of the semiconductor, you form an electrical circuit. The electrons are captured in the circuit’s electric current (electricity). 

This electricity is in the direct current (DC) form. It enters the central inverter on the solar farm that transforms it to alternating current (AC) electricity. The AC power enters a medium voltage (MV) transformer to boost the voltage.

Lastly, the electricity enters the distribution system. It may also pass through a recloser, breaker, or disconnect switch and metering. Other components you might need include:

• Batteries
• Charge controllers
• Wiring

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Pros and Cons of Solar Farms

Here are some of the advantages and disadvantages of solar farms.

Pros

• Offsets carbon emissions and reduces your carbon footprint
• Using solar power can decrease or eliminate your energy bill
• Humans will never run out of sunlight in their lifetime, so you will always have power
• You can sell the extra power produced for profit
• They have virtually silent operation

Cons

• Many people do not like the aesthetics of solar farms, so it may detract some homeowners
• The manufacturing of photovoltaic cells involves toxic chemicals and mining materials
• Solar thermal farms require a lot of water to function and can strain water resources
• They can take up a lot of space and displace plants and animals

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How to Start a Solar Farm

Creating a solar farm requires a lot of income, planning, and hard work. However, you will likely make a sizable income from solar farms once in operation.

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1. Understand the Capital and Operating Costs

Solar farm costs are one of the biggest boundaries toward further adoption. What is the cost of a solar farm per acre? Usually, the capital cost is $0.82-0.95 per watt for utility farms. 

Consider the value above of 285.71 MWh/year for one acre. This amount is equivalent to:

285.71 MW-hyr*1365 yrday*124 dayh=0.03262 MW=32.62 kW=32,620 W

At this rate, you will pay between $26,748.40 and $30,989 for solar panels per acre. You will also need to pay for the other components, such as racking equipment, inverters, batteries, transformers, and wiring.

You will likely pay $400,000-$500,000 per 1-acre solar farm. For the most part, solar farms do not require much maintenance. On average, you must pay between $15-$25/kW/yr. One acre amounts to about $489.30-$815.50 annually.

See Related: How to Store Solar Energy for Later Use

2. Plan the Farm

You need to figure out the specifics when planning for a solar farm. For instance, you use many different types of solar cells that come at varying costs and efficiencies. You might opt for:

• Monocrystalline
• Polycrystalline
• Amorphous and micromorph silicon
• Cadmium-telluride
• Copper-indium-selenide
• Copper-indium-gallium-diselenide
• Concentrating photovoltaic
• Organic photovoltaic

Try to work with an expert to conduct a cost-benefit analysis and see if installing a specific type of PV panel is feasible and profitable. Other aspects of your plan include the location, land used, scale, positioning of the panels, quantity of panels, power produced, specifications, and needed components.

Project proposals typically have cost estimates and an estimated return on investment (ROI). Perform calculations for at least ten years of business to determine when you will start profiting.

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3. Fulfill the Legal Requirements

You need to register your farm with the government to become legally recognized. To do so, you will need to register a business name. Make sure you have completed these basic legal documents, potentially with the help of a lawyer:

• Apostille
• Business plan
• Certificate of incorporation
• Company bylaws
• Employment agreement
• Insurance policy
• Memorandum of understanding
• Non-disclosure agreement
• Operating agreement/operating agreement of LLCs

While every state has different specifications, you will need to obtain licenses and permits, such as:

• Contract labor license
• Insurance policy
• Land conversion certificate
• Operating agreement

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4. Find a Location That Meets the Land Requirements

The position and location of the panels will determine the amount of power produced. You can have the highest-rated panels available, but facing them in the wrong direction under a shady tree won’t produce any power. The location also impacts the cost of construction.

Look into the proximity of the farm to grid infrastructure. If you want to sell excess power, it helps to be close. Also, find an area and position that will absorb the most solar irradiance.

This calculator will help you determine the best position for your geographical region. 

Avoid shady spots, and consider the quality of the soil. You want it to be hardy enough to handle the equipment installed on it while saving fertile soil for agriculture.

Check out the demand for renewable energy by nearby utilities and homeowners. If you rent the property, see the solar farm lease rates for the land.

See Related: Best Business Loans for Solar Energy

5. Build the Structure

After you figure out the semantics, you can start building the structure. Buy all of the necessary components and install them on the land.

Ensure you work with professional installers to mount them properly in the optimal orientation. Most installation firms also offer maintenance to help you sustain long-term projects.

Look for a firm that you can use throughout the lifecycle of your panels to simplify the process.

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6. Release Proposals

To sell the generated electricity, you will want to craft proposals. Reach out to firms, industries, and people to discuss your services. Figure out how much you will charge for your electricity, payment options, and service costs.

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Potential Gains and Profitability of Solar Farms

Here we will look at existing plants to determine the approximate solar farm income per acre.

Pavagada Solar Park is the largest solar farm in the world, with a 13,000-acre area. It produces about 2,050 MW each year. The companies it sells to save $1.7 million per hour or about $7.4 billion a year from a 12-hour day.

Many farmers in the United Kingdom have begun converting their infertile soil into solar farms. While the UK is not known for its sunny weather, plenty of people have profited from selling solar electricity.

For instance, Mandy Wilson has a 30-acre solar farm. She earns about £30,000 each year on rent from the panels.

Your solar farm profit per acre will vary based on the size and efficiency of your array. How much money does a solar farm make? On average, you might profit around $21,250-$42,500 per acre.

Other potential gains from operating a solar farm include:

• Guaranteed steady income from a solar land lease throughout the term, which is usually 20-25 years
• Benefitting residents with new tax revenue because the local government can direct the funds to improve community services
• Improved air quality, reduced pollution, and fewer harmful emissions compared to nonrenewable energy

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How much does a 1-acre solar farm cost in the USA?

A 1-acre solar farm is a plot of land used to install solar panels to generate electricity. The cost of a 1-acre solar farm in the USA varies widely depending on several factors such as location, solar panel efficiency, and installation costs. The average cost of a 1-acre solar farm in the USA can range from $200,000 to $500,000 or more.

How to Boost Solar Farm Income Per Acre

By understanding the factors contributing to solar farm income, you can determine how to maximize the solar farm income per acre.

Size and Location

You can install more solar panels if you acquire the rights for a larger landmass. The wider your solar array, the more electricity you can generate and sell. However, you will likely face limits on the size of your farm.

While solar farming does not have a detrimental environmental impact, you must check with local ordinances. Also, survey the residents to see if they approve of a solar farm.

Try to construct the largest farm you can in an area with plenty of solar irradiance and compliant residents. You might have better luck in areas with much-unused land and few residents.

Also, check out the property taxes in various towns and states. Consider the local costs of labor and land as well. Overall, you need to figure out the most affordable location for your farm.

Areas with a higher going rate for solar electricity are also ideal for profit-making. These places have higher demands for electricity. While electricity will not have zero demand in the foreseeable future, it does vary based on population and standard of living.

External Financing

You can profit sooner using external financing to pay for the installation. Government tax credits and incentives can cover some of the costs. Also, check out low-interest loans.

Panel Type

While older panels with less efficiency will cost less upfront, they will likely cost you in the long term. Work with engineers and materials scientists to determine which panels provide the most efficiency in your price range.

Spending a little more on high-quality panels upfront than replacing the system more frequently will be worth it. Nevertheless, you can perform a return on investment calculation to see which option is best for you.

Maintenance and Operation

You can minimize the frequency of needing maintenance on your solar farm by keeping the panels clean and performing regular inspections. Also, look for an experienced manager to ensure these tasks are performed regularly.

Try to stay focused on maintaining your solar farm so that you can increase solar farming profits. Since this business is one of the most profitable at this time, you are likely to experience a profit from it.

Marketing

Nobody will purchase your electricity if nobody knows about your humongous solar farm. You can advertise to utilities, companies, and residents to supply some energy. Your audience does depend somewhat on the size of your farm.

Develop a loyal customer base who can provide a testimonial for your business. That way, you can improve your authority as your business matures.

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Are solar farms profitable?

Yes. According to our calculations, you can make approximately $7,828.45 per acre each year. Since most utility solar farms have a 5 MW size (about 20 acres), you will likely make around $156,569 profit from your farm.

Since solar projects are some of the fastest-growing renewable energy solutions, you are almost guaranteed to make a profit.

If you want to start solar farming, try to make a business plan to see how much it will cost to build, operate, and maintain a plant.

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