Determining the costs of starting a solar farm involves several key steps and considerations. This high-level overview will provide you with the main aspects of establishing a solar farm, including materials needed, operational setup and configuration, and the associated costs for a one-acre solar farm.
Materials Needed
The following is a list of the basic equipment you’ll need to build a solar farm. Naturally, costs will vary with the type and quality of the equipment you choose for your solar farm.
1. Solar Panels
These are the primary components of a solar farm. They convert sunlight into electricity. The type and efficiency of solar panels can vary, and you should choose those suitable for your specific project. If you’d like to learn more about the different types of solar panels, here is a link to a comprehensive guide on the equipment.
2. Mounting Structures
Solar panels need to be mounted securely to something. The choice of mounting structures depends on the available land or building space. While there are many types of solar mounts, the most common are ground mount, rooftop, and parking canopy.
3. Inverters
These devices convert the direct current (DC) produced by solar panels into alternating current (AC), which is the type of electricity used in buildings and the power grid.
4. Electrical Equipment
This includes cables, wiring, switches, and other components required to connect the solar panels, inverters, and the electrical grid.
Finally, if you’re connecting your solar farm to an electrical grid, you don’t necessarily need batteries to store your electricity. However, you will need a battery and charging system if you intend to use your solar farm to power your household or a business operation.
Operational Set Up and Configuration
Besides the necessary materials, there are a variety of setup considerations that could also influence the total cost of starting your solar farm. Because of their variability, we are not figuring these into our total expenses for setting up a one-acre solar farm below for our purposes here.
1. Site Selection
Naturally, you’ll need to identify a suitable location with ample sunlight exposure and sufficient space for the solar farm. Consider factors such as shading, orientation, and proximity to the electrical grid.
2. Permitting and Regulations
Once you’ve identified a suitable location, you’ll need to research and comply with local regulations, zoning requirements, and permits required for constructing and operating a solar farm in that area. On the positive side, part of that research may uncover generous tax incentives available by the federal or state government for investing in renewable energy.
3. Design and Engineering
After any required permits have been secured, it would serve you well to work with an engineer to develop an engineering plan that includes the layout of solar panels, electrical design, and interconnection details. Some dedicated professionals known as solar engineers specialize in advising at this stage of solar farm setup. Collaborating with one will help optimize your solar farm’s energy production capabilities.
4. Installation
With an engineering plan to follow, you can then construct and install solar panels, mounting structures, inverters, and electrical equipment. Ensure proper wiring and connection to the electrical grid.
5. Grid Connection
Before your solar farm goes “live,” you’ll also need to coordinate with the local utility company to establish a connection between the solar farm and the electrical grid. This may involve agreements, inspections, and approvals.
6. Monitoring and Maintenance
While not part of the setup per se, you’ll also want to establish a monitoring system to track the performance of your solar farm. Regular maintenance, including cleaning the panels and checking electrical components, is essential to ensure optimal efficiency.
So What’s It Going to Cost?
The costs of setting up a solar farm can vary depending on various factors (many of which have been outlined above), such as the size of the installation, location, and equipment prices.
According to the Solar Energy Industries Association (SEIA), costs for utility-scale solar installations can range from as low as $0.80 per watt to as high as $1.36 per watt.
Given that a one-acre solar farm can produce approximately .5 megawatts (or 500,000 watts), a one-acre solar farm will cost between $400,000 and $680,000 to install.
This cost includes expenses related to engineering, procurement, and construction. However, it’s important to note that prices can fluctuate, and obtaining specific quotes and conducting feasibility studies for accurate projections is recommended.
For that investment, the average one-acre solar farm makes between $21,250 and $42,240 per year, depending on the price of electricity where the solar farm is located.
Of course, it’s important to remember that these profits can vary wildly on a project-by-project basis, thanks to some of the factors discussed above. Actual profits can be much lower or, indeed, much higher.
Another option, if you already own the land where you’re considering installing a solar farm, is to lease the land out to a solar company instead. Annual profits will be much lower, but you won’t have to do all the work and pay all the costs associated with setting up your own solar farm.
Land leases to solar companies tend to pay between $300 and $2,000 per year per acre.
If you’re wondering if your area is well-suited to solar power–or if you’re also considering a household solar installation–you’ll want to check out your area’s “Solar Score” by heading to CompareElectricity.com/solar.