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Initial Steps for Building a Solar Farm

Nate Vickery's picture
Consultant, Bizzmark
  • Member since 2017
  • 3 items added with 125,020 views
  • Nov 15, 2017

The popularity of solar energy is booming around the world and, in recent years, it has transformed from expensive and exotic to viable, cost-effective and plain sensible. The capabilities for harvesting solar energy have increased since 2015, and people seem to be leaning towards it more and more . People are also recognizing the change in the cost of solar energy, and there is a number of solar programs available for landowners to sell the solar energy they generate on their solar farms back to the grid. If you have a few acres of land that you want to use for building a solar farm, there are some things you should know about the development of these types of farms.

How does building a solar farm work?

Whether it be a 50 kW or a 50 MW array, there are several key questions you should ask when considering building a solar farm.

1. How many acres do I need?

Large utility-scale solar farms, such as Kamuthi Solar Power (among the world’s largest solar projects) can require up to 2,500 acres. Most of them are smaller, fitting on a few hundreds of acres, while a smaller solar farm may require just a few acres of land.

2. How will I maintain the plant?

Whether or not the land location has cleaning options or water sources will be important, because you’ll need it to maintain the efficiency of all those solar panels situated close to the ground.

3. How will electrical connection work?

Is the land situated close enough to electrical panels and power lines? The location of the land determines whether you’ll be able to feasibly connect your array to a centralized power source or the power grid.

4. Solar panels - how many do you need?

In order to determine the number of panels you’ll need for the array, you need to start with the needed kWh of energy, and then work your way backwards. For calculating this number, you’ll need to understand how much energy a particular solar panel will provide by determining the solar panel production ratio for your area. There are calculators you can use to determine the long-term savings and upfront cost estimates based on your roof type and location.

The cost of a solar farm

At the utility scale, solar farms will be at least 1 megawatt, which is a solar plant capable of supplying about 200 households. The cost per watt per solar installation (at this scale) will range based on several factors, such as available sunlight hours and location, but it’s usually around $1/watt. Thus, a 1-megawatt solar farm would cost around $1 million to install.

In comparison to typical costs of residential solar ($3-4 per watt), this figure may sound low, and it should, because the concept of the “economies of scale” is in full effect with this industry. The Kamuthi Power Plant (648-megawatt array) was bid at $0.93 per watt and can supply energy to over 150,000 households.

These types of gigantic solar plants can be as big as a town, and are more commonly referred to as “solar farms”, to reference their mere size. When it comes to smaller, community solar systems, the term more commonly used is “solar gardens”, because the system could fit onto a few acres of land, or even be placed in a backyard of a decent size.

Financing options

In order to get a solar installation built, most solar farms rely on a combination of grants and loans from both private and public sources. One source of financing can be through national programs run by government lenders (e.g. the U.S. Environmental Protection Agency and the U.S. Department of Agriculture). Public/private partnerships and private investors are typical sources of funds. A typical photovoltaic system includes solar panels, as well as inverters, transformers, and even kilometers of cables.

As for the actual construction, you’ll need to get all the approvals from local, state, and federal groups along with the electric utility. Next, you can finalize engineering and pull all needed permits from your local permitting office. They’ll require storm water runoff and erosion control plans and electrical drawings, among other things, to grant you permitting approvals. In order to get a guarantee for the construction, you should acquire a construction bond, such as maintenance or performance bond, that provides a warranty on the construction work and guarantees the contractor’s work.

List of legal documents for starting a solar farm

There are some basic legal documents that you’re expected to have if you want to start your own solar farm (in the U.S.), such as:

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

Solar in the U.S. is rapidly growing on both on-the-ground and rooftop sprawling farms. However, it’s the big solar farms that are dominating at this point. Yet, this could change, because solar is the business of the future as the world moves toward a greener and cleaner source of energy. Also, running a solar farm is nothing like running a regular farm (as the name implies) or a normal power station. It requires a more extensive and complex knowledge of how a power plan works, as well as how to harvest power from light (as a natural resource).


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Nate Vickery's picture
Thank Nate for the Post!
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