The renewable energy industry is booming globally. The solar sector has seen a 49% of average annual growth rate in the past decade itself. One of the contributing factors for the rapid expansion of the solar market is due to the rise in solar farms development.
This article talks about how to start a solar farm and answers the top FAQs.
What is a Solar Farm?
Also known as solar fields, a solar farm refers to a vast area consisting of multiple types of solar panels. Just like the solar panels mounted on rooftops, these farms serve the same purpose, that is to generate electricity.
Most solar arrays, known as utility-scale solar farms, supply power to energy companies instead of local end-users. Another solar project concept is a community solar farm, sometimes referred to as a solar garden. Homeowners within the coverage area share the electricity generated from the solar farms.
How do solar farms work?
To start a solar farm, it’s crucial to understand how it works. Solar panels generate electricity directly from the sun’s power. When the sun rays hit the panels, it activates the semiconductors within the panels to create a direct electrical current. The farms operate by delivering the energy produced to national grids for household distribution.
Solar farms pros and cons
Solar farms are established to harness power from the sun on a massive scale. There are boundless opportunities and profitable potentials when it comes to setting up a solar farm. Yet, they are not without shortcomings. Here are the key advantages and disadvantages of solar farms to consider.
Solar farms advantages:
Solar energy is one of the cleanest and most abundant energy sources available to us to date. Not only do solar farms distribute electricity without polluting water or land, but they also help global warming by offsetting carbon emissions.
2. Low maintenance
Unlike crops and animal farming which requires intensive labour, solar panels require only minimal care after installation. Owners need only take note of occasional cleaning of the units to maintain high productivity.
3. Zero noise pollution
Solar farms operate with no noise. The only noise you might hear is the whirl from cooling fans within the solar equipment, given that the environment is near silence.
4. Wildlife conservation
Solar farm projects do not pose significant threats to the survival of wildlife. In fact, it creates a better habitat and improves water quality for them when native groundcovers are used.
Solar farms disadvantages:
1. Take up huge land space
In a solar farm, multiple panels are required to produce massive amounts of electricity. This explains why solar farms are so large and usually developed in rural areas.
2. Expensive to build
While the prices of solar panels have decreased over the years, the initial cost for a large-scale project is still expensive.
3. Weather dependant
Rain or shine, panels can continue to generate power. However, the production efficiency becomes limited. It is advisable to develop solar farms in sunny regions for more significant solar potential.
4. Solar panel waste
Most overlook the hidden environmental impact of solar panels when their life cycle ends. The panels can be recycled, but there will still be remaining wastes. Thanks to technological advancements, some solar panels now have up to 96% of recycling efficiency.
What does it take to start a solar farm?
There are several key questions asked by many who are interested in starting a solar farm.
Solar farm land requirements: how much land do I need?
To build a solar farm, at least 5 to 7 acres of a sunny platform is used for the solar panels to produce 1 MW of electricity (GTM research). This includes the additional surrounding space that will be required for non-panel solar equipment.
However, bear in mind that this is just a rough estimate. The land required largely depends on the efficiency of the panels as well as the technology adopted.
Regarding the solar power per acre, a 2.8-acre land is needed for a photovoltaic solar plant which on average produces 1 GWh per year. When highly-efficient panels are used, it reduces the need for more panels which means lesser land space is required.
How much does a solar farm cost?
Several factors impact the cost to build a solar farm, including the size and location of the farm, available sunlight hours, and the efficiency of the solar panels. Starting a utility-scale solar farm would typically require 1 megawatt (MW).
Figures from SEIA in Q1 2020 shows that solar farm installation costs range from $0.82 to $2.83 per watt. Thus, a 1 MW solar farm cost per acre would be between $820,000 and $2.83 million.
For a more comprehensive solar farm cost breakdown, the overall system cost such as equipment, taxes, and shipping must be taken into account.
How much money can a solar farm make and how profitable is it?
Solar farming profits is perhaps the most considered factor by those who are looking to set up power plants. In terms of revenue, the average solar farm profit per acre ranges from $21,250 to $42,500 annually. Of course, these figures vary on a project-by-project basis.
What is the solar farm return on investment (ROI)?
It takes a huge minimum investment of $1 million to start a solar farm. However, the ROI of up to 16%, is definitely worth the investment. On average, solar farm owners can expect to start receiving a payback in 8.1 to 8.2 years.
How to Build a Solar Farm Step by Step
If you are someone who wants to start a solar farm, there are a few necessary steps to set the foundation for success.
1. Do your research.
Before you begin, go through the key questions above and dive deeper into the industry landscape. Conducting thorough market research will help you better picture the reality of developing the project.
A few ways to do this include researching on Google, reaching out to experienced professionals, researching key people, and keeping up with relevant news.
2. Write a business plan.
A solar farms business plan is a must-have to establish the foundation for your project. It serves as the blueprint for structuring, running, and maintaining the solar panel farm. The plan gives clarity on the cost to build a solar farm and an approximate ROI.
3. Pick and register a business name.
To become a legally recognized entity, you must register with the government. Choose a suitable name that reflects your solar business and make sure the name is available. You’ll also want to register a domain name that is brief, simple, and SEO-friendly.
4. Get licenses and permits.
There are also some necessary permits to be legally compliant, such as:
- Operating agreement
- Insurance policy
- Land conversion certificate
- Contract labour license
The permitting process depends on where you plan to develop your photovoltaic power station.
5. Find a suitable land.
The efficiency of a solar farm depends on the choice of location. It can affect the overall cost of construction as well as the power produced. Potential future solar farm owners should get to know the area well prior to purchasing the property. A few things to take note of are:
- Proximity to grid infrastructure
- Amount of sunlight
- Quality of soil
- Renewable energy demand
- Solar farm land lease rates (for those who want to lend out property to a third party solar developer)
Understanding the land gives you a heads-up of the potential problems you might encounter.
6. Set up the structure.
After figuring out the basics, it’s time to decide on the array mounting. A successful deployment of the photovoltaic power structures considers the potential challenges of implementation. The structure is key to ensuring optimum operability and value in the long run.
Moving forward, solar farms are rapidly dominating the renewable energy industry and will soon be replacing fossil fuel power.
Solar prices will continue to drop as solar farm developers explore ways to reduce costs. More farms will be established in the future and enable solar to reach many more parts across the globe.
Read our article on “Solar Farms in Australia: Present Scenario and Upcoming Developments“