solar farm

Solar farms: what you need to know

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The solar industry has seen rapid growth over the past decade, and a major contributing factor has been the surge in solar farms popping up across the globe. In this article, we’ll explain the different types of solar farms, how much they cost and how to start one.

What is a solar farm?

A solar farm, sometimes referred to as a photovoltaic power station, is typically a large solar array supplying electricity to the power grid. Many of these massive arrays are owned by utilities and are another asset for the utility to supply power to properties in their coverage area.

A broader definition of solar farms could include other ground-mounted solar arrays large enough to supply power for many households. This general concept of a solar farm could be associated with both residential community solar and larger utility-scale solar.

Types of solar farms: utility-scale and community solar

There are two main types of solar farms around the country: utility-scale solar farms and community solar farms. The main difference between the two is their customers, as utility-scale solar farms sell directly to utilities, while community solar farms sell directly to end-consumers of electricity, such as homeowners and renters.

Utility-scale solar farms

A utility-scale solar farm (often referred to as simply a solar power plant) is a large solar farm owned by a utility that sends electricity to the grid. Depending on the installation’s geographic location, the power produced at these farms is either sold to wholesale utility buyers through a power purchase agreement (PPA) or owned directly by an electric utility company. Regardless of the exact structure, the original customer of the solar power is a utility, who then distributes the generated electricity to residential, commercial, and industrial customers connected to the grid.

Community solar farms

The idea of community solar has taken off in recent years as more homeowners have realized that they can go solar without putting solar panels on their own physical roof. A community solar farm—sometimes referred to as a “solar garden” or roofless solar —is a farm whose electricity is shared by more than one household. In most cases, a community solar array is a large ground mount installation that spans one or many acres.
Visually, these solar gardens resemble utility-scale solar farms, but they are often smaller in size. Customers can either purchase a share of a solar garden and own that portion of the overall array or they can lease energy from the solar system and, in a sense, replace their monthly utility payments with monthly community solar payments that are typically at a lower price. You can find community solar projects in your town or state in our Community Solar Marketplace.

How much do solar farms cost to build and install?

Solar farms at the utility-scale will typically be at least 1 megawatt (MW), which is a power plant capable of supplying some 200 households. Though cost will range based on a number of factors like location and available sunlight hours, top commercial provider First Solar has stated that the cost per watt for solar installations at this scale is somewhere around $1/watt. Therefore, you can assume that a 1 MW solar farm would cost roughly $1 million to install.

If that value sounds unusually low in comparison to typical costs associated with residential solar ($2 to $4 dollars per watt), it should. The “economies of scale” concept is in full effect with the solar industry.

What is the largest solar farm in the world?

The largest solar system installed in the world is the Pavagada Solar Park, which was fully completed in 2019 in India. The 2,050 MW array can supply energy to hundreds of thousands of households.

It should be clarified that these massive solar plants are more commonly referred to as “solar farms” than smaller ground mount arrays often see with community solar projects. Solar systems at the scale of the Pavagada Solar Park are the size of entire towns and thus take on the name “solar farm” to reference the size of the install (see above image). The term more commonly used with community solar is “solar gardens” due to the fact that the system could be only a few acres and could even live in someone’s backyard.

Rooftop solar vs. solar farms

Joining a community solar farm can be a great option if your roof isn’t right for solar or don’t want solar panels installed on your property. Even if your roof is good for solar, enrolling in a community solar project can still be worth it if the costs are low and the contract terms are beneficial. As community solar projects become more common and the contract terms become more consumer-friendly, solar farm options will compete even more with rooftop solar. However, each individual property has unique challenges and considerations, and there’s no easy way to determine if you’re the right candidate for joining a solar farm.

Check out our comparison of rooftop and community solar for a more in-depth look at how the two options stack up against one another.

Building a solar farm: how does it work?

When developers are considering building a solar farm, whether it be a 50 kW array or a 50 MW project and larger, here are five key questions they’ll ask:

1. How many acres do I need for this size of a power plant?

A smaller solar farm may only require a few acres of land whereas a large utility-scale solar farm can require hundreds of acres (for reference, the above mentioned Kamuthi Power Plant spans 2,500 acres).

2. How will electrical connection work?

You’ll need to consider the location of the land and whether or not it’s situated close enough to power lines and electrical panels to feasibly connect your array to the power grid or to a centralized power source.

3. How will I clean and maintain the plant?

Whether or not the location has water sources or cleaning options will be important in order to maintain the efficiency of so many solar panels that are situated so close to the ground. The Kamuthi Power Plant, for example, is constantly cleaned by a team of solar-powered robots.

4. How many solar panels will I need?

In order to make sure you’ll be able to meet the expected energy demand with your solar farm, you’ll need to first start with the needed kilowatt hours of energy and work backward to get a number of panels you’ll need for the array. To calculate this figure, you’ll need to determine the solar panel production ratio for your area to understand how much energy a certain solar panel wattage will provide. Check out our full explanation on how to do this type of calculation.

5. What’s a good price for my solar installation?

For larger arrays, there will likely be significant discrepancies between quotes from various contractors, so it will be important to get a few bids from different companies. Solar Power World compiles a list of top solar developers each year that can be a helpful starting point.

If you’re in the early stages of considering a residential solar installation, rather than a solar farm, our Solar Calculator can offer a free estimate for what the array might cost, when you could break even on the investment and how much it could save you over time. For those interested in the community solar options in their state, check out our network of Community Solar Providers.

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About Jacob Marsh

Jacob is a researcher and content writer at EnergySage, where he focuses primarily on current issues–and new technology!–in the solar industry. With a background in environmental and geological science, Jacob brings an analytical perspective and passion for conservation to help solar shoppers make the right energy choices for their wallet and the environment. Outside of EnergySage, you can find him playing Ultimate Frisbee or learning a new, obscure board game.

86 thoughts on “Solar farms: what you need to know

  1. T Rodgers

    We have 5-6 acres (commercial business) we want to monetize to offset our utility burden. Is leasing the property to a solar developer better than self-managing and selling back to the utility company?

  2. John N Wozniak

    Helo Jacob
    I have around 40 acres of arable land on high flat ground in Somerset co. Pa.
    The county township asso had an informational meeting as there are solar companies interested in leasing land.
    Assuming all permits, access to the power grid , etc. is a go
    What would be a ballpark cost to start with five acres and build out from there over time.
    I would be the prime contractor and own the whole shebang!!

      1. Christopher Nichols

        land. Investors. Learning renewable energy credits. Learning tax liability and credits like federal itc for solar and macrs depreciation table. Commercial solar installers. It will cost millions of dollars per Megawatt which will take up about 2.5 acres per megawatt watt.

    1. Christopher Nichols

      Might fit a megawatt per 2.5 acres. We install commercial at $2.2 a watt with structures. So $2 million times 2.2 so about $4.4M not including costs to replace equipment or whats called operating and maintaining which could run about $60k a year in addition per MW. So $4.4M plus $132,000 a year in operating and maintaining cost for 5 acres. Don’t worry we do NOT offer financing or leasing equipment at that size. So unless you have $5,000,000 lying around and want to get real savvy with learning renewable energy credits in your area and dc/ac conversion ratios to see what a MW will produce, I’d pick a different money making project. 40 acres would be $35,000,000 and $960 annually in operating and maintaining costs. There are MASSIVE tax credots though to drive cost down and you will make all your money nack depending in your REC’s in about 5yrs.

  3. Keva

    Wow! This us very interesting. I live in Texas can you point in in the direction of how to start one of these farms?

  4. Chuck DeBruyne

    Can you send me in the right direction on how to and where to start to get permits and to start a small scale solar farm. I am in the construction field and have the electrical contacts to install all the solar products and set up the land. What I am looking for is the guidance to get the proper proposal and permits to be able to connect to the grid and sell the power


    Greetings, I would like to start a solar farm, approximately how much does it cost to build a plant that supply electricity for 1000 households. I have 20 hectors of land available. Also is the land enough, please assist

  6. Atigbi Emmanuel Ayomiku

    Hello there! I’m very much interested in starting up a solar farm here at my local neighbourhood in supplying 24/7 electricity for a thousand homes. Is there any way you could be of help to me..


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