A good number for solar farm cost per acre is typically $500,000 here in the U.S. You will find that typically a megawatt size solar farm system will need approximately five acres of land to be oriented and sited properly. This amount of acreage is also a good number if using any type of tracking systems on your panels to increase production levels is your goal. A one megawatt solar farm project will typically cost somewhere around $2.5 Million U.S. dollars and require a site of no less than about five acres. Building solar farms that have higher output rates while requiring less ongoing maintenance is what our company excels at.
With the rapid growth in energy needs around the globe and the demand for clean energy, the solar energy industry has seen tremendous growth in the recent past. More and more solar power plants are being set up to cover the increasing demand for power. In this article, you will find all the necessary information on solar farm land requirements as well as their costs.
Solar Farm Land Requirements: How Much Land Do You Need?
For one to set up any solar plant, whether it’s on the ground or rooftops, they will require substantial space. If you want a solar plant that will produce enough solar energy, then the area is one of the main prerequisites. Now, are you aware of the solar farm land requirements in your region?
People are shifting to solar energy due to its excellent sustainability advantage over the other sources of energy like fossils. Nevertheless, this source of clean energy still faces some drawbacks.
One of the major disadvantages of solar as a source of energy is its aspect of being highly diffuse.
For you to collect enough energy, it requires a considerable amount of space, which sometimes may not always be available. For example, a 100 MW solar power plant requires 10% more in area than a thermal power plant of the same size.
The difference in area size requirement implies that for you to set up a solar farm, it will cost you more in space, than setting up a thermal power plant.
If you have been thinking about this, and maybe you want to set up that solar plant, then this article is an excellent guide for you.
Whether you have a plot or you want to lease for such kind of a project, having accurate data will help you in planning and decision making.
In this piece, we will explore all the possible solar farm land requirements and any other concept that comes with it.
What is a Solar Farm?
A solar farm is an extensive photovoltaic system, mainly built to supply commercial solar power into the national electricity grid. It comprises of a large, decentralized solar panels installation that aims to provide its power to the power grid at the utility level.
The roof-mounted solar plants differ from the decentralized solar plants in that they don’t supply power to the local or individual users.
Some solar farms are usually properties of utility companies and act as assets to supply power to other properties in the area.
While individuals with solar panels target to produce energy for their homes, these large-scale utility solar farms targets to generate electricity to cater to thousands of businesses and homes, in addition to utility-scale solar farms, large-scale solar projects can also be undertaken as community solar farms.
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What is a Community Solar Farm?
In recent years, more people have come to realize that they can shift to solar power even without installing solar panels. This has been made possible by the emergence of solar community projects which we sometimes refer to the as roofless solar or solar garden.
With this type of a solar project, the power generated is shared among multiple households or families.
Mostly, the solar panels are ground-mounted on an extensive area which spans over several acres. Community solar farms are similar to utility solar farms except that they are mostly smaller in size.
Unlike in utility-scale, customers here either buy a power share of the solar garden or lease energy from the system.
In this manner, they tradeoff their utility payments for community solar payments, which typically costs lower.
Solar Farm Cost Per Acre
Multiple factors will influence the actual cost of setting up a solar farm. These factors may include the location of the farm, available sunlight hours, and more. Ideally, a solar farm in the utility-scale level will be at least 1 MW (megawatt) in size. This size of a plant can supply power to as many as 200 households.
According to First Solar, which is a top commercial power provider, solar installations at such a size can cost around $1 per every watt. In total, this will make $1 million for a 1-megawatt solar plant.
Sounds strangely cheap? Yes, it should.
When comparing this to the cost of a residential installation which can cost around $3 to $4 per watt, this may seem cheap.
The difference in price is brought about by the economies of scale concept. Therefore, the larger the plant, the less the cost of installation.
The above cost is non-inclusive of the license fees, and value of the land. For example, the solar farm land requirements for a 1-megawatt solar plant is around 5 acres.
On average, 1-acre solar farm, cost about $500 per month to lease in the United States. The cost of land for 1 MW plant will, therefore, translate to $2,500 per month on average.
Solar Farm Acres per Megawatt
When calculating the land size needed for solar plant installation, we must look at the things that will consume space in the facility. The two main items that consume space here are the solar panels and the structural components. From these two, one can now make a reasonable estimate of the area needed.
For example, for a 1 MW solar power plant installation, the solar farm land requirements would be around 4 acres, when using a crystalline technology.
When we use thin-film technology, a 1MW plant will require an average of 4.5 to 5 acres of land. In other terms, we can say that for each 1 kW of solar panels, you need 100 sqft of an area on average.
However, this is a rough estimate as space can also be influenced by the efficiency of the panels and technology. When it comes to solar energy per acre, a photovoltaic solar plant which on average produces 1 GWh per year, will require around 2.8 acres of land. Therefore, we can say that for every acre, the plant produces an average of 0.357 GWh or 357 MWh of energy per year.
The higher the efficiency of the panels, the less the number of panels needed to produce the required amount of power. Fewer solar panels then mean less land space used.
The level of efficiency causes a significant difference in solar farm land requirements between crystalline and thin-film technology. Crystalline solar panels have around 18% of efficiency level while the thin-film technology offers approximately 12% efficiency.
The difference means that 1 MW of solar power plant with thin-film technology will require more land than the crystalline technology by about 50%.
Solar Farm Lease Rates
Solar energy production is currently among the most lucrative ventures in America due to the rocketing demand for green energy. Based on a report by SEIA (Solar Energy Industries Association), solar plants offered the largest source of clean energy in 2016. It was way over other new energy production rivals including wind and natural gas.
The 2018 SEIA report indicated that for six years in a row, solar was among the top two new power generating capacity sources in the U.S.
During the fourth quarter of 2018, the solar market in the US installed a solar PV of 4.2 GWdc. The amount signifies an increase of 139% from what was mounted in Q3 2018 and around a 4% increase from installations made in Q4 2017.
With this kind of increase in demand for solar electricity, the land leasing rates have also skyrocketed. The increased solar production capacity has made the US the 4th largest solar producer in the world.
With this perspective, solar farming has gained traction over time, creating more valuable financial opportunities both for the landowners and investors.
So how many acres for solar will feed this growing demand? The answer depends on different factors.
Looking now at the cost per acre, it will cost you an average of $2,000 per acre for a 10-acre site near a substation that is just outside an urban area. For land in rural areas such as California or North Carolina, you can get an average price of $1,000 or more per acre.
In that area, the demand is high for small sites. Expansive tracks of land such as over 100 acres for large solar power plant projects will require a $300 – $500 per acre in Texas.
In the Southeast, the same size of the land will go for about $500 per acre per month. In places like Virginia and Illinois, large farms can fetch over $800 per acre, although dependent on multiple factors.
Factors Affecting Solar Farm Lease Rates
As we have seen, the above land lease rates are not constant. They are affected by numerous factors, which include:
1. Size of the Project
The first factor that influences the land lease rates is the size of your project. Large projects require more space, and therefore, the economies of scale will apply. For example, land lease per acre for sites below 30 acres will be higher than the rate of leasing above 100 acres in the same region.
The primary reason for this difference is the electrical infrastructure, as well as landowners’ reward and risk.
Small solar power projects, especially under 3 MW, benefit from the availability of substations nearby. Therefore, buying new and expensive equipment to add a small amount of power into the grid is not economical.
It, therefore, means that small developers will pay more to have the right site.
Also, the liabilities and the upfront time required to start either a small or large project is the same. This increases the landowner’s resistance. That is because they don’t want construction on their land, which does not meet their financial reward threshold.
They don’t wish to long-term contracts that are not economically ideal for them hence the higher rates.
2. Area Land Prices and Alternative Uses
The current land prices and the availability of beneficial alternative use for the land can significantly affect the cost of leasing rates. For instance, a vineyard farm in California would require more than a cattle ranch in Texas.
All this is due to the value the landowner attaches to his farm. They set a price depending on the amount of profit they expect to earn from their farm.
Although solar energy investment offers a higher value for the use of land, the same factor also raises its cost. You will have different leasing rates in different areas, even within the same state. Irrigated areas in one state will cost more than non-irrigated sites in the same state.
Based on the 2018 USDA’s agricultural land prices report, it is evident that the current use of land is a determinant of the lease rate.
According to this report, the average land price across the US is around $3,140 per acre.
The cost can go to as high as $13,800 per acre in Rhode Island. In New Mexico, the cost can go as low as $530 per acre.
Agricultural land has become a significant target for land developers in the US. Therefore, there are substantial differences in lease rates across the states.
3. The Demand and Supply of Solar Sites in an Area
It’s no brainer that the forces of demand and supply have a significant effect on the price of any item. This is no different in the case of solar farm lease rates. If the need for ideal sites is higher than its supply, the price of a lease will rise.
The availability of suitable land for solar plant installation may be affected by various factors, including natural land constraints. For example, if we consider a place like Florida, the area is full of wetlands.
Also, the insurance rates are incredibly high, especially near the coastlines. On the other hand, a place like Virginia has a mountainous western part, while the eastern side is urbanized.
All these limits the amount of available land that can fit large solar farms. Also, areas where solar installations started long ago, can experience a shortage of land.
That’s because the best land may already have been taken. When the supply is less than the demand, the solar farm lease rate will, in most cases be high.
Conclusion on Solar Farm Land Requirements
If you have the right information, you can make critical decisions when it comes to solar project investment. Different sizes of solar plants require different sizes of land for set up.
I hope this article offers you useful information on all the solar farm land requirements for your project.