Solar Farms: Everything You Need to Know

By Mohamed Fared

Last Updated:

Right now, there are over 2,500 solar farms in the United States alone.

These farms are powering more than 255,000 American homes and it’s estimated that they’re offsetting the emissions of more than 2 million cars.

That sounds pretty good but what are solar panel farms exactly?

Well, solar farms are simply solar power plants.

They consist of thousands of solar panels working together to generate clean electricity to power homes and businesses.

If you need to learn more on what are solar farms and how they work, then you are just in the right place!

In this blog post, we will discuss everything you need to know about solar power stations.

We’ll cover the types of solar farms, how they generate electricity, how much land they require, and how much money they make.

So, let’s get started!

Key Takeaways

  • A solar farm is a large area of land, usually tens of acres covered with solar panels to collect the sun’s energy and produce electricity.
  • There are two types of solar farms — utility solar farms and community solar farms
  • Utility solar farms are large-scale solar farms built by utility companies to sell the generated electricity to consumers.
  • Community solar farms are usually built by community members and small businesses to cover their local energy needs.
  • You need about 5-10 acres of land per Megawatt (1,000 kW) of solar power.
  • Solar farms cost between $850,000 and $1.07 million per Megawatt of power.
  • A 1-megawatt solar farm can make $121,263 per year.
  • The largest solar farm in the world is the Bhadla Solar Park in Rajasthan, India.

What Is a Solar Farm?

Solar farms, also known as solar parks, are large areas of land covered with thousands or millions of high-efficiency photovoltaic panels arranged in long rows to capture the sun’s energy and convert it into electricity.

You can think of solar farms as regular farms but instead of growing crops, they “farm” electricity and sell it to the national electricity grid to power homes and businesses.

In other words, it’s a power plant that uses solar panels instead of traditional fuel sources like coal or natural gas.

What Are the Different Types of Solar Farms?

Solar farms fall into two main categories: utility-scale and community solar parks.

There isn’t much difference in how they operate — they are both long arrays of solar panels that harvest the sun’s energy and convert it into electricity.

However, there are a few differences in the size and purpose of these two types.

And in this section, we will go through some of them.

1. Utility-Scale Solar Farms

Utility-scale solar farms are those huge solar arrays that cover massive areas of land with hundreds of thousands or even millions of solar panels that you often see on the news.

These solar parks are typically built and operated by private companies or utilities, and their main purpose is to sell this electricity to consumers or other companies through the national grid.

In other words, they are solar power plants that operate for profit.

2. Community Solar Gardens

The other type of solar farm is a community solar farm, also known as a solar garden.

Unlike utility-scale parks, these farms are built to generate electricity for a local community or a neighborhood.

Here is how it works:

  • Multiple households and businesses in the community chip in together to build a small solar farm or buy a share of a larger solar power plant.
  • Each contributor receives energy credits, depending on how many shares they bought and how much electricity the solar garden produced.
  • Contributors can then use this energy credit to offset their electricity bills or sell these credits back to the utility company using virtual net metering.

So in simple terms, a solar garden is nothing but multiple people who want to go solar but instead of installing solar panels on their roofs, they are chipping in to build a small solar farm, usually less than 5 Megawatts, to serve their local community.

You can also think of it as buying a share of a solar farm but instead of getting money as dividends, you are getting clean electricity.

Can Solar Farms Be Set up Anywhere? 

In theory, yes, you can set up a solar farm anywhere.

But in reality, a solar farm is an investment and like all investments, the return on investment (ROI) is what determines whether you can set up a solar farm here or you’ll be flushing your money down the toilet.

Here are a few things that will affect your ROI:

1. Land

Solar panels, especially commercial solar power systems used in photovoltaic power stations, are bigger than you think.

The average commercial solar panels have a surface area of 21.6ft², which means you can install about 1,500 solar panels per acre.

That’s just a single panel size without considering panel spacing, racking hardware, inverters, or wiring.

All in all, you need approximately 5-10 acres of land per Megawatt (1,000 kW) of solar power.

And given the fact that the average solar farm is 5 Megawatts, you’ll need at least 25 acres of land.

And not any land, your solar farm must be constructed near three-phase distribution lines or you’ll be forced to spend a lot of money on extending power lines.

2. Solar Irradiation

The second, yet, the most important factor is how much sunlight your solar farm receives.

Solar panels work by converting sunlight into electricity and the more sunlight the panels receive, the more electricity they’ll produce, and the more money the investor will make.

Ideally, you want to build the solar park in a very clear and sunny location that isn’t too hot because heat can reduce the efficiency of the solar panel and you obviously don’t want that.

3. Equipment & Installation

According to the Solar Energy Industries Association (SEIA), solar farms’ equipment & installation costs are typically between $0.85 and $1.07 per watt.

So you should expect to pay between $850,000 and $1.07 million per Megawatt of solar power.

And considering that the average solar farm size is 5 Megawatt, that’s roughly $5 million upfront!

How Much Money Can You Make out of a Solar Farm?

Assuming a national average of 5 peak sun hours per day, a 1-megawatt solar farm can produce 1,425 MWh of electricity per year.

And with an average wholesale solar electricity price of $83 per MWh, you should expect to make about $100,000 per year for every MW of solar farm capacity.

Of course, this is just the average, your actual earnings will depend on wholesale electricity prices where you live.

For community solar farms, the savings vary a lot but you should expect to save at least twice what you paid for your share in the solar garden.

What Are the Largest Solar Farms in the World?

With so much demand for clean energy, more and more investors are turning to solar farms.

Currently, some of the largest solar farms in the world include:

  1. Bhadla Solar Park: Currently, the largest solar farm in the world is the Bhadla Solar Park in Rajasthan, India with a capacity of 2,245 Megawatts. This farm is spread over 14,000 acres with an estimated cost of $1.3 billion.
  2. Huanghe Hydropower Hainan Solar Park: The second largest solar park in the world is in Golmud, China with a capacity of a little over 2,200 Megawatts and 1,390 acres of land with an estimated cost of $2.3 billion.
  3. Pavagada Solar Park: The third largest solar farm in the world is also located in India with a capacity of 2,050 Megawatts spread over 13,000 acres of land. This huge project cost $2 billion and provides electricity to more than 1 million Indian homes.
  4. Benban Solar Park: In number 4 we have the largest solar farm in Africa, the Benban Solar Park in Egypt. This project was sited with the help of NASA and it consists of more than 7.2 million photovoltaic panels with a capacity of 1,650 Megawatts. The project cost $4 billion and it’s constructed on 9,192 acres of land.
  5. Tengger Desert Solar Park: Another solar park in China is the Tengger Desert Solar Park with a capacity of 1,547 Megawatts and an estimated cost of $2.2 billion. This project first became operational in 2017 and it now powers more than 4 million Chinese homes.

Solar Farms Environmental Impact

While solar farms are a great solution for reducing our reliance on fossil fuels and fighting climate change, they do have some environmental impacts that need to be considered.

The first and most obvious problem is land use.

Solar farms have a huge land footprint, especially when compared to natural gas plants.

For example, you need about 30 acres of land for a natural gas power plant, but more than 500 acres for a solar farm to generate the same amount of electricity.

And as mentioned earlier, solar farms require clear and sunny locations, which are often farmlands or other areas that are important for natural ecosystems.

So constructing big solar farms can’t only disturb wildlife and habitat, it can also contribute to deforestation and other problems with food production.

However, this isn’t the case with all solar farms.

Some projects have been developed in areas that have already been degraded by other human activities, such as mining or logging.

Additionally, the terrain below between the solar arrays can actually be used for agriculture or grazing, also known as agrivoltaics.

Different agrivoltaics systems configurations
Different agrivoltaics systems configurations by NREL

Giving farmers the option to lease low-yield land to solar farm investors can also increase their income and encourage them to continue farming rather than selling their land to developers, which benefits both the local economy and the environment.

Further, solar farms have a much lower environmental and visual impact than traditional power plants, and they don’t produce any emissions, they aren’t noisy like wind turbines, and they require very little upkeep.

Finally, solar farms reduce our dependence on foreign fossil fuel sources, which can have geopolitical benefits.

So while the environmental impacts of large-scale solar farms need to be carefully considered, they are an important part of the global transition to a clean and sustainable energy future.


How Long Does It Take to Establish a Solar Farm?

On average, it takes about 1.5 months per Megawatt to construct a solar farm. So, a 10 Megawatt project will take about 15 months.

How Long Do Solar Farms Last?

The average lifespan of a solar farm is about 30-40 years with proper maintenance and upkeep.

How Do Solar Farms Make Money?

Solar farms make money by selling the electricity they generate to the local utility or power grid.

Last Words

Solar farms are an important part of the global transition to a clean and sustainable energy future.

They provide renewable, emissions-free electricity, reduce our reliance on fossil fuels, and have minimal environmental impacts.

And while there are some important considerations to keep in mind, the benefits of large-scale solar projects make them an important part of our energy future.

Mohamed Fared

Mohamed Fared is a qualified engineer, with over three years of experience in the solar energy field. He has worked on some of the largest infrastructure projects in the world, including the 1,650MW Benban solar park in Egypt. When he’s not working, Mohamed is a passionate advocate for increasing access to green energy and sustainable development. He also enjoys learning about new innovations in the industry.

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