Solar farming has been the most recent addition to venture capitalists and mid-range investors worldwide as the demand for the novel ’solar cash crop’ surges around the world. In the United States, solar farming is gaining massive ground to lure landowners and businesspersons alike with its lucrative returns on investments, growing demand, and generous tax breaks. Summing up, opportunities in cheap and clean energy production would increase the productivity and profits manyfold and put an end to a global reliance on fossil fuels i.e., 85% for energy production and consumption.
Solar farming is a great alternative to rapidly depleting fossil fuels, which are record high in demand and costs as of 2022. Despite upfront costs and licensing discrepancies, solar farming is more profitable for countryside businesses, such as agricultural farming and many other fixed-land investments.
Types of Solar Farming
Solar panels are primarily categorized into mono- and polycrystalline solar cells. Both can be used for commercial as well as residential purposes with slight variations in efficiency output. In areas where sunlight is more intense, polycrystalline will deliver output as good as monocrystalline, which is more efficient in relatively colder terrains with lesser sunlight hours.
Photovoltaic panels for homes are normally mounted on rooftops, hence termed rooftop panels. These panels are installed on roofs with inclined slopes, such as homes, offices, or schools, and require sturdy bolted racking to hold panels together in intense winds and storms.
Additionally, ground-mounted paneling is a widely employed method for multivariate applications. Ground mounting is feasible for homes, offices, and industries, as well as for wide-scale solar farming purposes. They are less costly and incur minimal repairing costs, only if you have adequate land free of obstructions to install them. Large-scale solar farming is done by erecting panels on vast swathes of land through frame mounts, pole mounts, or on canopies.
Commercial Solar Farming
Commercial solar farming could either be community- or utility-scale. The utility-scale solar farms are large-scale and sell the energy produced to power distribution companies or directly to industrial consumers. The average production capacity of utility-scale farms ranges from 1MW to 1000MW and more. In contrast, community-based farming serves a limited population, mainly residential customers with power generation capacity between a few KWs to 5MW.
According to GTM Research in 2021, the average land required to farm solar energy is 6 – 8 acres per megawatt. The land requirements may vary accordingly with the panel types and applications of usage. Moreover, sufficient space must be left alone between the panels for hassle-free maintenance and replacement.
Average Costs Required for a Solar Farm
Solar farms only incur upfront costs which include PV panels, inverters, transmission cables, inverters, storage batteries, and land acquirement. For landowners, the average installation costs sum up to not more than $ 1 USD per watt. If you are leasing the land, the final costs would depend on local land prices, distance from consumers, and various other technicalities, including tax status, local energy prices, and terrain.
In the United States, multiple constituencies offer lucrative incentives to solar farmers with state-sponsored subsidized loans and insurance for renewable energy businesses. In the remaining states, renewable energy regulations are yet to be implemented. Moreover, rooftop solar systems for residential purposes are quite expensive compared with farmed solar energy, which is why consumers prefer grid-based reliable energy compared to standalone solar power. As of 2022, solar power amount to less than half the average production capacity per KWh compared to fossil fuels, which include coal, oil, and natural gas.
Solar farming is a rather novel power generation business with rapid extensions and investments abound, alongside ripe long-term benefits and mouthwatering return on investments. Plus, the maintenance costs are extremely low. An average solar farmer needs to find a PV panel and batteries supplier from China or wherever it will cost the lowest, then hunt for renewable energy loans, procure a suitable land on lease, and get going after the paperwork is completed.
The ROI of an average 5 – 10 MW solar plant is anywhere between 6 to 8 years, leaving behind 12 – 15 years in pure profits. On average, a 10MW solar farm would generate between $50,000 and $60,000 in profits per annum.
The producers can then sell this solar energy in the market to solar generation companies, distribution companies, and industries, as well as open wholesale markets via long-term or short-term distribution agreements.