With annual residential energy costs among the top in the nation, Texas is an excellent location for a solar farm. In 2015, solar energy capabilities increased by 65 percent, and there’s still plenty of need for solar energy. But, before you start looking for solar farm land, here’s some things to know about solar farm development.
SOLAR FARM COST
For a megawatt solar farm, expect to spend $3 million developing it. For larger farms, expect to spend approximately $500,000 per acre. Solar farms that produce less than one megawatt of power usually cannot justify the cost of development.
SOLAR FARM LAND
Many solar farm entrepreneurs ask themselves: How much solar power do I need? While solar farms can vary in size, solar farms should generate at least one megawatt of power to ensure a reasonable return on the investment. Depending on the efficiency of the panels and the sun exposure, you should expect to need six to eight acres of land. Some solar investors choose to lease land from farmers because it’s usually flat and well suited for solar panels.
SOLAR FARM GRANTS
The federal government currently offers three photovoltaics grants. They are the USDA’s Rural Energy for America Program grants, the Tribal Energy Program grant, and the USDA’s High Energy Cost Grant program. The federal government and Texas also offer over 100 other financial incentives, which you can explore through the Database of State Incentives for Renewables and Efficiency.
SOLAR FARM PERMITS
It may take three to five years for the permits and siting requirements for your solar farm to be met. You must submit your plans to federal, state, and local regulators. Your business must also consider water rights, land use, and how to access and transmit the solar energy prior to applying for permits. If you want to use federal land for your solar farm, you must get approval from the U.S. Bureau of Land Management.
SOLAR FARM LEGAL DOCUMENTS
In addition to the necessary permitting, you’ll also need to apply for a business license, certificate of incorporation and other business-related documents. If you intend to lease land for your solar farm, you’ll also need a lease agreement. Finally, if you intend to apply for loans or other financial assistance, you’ll need to create an involved business plan and provide other documentation to achieve funding.
RETURN ON INVESTMENT
A solar farm’s return on investment will vary widely depending on your development costs and the local, current value of energy in your area. Some publications believe it can be as high as 10 to 15 percent, but other projects demonstrate that six percent is more likely.
If you’re still interested in creating a solar farm, but don’t have the necessary understanding of the industry, you can partner with a solar company that will help you navigate the process.
LEARN MORE ABOUT COMMERCIAL SOLAR
CAM solar has years of experience working on large solar projects and has the knowledge that will help you through the steps of installing a solar farm. Learn more about our commercial solar case studies with companies like Hewlett Packard and the Civic Center.