How Much Land Is Needed For A Solar Farm
Large solar projects have some requirements that need to be met in order to work.
According to GTM Research, a 1 MW solar farm will need 6 – 8 acres of land.
This gives room for all of the equipment needed as well as space between each panel row.
Large solar projects need space for the solar panels as well as the equipment that goes along with making it function, such as inverters.
The rows of panels need to have space for repair and maintenance access and the space is given so that there arent any shadows from the adjacent solar panel.
Lastly, the land must be open, without obstructions that can cause shade over the solar panels.
Land that is in direct sunlight is ideal – free of trees or nearby tall buildings, barns, etc.
How Much Does It Cost To Build A Solar Farm
Assuming you already have the land to build a solar farm on, the installation cost typically ranges between $.82 to $1.36/watt – according to the SEIAs average national cost figures in 2020.
Solar farms are 50% cheaper to build and operate than rooftop solar systems, which cost an average of $2.84 per watt – compared to $.82 to $1.36/watt
The larger the solar farm, the lower your installation cost is going to be.
Utilities are also turning to solar farms when adding new power generation capacity because prices tend to be more competitive than almost any other energy source.
Solar farmers are able to save on installation and operating costs of these larger scale solar farms and are therefore able to be more competitive than other energy sources, making them highly desirable to those looking for more cost effective energy sources.
How Much Investment Is Necessary To Build A Solar Farm
The power generation capacity of a large-scale solar farm is at least 1 megawatt . This capacity is equal to that of a power plant, which is capable of offering a constant supply of electricity to almost 200 households.
The cost of building a solar farm largely depends on different factors, including available space and sunlight hours. The cost of a utility-scale solar farm is something around $1/watt. Hence, you can easily calculate that to build a 1 MW solar farm, you have to invest approximately $1 million.
The cost of the residential or community solar farm is relatively higher, which stands at $3 to $4 per watt.
The reason for this difference is the fact that while building a large-scale solar farm, you buy solar panels and other equipment in bulk, which lowers their price to a great extent.
Recommended Reading: How Much Does A 8kw Solar System Produce
Hello Who Are You And What Business Did You Start
My name is David Gomez and Im the founder and CEO of Clean Energy Solutions, based out of Los Angeles, California. Were a solar energy provider that provides homeowners and businesses with low-cost solar power.
From 2014 to 2019 we have grown over 6700%. Our unique solar program allows clients to save money using solar energy, but without having to actually purchase a solar system. We provide the client with a solar system at no upfront cost, and the client only pays for the energy that the system produces, but at a lower price than their utility would charge them.
Our monthly revenue is around $600,000 with big plans to keep growing. A lot of our growth in the new year will be focused on our energy-efficient affordable housing division.
Solar Lease May Hurt Your Homes Value
Solar lease will NOT add value to your house because they are the personal property of the leasing company and not a fixture on your house. In fact, a solar lease or PPA can devalue your house. In general, people who own rooftop solar enjoy an added value to their home but not with the leases. Buyers shy away from them because they straight out dont like the deal or simply do not understand it. Some appraisers say that to many potential buyers a solar lease is a liability rather than an asset, and may drive people away.
In the Bloomberg article, Dorian Bishopp blames the solar panels on his roof for costing him almost 10 percent off the value of the home he sold in March. According to the Bloomberg article Scott Vineberg, a SolarCity customer, received multiple offers for his home in Scottsdale, Arizona, home he sold in January. Unfortunately, the lease made the deal more complicated because the buyers were reluctant to take over the contract and asked him to pay off the balance in advance, that is 10 years of payments.
Recommended Reading: How To Start A Sole Proprietorship In Kentucky
Solar Energy: An Overview
Solar energy typically works by converting light energy from the sun into electricity. Photovoltaic energy is created by using flat solar panels that can be affixed to a structure’s roof or arrayed across open spaces. Another method, known as thermal solar, uses a series of mirrors to focus the sun’s energy on a single point to turn water into steam, which then turns a turbine. For consumer and business applications, photovoltaic solar panels are much more common than other types.
The cost for solar power in Q4 2019 was below $.20 per KWH in all of the states recorded and below $.15 and $.10 per KWH in some states. The national average for fossil fuel electricity was $0.13. Prices are comparable, but the real savings from solar come in future years due to the 2.2% inflationary prices per year for fossil fuel electricity. With solar, you are locking in costs at a constant rate. The only additional cost factors are the upfront costs of installing a solar system and the fossil fuel electricity costs needed when solar doesn’t cover all energy needs.
While the most efficient solar panels on the market today have efficiency ratings as high as 23%, the majority of panels range from a 15% to 20% efficiency rate. The most efficient solar panels and their efficiency rates are:
What About Net Metering
Net metering is another way to generate money for your solar array. However, its tied to your local utility company and how much solar electricity your commercial building uses versus how much it generates. With net metering, your utility company puts a meter on your solar installation. When the meter spins forward, youre using the utility companys electricity. When it spins backwards, youre powering your company with the electricity your solar array generates.
If you use more electricity than you generate, you pay the difference between those two amounts. That difference appears on your utility bill for that month. If you generate more electricity than you use, the utility company puts a net metering credit on your monthly bill. That credit will appear as a dollar amount.
Before you look into this option, you should make sure your state has a net metering program. Connecticut, for example, is currently phasing out their net metering program. New York, Massachusetts, and Rhode Island, on the other hand, all have net metering programs in which businesses can participate. If you participate in a net metering program, its a great way to offset the cost of installing solar panels.
Don’t Miss: Do Solar Panels Radiate Heat
What Barriers Are There
Barriers to entry for a solar panel installation company are relatively moderate. Significant challenges for new entrants include:
- High initial investment required: Startup investment for a solar company is relatively high since most of the money goes toward buying the initial solar panel inventory.
- Lack of product differentiation: Solar panel installation services are quite standard, leaving little room for creativity and innovation. The ripple effect is that it is challenging to stand out from your competition.
- No switching costs The industry lacks switching costs, making it easy for customers to switch from one company to another.
- Learning and experience You must know how to install solar panels to thrive in this industry. You also need a few months of hands-on experience to get started. These two factors could determine how soon you can win a client as a new entrant.
Will Free Solar Panels Save You Money
You may have various reasons for going solar. If youre like most people, saving money, eliminating your utility bills and/or reducing your carbon footprint are probably at the top of the list. The environmental benefits of going solar are more or less the same regardless of who installs your system, so its key to focus on the financial benefits.
Regardless of its do-good image, the solar industry is an industry like any other: the companies offering products are looking to turn a profit. Providers of solar leases make their money by selling you electricity, usually at a lower rate than what you pay your utility.
Although companies like SolarCity once dominated the market for solar leases, countless other players have since entered the space and begun competing with each other. Some solar leases will save you more money than others. You as a solar shopper can now take your pick of company based on their offer. So even if financial gain is secondary to environmental considerations for you, you should still shop around to make sure youre getting the best deal.
Interested in learning about your local solar options? By shopping on the EnergySage Solar Marketplace you can compare not only solar lease options, but also purchase and solar loan options. Sign up today to get quotes from solar installers in your area.
Recommended Reading: Do You Have To Pay For Electricity With Solar Panels
Is Solar Energy A Good Investment
The solar energy market is accelerating. According to the National Renewable Energy Laboratory, the industry will add 10 gigawatts of new solar capacity annually through 2022. That should increase to an average of 18 to 20 GW per year in the 2023-2030 timeframe. Powering that surge is a dramatic decline in costs. Amazingly, solar is on track to be the lowest-cost source of bulk power in the coming years.
Leasing Solar Panels Or Power Purchase Agreement
As weve covered, in solar leases or PPAs, a solar company installs a solar panel system on your home you then pay a monthly rate for the solar power those panels produce. The solar company you lease through will retain ownership of the panels, thereby cashing in on the solar tax credit.
Solar leases and PPAs are close to interchangable, but for one key difference: In a solar lease, you make fixed monthly payments to use the solar energy system, whereas in a PPA, you purchase the electricity produced by the panels. Leases are more common through national solar companies like Sunrun and SunPower. Savings are estimated for a medium-sized home with monthly energy costs of $150 per month.
You May Like: How Much Can Solar Power Generate
How Much Money Does Solarcity Make
It is difficult to know exactly how much revenue SolarCity generates as it is now part of Tesla.
Tesla keeps the branding for some purposes, while also using Tesla Energy.
Tesla has struggled for years to generate profitability. However, in the company finally saw some profit.
Teslas revenue is on a gradual increase since the acquisition of SolarCity.
Reports show revenue of $31,536,000 in 2020, up from $7,000,000 in 2016. This was a significant milestone for Tesla.
According to Teslas filing with the SEC, Tesla saw a total of $1,994,000 in 2020. This is an increase of 30% in comparison to $1,531,000 in 2019.
Create A Business Plan
Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:
- Executive Summary: Brief overview of the entire business plan should be written after the plan is complete.
- Business Overview: Overview of the company, vision, mission, ownership, and corporate goals.
- Product and Services: Describe your offerings in detail.
- : Assess market trends such as variations in demand and prospects for growth, and do a SWOT analysis.
- Competitive Analysis: Analyze main competitors, assessing their strengths and weaknesses, and create a list of the advantages of your services.
- Sales and Marketing: Examine your companies unique selling propositions and develop sales, marketing, and promotional strategies.
- Management Team: Overview of management team, detailing their roles and professional background, along with a corporate hierarchy.
- Operations Plan: Your companys operational plan includes procurement, office location, key assets and equipment, and other logistical details.
- Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
- Appendix: Include any additional financial or business-related documents.
Recommended Reading: How Much Do Solar Installers Get Paid
Incorrect Or Inefficient Designs
Its all too easy to under-or over-engineer a solar system. An incorrect or inefficient design is a surefire way to sink your business.Aurora Solars sophisticatedsolar design software generates complete engineering designs and sales proposals with just an address and an electric bill, meaning you can deliver the best design, every time.
Step : Define Your Brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren’t feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we’ll give you helpful tips and advice for creating the best unique logo for your business.
ï»¿ï»¿ï»¿If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market a solar panel business
Attend home shows as a vendor, purchase on-air and print ads, and join your local chamber of commerce to get your name out in the community. Ask at the city hall what requirements they have in order to consider your company for municipal projects.
How to keep customers coming back
Solar panels are a highly visible product. Consider installing panels on a home or business in a high-traffic area for free or at a promotional rate. Your reputation will grow with each job completed on-budget and on-time. You could also consider donating a panel to local park or school as a goodwill gesture.
Recommended Reading: How Safe Is Solar Energy
Are Solar Farms Worth It
The trend over the past 10 years shows more and more agricultural land being dedicated to solar farms, indicating that solar farms are worth it.
Several things are driving this phenomenon:
- Depending on farm-land output, it is simply more profitable to launch a solar farm
- The land is easier to manage, requiring little work after installation
- Energy is in big demand and new sources are desperately needed
- Government loans and grants are making it more attractive for land-owners
- Leasing land to solar companies is an easy way to monetize under-performing land
Solar farms are a big investment and investments are measured in ROI . This asks the questions How much money do solar farms make over time?.
Its hard to generalize due to different conditions from state to state, but as a general rule ROI for a solar farm is between 13% to 15% and payback time is between 8 to 12 years.
Choose Your Business Structure
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your solar panel business will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using ZenBusinesss online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
You May Like: How To Install Solar Panels Yourself
How Does Solarcity Make Money
SolarCity operates as a subscription business in a way similar to regional utilities.
The company also offers customers the option to acquire the equipment by paying its value upfront or through loans.
This further diversifies the revenue mechanisms the company relies on. This type of payment method is growing in popularity and use.
After its acquisition by Tesla, SolarCity came out with new products such as its Solar roof.
It also continuously updates its other products, announces new partnerships, and opens new factories.
The range of products does not only include its original solar leasing but others as well.
It also offers electric roofs, electric vehicle chargers, energy storage solutions, and auditing services.
Ready to build your portfolio? With Public.com you can follow other investors, discover companies that are inline with your beliefs, and invest into stocks and crypto with very little money! What are you waiting for? Check out Public Now!
Find A Business Mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Don’t Miss: What Is The Tax Rate For Sole Proprietorship
How A Solar Developer Makes Money
Commerical Real Estate / Solar / Project Finance
If you are familiar with commercial real estate development, the risks and rewards associated with solar development are quite similar. This article will use real estate development as an analogy so you can understand how and when your solar developer is making money on your commercial solar project and you can ensure that you are getting the best deal possible.
So what does a solar developer do anyhow? Like real estate developers, solar developers source a project, line up financing , then design and build the project. Commercial solar is installed by an EPC contractor which is the equivalent of a GC. Hire an ENGINEER to design and permit the project, PROCURE the solar equipment, then hire a qualified installation crew to perform the CONSTRUCTION.
HERES HOW THE SOLAR DEVELOPER MAKES MONEY
A solar developer will make two fees: a development fee / construction management fee and a profit at sale of the project .
Development fees can vary widely but a range of $0.10 to $0.50 per watt is possible depending upon system size and scale. This equates to about 5% to 15% of total project costs. The profit on a sale of a system is function of the system cost and future electricity revenue from the off-taker, just like real estate has a return on cost metric which is a function of annual rent and building cost.
PERMISSION TO OPERATE