This Blog was Originally Published at: How to Start a Solar Farm and Make It Profitable: 2025 Guide Do you know that the way you use your land to grow crops like wheat and rice, etc, people are using it to grow clean solar energy? Many landowners are turning their properties into solar farms that generate megawatts of solar energy using solar panels. In fact, due to the rise in this trend, for the first time in 80 years, In 2023, 55% of new electric capacity coming directly from solar was added to the grid. This is not a small change; it shows how solar is slowly becoming the main source of electricity generation. So, if you also own a large piece of land, now is the right time to start a solar farm and earn a profit. However, it is a big step, and you might have a lot of questions like, How to start a solar farm? I don’t know anything about it. How much land is needed? Should I start my own or lease my land? What upfront costs and permits are needed? Is it profitable? What mistakes should I avoid, etc? Don’t worry — in this guide, we will solve all your doubts and provide practical answers to your queries. What is a Solar Farm? Solar farm is a large area of land where thousands of solar panels are mounted to capture sunlight and convert it into electricity. This power is later sold to utility companies, nearby homeowners, or large businesses. Are Solar Farms Profitable: How Much Can You Earn From a Solar Farm? Before we start learning how to start a solar farm, let’s understand if solar farms are actually worth starting. If yes, How much can a person earn from a solar farm? There are many factors that affect earning from solar farms like location, land size, sunlight availability, and the rates offered by utility companies. On average, Solar farm owners earn between $21,250 and $42,500 per acre annually. However, it can vary depending on where you are starting a solar farm. Additionally, many local policies and rules, proximity to grid infrastructure, etc, can affect it. Types of Solar Farms There are mainly three types of solar farms and each one of them serves different purposes and energy needs. Utility-Scale Solar Farms: They are the largest type of solar farms covering acres of land. They generate electricity in very large amounts in megawatts (MW) or gigawatts (GW). The electricity produced by them is sent to the power grid that supplies power to different homes in one or more regions. These farms can either be owned by a single person or directly taken in lease by large companies. Community Solar Farms: These are smaller solar farms owned by a group, community, or businesses that can’t install solar panels on their own property. People create such solar farms to power their houses and they share the cost of building and maintaining them. These types of solar farms can either be owned by them or taken in lease. They are mostly grid-tied, which allows them to send extra electricity back to the grid and in return get credits on their bills when they need electricity from the grid. Commercial Solar Farms: Commercial solar farms are set up by businesses to supply power for their operations. They set up these solar farms to reduce their energy cost and fulfill their commitment towards Environmental, Social, and Governance (ESG) goals. It helps them to maintain a continuous supply of power and create a greener brand image. How to Start a Solar Farm in 5 Easy Steps: Choosing the Right Location The first step on how to start a solar farm begins with selecting the right location. You must select land in a good location and ensure that it has enough area and flat terrain. To select a perfect land, you must take care of these things: Land Suitability: Make sure that the land you are selecting has a flat terrain that receives a good amount of sunlight year-round. Also note that it is not prone to flood, earthquake, or any other natural disaster. Grid Connection: Check the proximity of land to the nearby grid substations and transmission lines. It will help you to easily connect with the grid without overspending. Local Regulations: Once you have checked this, you must also check the zoning laws of your area. Make sure that your land falls in an area where solar panels are allowed to be installed. 2. Secure Land and Permits: Next, you must secure the land you have selected by either purchasing or leasing it. If you already have land that you own, you can directly start to secure permits needed to start a solar farm in your area. Purchasing vs Leasing: Leasing land reduces the upfront cost of setting up solar farms. You can lease land at a fixed annual rate for 10–20 years. This rate can be paid with the steady income generated by selling the electricity generated by the solar panels. However, if you are ready to invest more money, buying the land will help you to enjoy the long-term benefits. It will also reduce the risk of any mishappening or false claims on land. Zoning Approvals: Obtain approvals from both federal and local authorities to use the land for solar energy production. This process requires securing many approvals and permits like National Electrical Code (NEC), Federal Energy Regulatory Commission (FERC) permits, Environmental Protection Agency (EPA) clearance, etc. Utility Agreements: You must also establish agreements in advance with utility companies, nearby homeowners, or businesses you can plan to sell the electricity generated by solar panels. Make sure to fix the purchase rates in advance to avoid conflicts. 3. Securing the Finances One major part of how to start a solar farm is securing the finances needed to start it from scratch. You must calculate the expenses in advance. For this, you can also take the help of your solar panel installer by asking them to provide a solar quote. It will mention the overall cost estimates of the project setup. However, you will have to calculate other expenses like Project Cost Estimation: You can generate a rough estimate of land, permits, and grid connection and add up the cost of installation provided by the solar panel installer. Financing Sources: Once it is done, you must find a way to finance your project. You can explore different ways like using your own money, making loans or securing private investments, etc. Also, make sure to check the options like government incentives and tax rebates, that can reduce your cost of installation. Return on Investment (ROI): At last, analyze everything and calculate your profit. Make sure that you recover your money and become profitable in a few years of setting up the solar farm. Include the factors that can affect it like the lease payments (if any), maintenance costs, energy rates, etc. 4. Layout of the Solar Farm Once all the preparation is done, you can start the main work: setting up the solar farm. It will include important things like building a layout and choosing the right type of solar panels, inverters, and battery storage.