Solar Farms: How Does It Work?

February 21, 2023

Solar farms play a pivotal role in advancing the journey toward a sustainable future through harnessing solar energy. These farms come in various sizes and serve different purposes, ranging from small-scale community-oriented arrays to expansive utility-scale facilities capable of powering thousands of households.

How Do Solar Farms Work 3


Over the past decade, solar energy has exhibited an impressive average annual growth rate of 49%, and the widespread proliferation of solar-powered farms has notably contributed to this surge. These solar farms have significantly expanded the grid’s capacity, enabling them to supply electricity to approximately 15.7 million homes.

Furthermore, the costs associated with solar power farm projects have decreased by more than 75% over the past decade, primarily attributable to advancements in solar technology. These innovations have made solar energy production viable even in regions with varying seasonal climates.

Nonetheless, it’s essential to recognize that solar farms possess their unique set of advantages and disadvantages. This article aims to provide a comprehensive insight into their functioning, empowering potential investors to make well-informed decisions regarding these sustainable energy solutions.

What Are Solar Farms and Their Types?

A solar farm is a substantial array of photovoltaic (PV) solar panels that capture energy from the sun, converting it into electricity. This electricity is then transmitted to the power grid for distribution and consumption by consumers. What sets solar power farms apart is their remarkable capacity to generate sufficient electricity to power numerous businesses and households. They seamlessly integrate with electrical grids, much like traditional fossil-fuel power plants, with the key distinction being their eco-friendly operation and utilization of renewable energy sources.

view of solar panel farm


As for the cost, establishing a solar farm typically ranges from $0.80 to $1.30 per watt, significantly undercutting the average cost of residential installations, which stands at $2.76 per watt. In essence, utility-scale solar farms exhibit substantial capacities proportionate to their size, making them an essential part of the renewable energy landscape.

The most significant difference between utility-scale and community solar farms is their size and scope. Utility-scale solar farms primarily serve larger electricity grids compared to community solar farms. Utility-scale solar farms have capacities ranging from 1 MW to a staggering 2,000 MW.

Public utilities are the main beneficiaries of utility-scale solar farms, while community solar farms target end-consumers such as renters and homeowners.

Below is a comparison table of community solar farms vs utility-scale solar farms:

Community Solar Farms Utility-Scale Solar Farms
Electricity is directly marketed to consumers Electricity is directly supplied to utility companies
Small size operation Large operation with the target of increasing energy production
Permits customers to purchase shares in the farm and acquire energy generated by it The generated energy is either owned by a utility company or procured wholesale by utility purchasers.

Utility-Scale Solar Farms

Utility-scale solar farms are extensive solar installations owned by utility companies. The amount of power generated by these farms is contingent on their geographical location and is obtained either through wholesale purchases by utility companies or via power purchase agreements (PPAs).

view of solar panel farm


The solar industry is progressively shifting towards creating larger solar farms due to the enhanced economics of solar energy production and governmental efforts to transition to renewable energy sources in the fight against climate change.

Collectively, these solar farms boast an impressive total capacity, surpassing 92 gigawatts in the US.

It’s essential to note that utility-scale solar farms are typically established through the collaboration of large utility companies and government support. Conversely, community solar farms are initiated by groups of individuals aiming to reduce their utility costs and reap the benefits of these collective projects.

Community Solar Farms

A community solar system is a solar facility, typically comprised of an array of solar panels, designed to distribute its generated power to neighboring homes and businesses rather than being confined to a single structure.

Often, a community solar array can power an entire neighborhood or even a whole town. Residents can choose between owning a portion of the solar panels within the community

array or renting them, enabling them to enjoy reduced energy rates without needing an initial purchase.

view of community solar farm

Source: Renewwisconsin

One of the significant advantages of community solar is its inclusive nature, which extends the benefits of solar energy, including lower electricity expenses, to households and businesses without the requirement of installing a system on their roof.

Moreover, in regions where solar-powered farms are more cost-effective than electricity derived from fossil fuels (as in most areas), consumers can realize substantial savings on their monthly bills.

Beyond these individual savings, community solar systems offer a range of supplementary benefits:

  • heightened resilience during power outages or adverse weather events, fostering community wealth
  • stimulation of the creation of local job opportunities.

Research conducted by the National Renewable Energy Laboratory underscores that nearly 50% of households and businesses encounter challenges when hosting rooftop solar systems. These challenges may be attributed to factors such as not owning the property, unfavorable roof conditions that impede the installation of rooftop photovoltaic (PV) systems due to shading, roof dimensions, or other constraints, or financial barriers stemming from the upfront costs associated with home PV installations.

As of December 2020, 129 solar power farms in the United States were 5 MW or larger, according to NREL. Community solar projects generally range in size from 2 to 2,000 kilowatts (kW) or more. Some states put limits on the size of community solar projects, either directly in terms of the kilowatts they can generate or by limiting the number of people who can join a project.

How Do Solar Farms Work

view of solar farms work


Solar energy is the solar radiation emitted from the Sun, and the Earth receives enough of that renewable energy daily to provide electricity to not just every home in the United States but every home on the planet. That’s one powerful renewable energy source! Humans have devised several ways to capture solar energy farms, the most common being photovoltaic (PV) solar panels that convert the sun’s rays into usable electricity.

Solar panels transform sunlight into usable electricity. If you’ve ever wondered, “How does solar energy work, step by step?” in this section, we will look at this process in detail.

Step 1: Solar Panels Capture Solar Energy

“How is solar energy produced?”. Solar panels convert solar energy from sunlight into electrical energy for your home.

This “photovoltaic effect” forms due to the free-flowing electrons within the solar panel. The moving electrons create an electric current, which is then harnessed by the wiring connected to the solar panels to produce electricity.

The more sunlight reaches the solar panels, the more energy they generate. During peak sun hours, the panels in your solar array receive the maximum concentration of sunlight, which means they can convert sunlight to develop the full amount of electricity during this period.

Step 2: Solar Inverters Convert DC to AC

Solar panels produce electricity in the form of direct current (DC), which means the electricity only flows in one direction. However, your home appliances use alternating current (AC) electricity, which means the electricity flows in both directions.

This means that the solar electricity from your panels needs to be converted from DC to AC to make it usable in your home. To convert DC power to AC power, you need an inverter.

It’s a simple job but an essential one if you want to take advantage of solar energy. Without the inverter, your system would create electricity, but it wouldn’t be able to power anything.

Solar inverters also allow you to connect your solar panel system to the internet so you can access information about your system’s performance. This helps you compare your solar energy production and your household energy consumption so you can check if the system is functioning properly and meeting your electrical load as required.

Step 3: Electrical Panel Distributes Electricity

Your electrical panel distributes electricity throughout your home. The circuit breakers in the electrical panel can also cut off the current flow to an electrical circuit in case a fault or surge occurs to prevent overload in electrical lines that can cause damage.

While your solar panels generate electricity, they typically aren’t connected directly to your appliances or other electronic devices. In terms of understanding how solar panels work, they provide electricity to the electrical panel, and your electrical panel separates that home solar power into individual circuits that run to everything in the house.

Step 4: Electric Meter Records Consumption and Production

Your electric meter is your utility company’s device to measure your electricity consumption. It’s how they know what to bill you each month. That meter reading is just a summary of your electricity consumption for the month.

When you go solar, you consume electricity from your solar panels, which lowers the amount of electricity you get down from the grid. As a result, your electric meter records a lot less consumption, and you save money by not paying for that electricity from the utility company.

Most homes with solar have a smart meter installed, which records the exact consumption of electricity for your house. Smart meters send real-time usage data to your local utility company for billing, customer service, and research purposes. A smart meter eliminates the need for estimated bills by measuring exactly how much electricity is being used.

Step 5: Batteries Store Excess Energy

Installing solar battery storage is essential to maximizing the long-term benefits of going solar. If your solar panels generate more solar energy than you can use, you can store that extra electricity in a solar battery. That way, you have electricity available when the sun goes down, or it’s a rainy day – instead of drawing from the electricity grid.

Pros and Cons of Solar Farms

Solar panels can be installed in sun-rich locations, open fields, or rooftops. The extent of their sun exposure directly correlates with their electricity production potential.

The sun delivers a ceaseless stream of energy through photons, ripe for capture, conversion, and application to power our planet. Yet, the paramount question might revolve around cost-effectiveness. Are solar farms profitable to meet the energy demands of your home or business? In this section, we weigh the pros and cons of solar farms in this process and delve into what solar’s accessibility and cost signify for consumers.

view of advantages and disadvantages


Alt text-view of advantages and disadvantages

Advantage Disadvantage
Clean and Renewable High Initial Costs
Lower Costs Sunlight Dependency
Energy Independence Complex Installation
Increased Home Values Space Requirements
Long-Term Savings Costly Energy Storage
Minimal Maintenance Environmental Impact of Manufacturing
Community Benefits Relocation Challenges
Versatile Applications Materials Scarcity
Mitigating Rising Costs Disposal and Recycling Issues

Wrapping Up

Solar farms are crucial in our renewable energy landscape, promoting sustainability and environmental responsibility. These extensive arrays of solar panels efficiently convert sunlight into electricity, benefiting communities and households. The solar energy sector in the United States is experiencing remarkable growth, contributing significantly to the fight against climate change.

The cost reductions in solar power have made it accessible and cost-effective for various applications, furthering the transition to renewable energy sources in the U.S. Understanding different types of solar power farms empowers consumers to make informed investments, driving us toward a more sustainable and energy-efficient world.

Jed Hilton
Jed Hilton

Jed Hilton, our Founder and CEO, has over a decade of experience in the solar industry. His innovative leadership and expertise in solar technologies guide our company's vision and strategy.

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