How do solar farms work?

Fast read

Solar farms are large-scale solar projects that harvest solar energy using various solar energy collection techniques, most solar panels. They differ from the rooftop and commercial solar systems because they are decentralised and typically feature ground-mounted solar panels erected on wide, flat ground plainstems.

Utility and community solar farms are the two varieties. Community solar farms are smaller and supply power to subscribers who have paid to be a part of the system, as opposed to utility solar farms, which are often much larger and serve clients such as an energy company.

Solar farms work similarly to a solar system, with many individual solar panels grouped together to produce electricity. If built on trackers, the panels rotate to follow the sun throughout the day. The benefits of solar farms include environmental sustainability, financial return, and energy independence.

Everything you need to know about solar farms

Many are starting to realise the numerous benefits of solar farms. They are increasing in popularity in Australia and worldwide as they significantly contribute to reducing C02.

What are solar farms?

Solar farms are simply large-scale solar installations combining thousands of panels in a single location to generate electricity from the sun, just like your home solar system, on a much larger scale.

Unlike residential and commercial systems, solar farms are typically situated in rural locations. They consist of ground-mounted solar arrays installed across large fields of flat or undulating ground.

Instead of providing energy directly into a home or business, solar farms can generate power and provide it to the electricity grid. There are primarily two types: utility and community solar.

The most significant difference between these two types of systems is the size. Utility solar farms tend to be much larger and start at 5 Mega Watts and range as large as 3000 Mega Watts (MW). In contrast, community solar farms tend to range from 500kW to 10MW.

The other significant difference between these two farms is regarding whom they provide power to. Community solar farms usually provide power to subscribers who have paid to participate in the system. In contrast, utility farms are typically owned by an energy company and provide electricity to customers.

solar farm

So how do they work?

Solar farms work similarly to residential or commercial solar systems on a significantly larger scale.

The solar panels create electricity via the sunlight hitting the solar panels. When sunlight hits the solar cells, an electrical current flows through the panels to a central inverter to convert to grid-compatible AC power.

The AC power then moves to the grid through high-voltage transformers. Although north-facing panels are standard, panels can also face different directions to generate more energy at various times of the day.

It’s common for panels to be designed facing east and west at a low tilt. This setup allows more panels to be installed in an area, reducing shading potential. It also enables the solar panels to generate more power earlier and later in the day when electricity demand is higher, making the electricity more valuable on the traded electricity market.

Certain solar farms utilise tracking, where panels are mounted on movable mounts known as trackers. These trackers enable the panels to follow the sun from morning to afternoon, maximising power generation throughout the day.

Solar farms will be an integral part of our future energy production. Moving forward, both community and utility as well as residential and commercial solar farms will be a significant part of the energy mix that allows us to become independent from fossil fuels.

Large-scale solar has experienced price decreases over the years as panel prices came down. The need to get to Net Zero by 2050 means we can expect many more solar and wind farms around our country.

What are the benefits?

Environmental sustainability

Solar energy is a clean and renewable source of electricity that can help reduce our reliance on fossil fuels and decrease greenhouse gas emissions. Investing in solar farms can support the transition to a more sustainable energy system and help combat climate change.

Financial return

Investing in solar farms can provide an excellent financial return. Moreover, as the demand for renewable energy increases, the value of is also likely to increase.

In addition, sometimes governments offer financial incentives and tax breaks for investing in renewable energy. This can help reduce the initial investment cost and increase the potential return on investment.

There are many ways to invest in or build solar farms and achieve strong financial returns. Some of these briefly include:

  • Selling the energy to companies directly, like a mining company, for example, instead of these companies buying from an energy retailer, can be organised via a power purchase agreement, lease agreement or other instruments.
  • Supplying the electricity to an energy retailer directly or another market participant for their customers’ supply.
  • Offering electricity on the electricity market. Based on the size of the solar system, there are different ways that this can be organised.
  • When the solar farm is below 5MW in capacity, all electricity gets paid at the variable market rate, and the application and connection requirements are more straightforward than for larger systems.

Connecting to the grid can be a challenge.

Sometimes solar farms require significant local grid infrastructure upgrades, which can add to the costs. For this reason, farms are usually built close to existing grid infrastructure.

Larger systems also require a complete listing on the National Energy Market and a requirement to bid for the electricity supply for each market period (in 5-minute intervals), creating more complexity.

As an emerging technology and adapting market, there are increasing variations in developing, contracting and selling electricity from solar farms.

Community-based solar farms allow for community ownership, where residents or investors can buy a share for an investment return and or benefit from the lower cost of solar electricity.

solar farm

Energy independence

By investing in solar farms, communities and countries can become more self-sufficient in energy production. This can help reduce reliance on imported energy sources, which can be subject to price fluctuations and supply disruptions. In addition, producing energy locally can help stimulate the local economy by creating jobs and supporting businesses involved in making, installing, and maintaining.

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