How Much Does A Solar Power Plant Cost To Build?

The type of planned facility is one of the most important elements impacting building costs for power producing facilities. Depending on whether they are coal-fired power plants, natural gas-fired power plants, solar, wind, or nuclear generation facilities, construction prices can vary significantly. Construction costs between different types of production facilities are a crucial consideration for investors in power generation facilities when determining whether an investment will be profitable. In order to evaluate a suitable rate of return, investors must also consider other elements such as continuing maintenance expenses and future demand. The capital cost of bringing a plant online, however, is at the heart of any estimate. As a result, a quick rundown of actual building prices for various types of power plants is a good place to start before diving into additional factors that influence power plant construction costs.

When estimating power plant building costs, keep in mind that actual construction prices are influenced by a variety of factors. Access to resources that drive power production, for example, can have a significant impact on construction costs. Solar, wind, and geothermal resources are unevenly dispersed, and the cost of accessing and exploiting them will rise over time. Early market entrants will benefit from the most cost-effective resource access, whereas newer projects may have to pay much more for comparable resources. The regulatory environment in which the power plant is built can have a significant impact on the construction project’s lead time. This might result in greater interest accrual and overall construction costs for projects with a large initial investment in construction. Refer to the Capital Cost Estimates for Utility Scale Electricity Generating Plants published by the US Energy Information Administration (EIA) in 2016 for further information on the plethora of factors that can influence power plant building costs.

The cost of constructing a power plant is expressed in dollars per kilowatt. The EIA is the source of the data presented in this section. We’ll be using power plant construction costs for power producing facilities built in 2015, which can be found here. This is the most recent data available, however the EIA is anticipated to disclose 2016 power plant building costs in July 2018. The EIA’s publications are one of the most significant sources of information for people interested in power plant building costs. The EIA data is important in illustrating the complicated nature of power plant building costs, as well as the numerous variables that can affect not only power plant construction costs but also ongoing profitability.


In 2015, power plants that used wind as a renewable energy source added the most capacity to the system without significantly increasing fuel costs. In the United States, the use of wind as a source of electricity has gradually increased. Wind energy power plants added 8,064 megawatts (MW) of capacity in 2015. When compared to petroleum-based generation plants, which added 45 MW of capacity, the tremendous rise of wind-powered power plants is clear. The average cost of constructing a wind power facility was $1,661 per kilowatt of installed nameplate activity. For 66 generators, this resulted in a total construction cost of $13,395,684.

It’s vital to remember that wind turbine building is greatly influenced by the existing regulatory environment and generation prices. Consider that, according to this EIA study, wind-powered power plants installed less than 900 MW of capacity in 2013, compared to almost 8,000 MW in 2015. The most significant reason for this was the expiration of a federal production tax credit at the end of 2012, which urged investors to delay new wind power generator construction until the tax credit was renewed in early 2013, which they did. Given the gap in output, the additional capacity added in 2015 can be viewed as a resumed investment once a more favorable regulatory framework was in place.

Natural Gas

Natural gas-fired power facilities have been a major driver of grid expansion in recent years, and 2015 was no different. Natural gas power stations installed 6,549 megawatts of capacity in 2015. Construction expenditures for natural gas power plants in the same year averaged $812 per kilowatt hour, totaling $5,318,957 for 74 units. In natural gas power plants, there are three major types of technology used. Each technique has a significant impact on the overall construction expenses. Internal combustion engines accounted for only a minor portion of the capacity added, with mixed cycle natural gas power plants (4,755 MW) and combustion turbines (1,553) accounting for the rest of the capacity added (240). However, this does not give the whole story.

Combined cycle plants, which have at least one combustion turbine and one steam turbine, are significantly more efficient than other varieties. While this decreases long-term operational costs, it also raises construction capital costs. Combustion turbine natural gas power plants are less efficient than combined cycle power plants, resulting in higher operating costs but lower construction costs. Internal combustion engines and combustion turbine power generators both have the advantage of being built faster than combined cycle power plants. As a result, they’re now commonly used in instances where temporary capacity expansions are required to satisfy increased demand. Furthermore, despite the fact that combustion turbine plants are less efficient, they are only used to satisfy peak demand. Combined cycle plants, on the other hand, are more commonly employed to fulfill baseline demand loads due to their superior efficiency and lower operating costs.


The cost of building a solar power plant, like that of a natural gas plant, is greatly reliant on the underlying technology used in the facility. Furthermore, the capacity provided by solar power plants is determined by the technology used. As a result, the intersection between solar power plant construction costs and productive capacity is a key factor for investors to consider. For a total capacity increase of 3,192 MW, the average construction cost for all types of solar photovoltaic (PV) power plants was $2,921/kw. Solar PV plant construction expenses was $9,324,095 for 386 total generators. When compared to natural gas and wind, these figures show that solar plants produce less capacity gains per generator on average. Varying types of solar PV installations produce different amounts of energy.

The distinction between fixed-tilt and axis-based tracking systems is significant. Axis-based tracking systems are more expensive to install, but they have a larger production capacity than fixed tilt tracking systems, which could help offset ongoing operating expenses. Another thing to think about is the sort of solar PV system. Crystallized silicon and thin-film CdTe are the two most common varieties on the market. These many categories each have their own set of benefits and drawbacks. Thin-film technology is newer, and thin-film plants have a higher average capacity than crystalline silicon plants (74 MW versus 7 MW). Construction costs are comparable for both plant types. For example, crystalline silicone plants cost $2,920/kw on average for axis-based tracking installations, compared to $3,117/kw for thin-film plants. Fixed and axis-tilt crystalline silicon installations considerably outpaced thin-film installations in 2015, demonstrating a strong market preference for crystalline silicon solar power plants.


Despite the fact that few nuclear power plants have been built in recent years, nuclear power plants remain an important part of our energy infrastructure. In reality, the Watts Bar Unit 2 nuclear power station, which was finished in 2016, was the most current nuclear power facility to be completed. This project was completed after decades of delays, approximately 20 years after the previous nuclear power plant in the United States, the Watts Bar Unit 1, was completed in 1996. There are no entirely accurate or up-to-date nuclear power plant building costs available due to the paucity of new nuclear plant construction. According to an EIA economic projection provided in 2018, nuclear power plants started in 2016 would have a base overnight cost of $5,148, excluding any changes that may occur in the interim. One thing to keep in mind about the nuclear business and nuclear power facilities is that they take a long time to build. According to the EIA, if building began in 2016, a nuclear reactor and power plant might be operational by 2022. If building prices as a whole continue to climb at their current rate, nuclear power station construction will be more sensitive to cost overruns.

How much does it cost to build a solar power plant on one acre of land in India?

Photovoltaic panels are used to generate energy at the Solar Power Plant. Solar panels generate direct current electricity here. As a result, a solar inverter is required to transform this energy into an alternating current suitable for household or industrial use.

Area needed for the construction of a 5 MW solar energy power plant in India

It is vital to study the size of land required for the building of a Solar Plant before proceeding.

  • Because vast arrays of photovoltaic panels must be exposed to sunlight, solar plants require a lot of room.
  • Solar Power Plants require at least 5 acres of land every 1 MW of production, so a 25-acre area is required to generate 5 MW of energy.

However, picking a site isn’t enough. The project’s development also necessitates legal approval. Furthermore, environmental, safety, and health authorities must approve your project.

Cost of land for construction of 5 MW solar plant

  • The price of land is Rs.5 lakh per acre (1MW plant requires a minimum of 5 acres of land).
  • The projected land cost per acre is Rs.5 lakhs. For a 1 MW plant, a minimum of 5 acres of land is required, implying that a 5 MW Solar Power Plant will cost Rs. 1 crore 25 lakh.
  • Grid extension might cost up to Rs. 15 lakh per kilometer, depending on the capacity of the extension lines (range- 11kV to 123kV). As a result, the cost of grid extension is determined by the distance between the location and the nearest substation.
  • If trackers are utilized in the power plant, an additional Rs. 2 crore (Rs. 40 lakh/MW) is added to the project cost.

Taking all of these considerations into account, a 1 MW Solar Plant will cost around Rs. 4 crore to build, implying that a 5 MW Solar Plant will cost around Rs. 20 crore to build.

Profit earned by a 5 MW solar plant in India?

In India, the cost of a 5MW plant is expected to be between 34.5 and 35 crores. Thus, Rs.45,000 to 60,000 can be generated everyday with 20k – 20.5k units of power. As a result, after deducting minor O&M costs, a total profit of Rs 1.75 crores can be expected after a year.

Due to the national average of four peak sun hours per day, a 5 MW solar plant would produce 6000 MWh per year. As a result, a 5 MW Solar Plant can generate annual revenue of between Rs. 1.5 and 1.75 crores.

You might also be interested in this article: How Much Electricity Does a 1MW Solar Power Plant Produce in a Month?

How much does a solar farm with a capacity of 5 megawatts cost?

The cost of installing a solar farm ranges from $0.89 to $1.01 per watt. A solar farm with a capacity of 1 megawatt (MW) would cost between $890,000 and $1.01 million.

The SEIA’s average national cost figures for Q4 2021 are used to calculate these figures. They also assume you already own the property on which the solar farm will be built.

Solar farms are significantly less expensive to develop and maintain than rooftop solar panels. Residential solar panel systems, which are typically under 20 kW, cost $3.06 per watt, according to SEIA data.

In other words, a solar farm’s cost per watt is less than a third of the cost of installing home solar panels.

Solar farms’ low cost is also one of the reasons why utilities are increasingly turning to them when building new power producing capacity. Solar is no longer just one of the cheapest renewable energy sources; it is now also competitive with fossil fuel energy sources!

How much electricity can one acre of solar panels generate?

Overall, solar panels offer a novel and lucrative option to supplement your income. Because the industry is rapidly expanding, you can expect to be successful.

The efficiency, cost, and amount of power produced by various types of solar panels vary. However, 40 percent of solar farms require approximately 3.5 acres to produce one GWh of electricity every year. This equates to 285.71 MWh/acre/year or 0.28571 GWh/acre/year.

Nonetheless, the quantity of solar irradiation in your area will affect the amount of power generated by your panels. How much does one acre of solar panels bring in?

Solar electricity might be sold at $27.40 per MWh in 2019. As a consequence, you might be able to earn $7,828.45 per acre.

Continue reading to discover more about solar farms, how to build one, and how to get the most money from them.

What does it cost to operate a power plant?

The cost of generating electricity at a nuclear power plant in the United States The cost of electricity generated by nuclear power facilities in the United States was $30.41 per megawatt hour. The greatest production costs were in 2012, when they reached over 44 US dollars in 2019 prices, although they have steadily fallen since then.

Is it possible to make money from a solar farm?

Solar farms can be quite successful across a wide range of price points, ranging from $20000 to $60000 per acre. It truly depends on a thorough examination of each unique property.

The essential prerequisites for any developer intending to build a solar energy plant are level land with no shade and a good irradiance value in the region.

Due to economies of scale throughout the acquisition and construction phases, larger farms yield higher financial profits. Profits would increase as the number of acres increased, but the capital costs may be in the millions of dollars.

Is it profitable for solar companies?

When you run a leased solar panel business, your profit is totally dependent on the amount of panels you install. A normal annual return is around 6%, although this necessitates a long-term investment strategy on the part of the business owner. Profits of $5,000 to $10,000 per job are possible for companies who exclusively install panels for customers who pay in full at the time of installation. This, however, necessitates a continual flow of new contracts. If you work on a large industrial contract, you can make hundreds of thousands of dollars over the course of a year.

How many dwellings can a megawatt of electricity power?

The International Energy Association (IEA) has revised its study on global solar power deployment. The research, Technology Roadmap: Solar Photovoltaic Energy 2014 Edition, responds to a dramatic acceleration in solar power growth by estimating that solar power will generate 16 percent of global energy in 2050. This blog post summarizes important findings from the IEA report, examines progress in the United States toward the IEA report’s goal, and suggests specific actions that states and the federal government should take to enhance U.S. solar development leadership.

The IEA had to considerably update the Technology Roadmap for solar power that it had released in 2010 because to dramatic decreases in the price of solar electricity and the resulting faster solar development. The International Energy Agency (IEA) begins its report by highlighting the remarkable fact that the globe has added more solar power in the last four years than it has in the previous forty. Solar panels were installed at a staggering rate of 100 megawatts per day in 2013. To put that figure in context, the Solar Energy Industries Association (a US trade group) estimates that 1 megawatt of solar power generates enough electricity to power 164 American homes. On average, 100 megawatts of solar power can power 16,400 households in the United States. Considering that the United States is ranked 13th in energy efficiency (behind China and India) by the American Council for an Energy-Efficient Economy, deploying enough power to power 16,400 US homes in a single day is not terrible.

Despite this tremendous achievement, significantly more solar growth is required if the world is to meet the IEA’s objective of solar power providing 16 percent of global energy. In fact, according to the International Energy Agency, annual solar deployment would need to increase to an average of 124 gigawatts per year by 2025, which is approximately four times the rate of deployment in 2013. Fortunately, the IEA also points out that, due to predicted continued price reductions in solar power, the yearly average investment will only need to be double that of 2013.

To achieve this level of increased and sustained investment in solar power, countries around the world will need to take major policy actions. Although solar power has become cost-competitive in some markets, the IEA cautions that governmental support will be required in many places to enable solar power costs continue to fall, particularly in markets where electricity prices do not reflect greenhouse gas emissions or other environmental externalities.

The report’s most important message is a plea for solid policies to boost solar energy (similar to the call I made in an earlier blog). The United States falls very short in this area. Federal tax incentives for renewable energy, for example, are short-lived, and their unpredictability leads to boom-and-bust growth cycles, as I highlighted a few weeks ago. Meanwhile, support for solar power and renewables in general varies greatly across the United States. California’s Renewable Portfolio Standard and New Jersey’s requirement that builders of new homes offer to install solar electricity are two examples of ambitious schemes. Other states provide no financial incentives at all. The IEA states that China and Japan are outpacing the United States in solar development, which is likely due to a lack of stable, predictable policies in the United States. According to Bloomberg News, developing countries are creating renewable energy at twice the rate of developed countries like the United States. We can and should do better.

Nonetheless, there is reason to be optimistic. Solar power will be cost-competitive in 47 U.S. states by 2016, according to a Deutsche Bank prediction published by Bloomberg News. This progress should result in a surge in new solar energy development. Some progress has already been made. Georgia Power, for example, a subsidiary of the Southern Company (one of the country’s major coal-fired power plant owners), recently announced plans to generate solar power for army facilities in Georgia. Southern Power has been adding solar capacity to its portfolio, now totaling 338 MW. North Carolina’s Duke Energy is following a similar path, having just invested in 278MW of solar capacity. Of course, this is still a long way from realizing the full technical potential of solar energy in the United States. In Los Angeles, for example, rooftop solar might generate 19,000MW, dwarfing these utility investments. Nonetheless, the progress we’ve already made provides a solid foundation for future advancement and gives us reason to be optimistic.

What is the size of a 10 MW solar farm?

The exact dimensions of 15 acres per MW will be determined during the design-build phase, depending on currently available and known information. As a result, a 10-megawatt solar farm near the landfill would require roughly 150 acres, or half of the available land.

Is it wise to invest in a solar farm?

Solar energy, for example, does not emit greenhouse gases and hence benefits the environment. Investors, on the other hand, might be interested in them. This is why.

Stable income generation

Although huge solar farms are expensive to build, once they are completed and contracts with utilities are signed, investors can expect a steady return of 6 to 8% per year. Although solar systems must continue to pay for upkeep and rent to the landowner, they do not require costly inputs such as fuels. This allows them to generate a steady supply of dividends.

Long-term contracts

Solar farms strive to sell the electricity they generate through contracts with utilities. Utility contracts can be lengthy, ranging from 10 to 20 years. Most utilities have excellent credit ratings and are unlikely to default on payments, particularly when providing a service that is essential to the everyday lives of hundreds or millions of people.


Solar farm revenues are uncorrelated with stock market returns, allowing you to diversify your income streams. (Of course, if you opt to invest in solar farms through solar stocks, this does not apply.)