Choosing the Best Locations for Solar Energy: Factors to Consider

Strategic site selection is the cornerstone of a successful solar project. For solar energy developers, choosing the right site can make the difference between a high-performing, financeable project and one stalled by permitting, grid constraints, or poor production. Identifying a high-yield location requires a sophisticated balance of geospatial data, economic incentives, and infrastructural proximity. In this article, we break down the key factors solar developers should consider when evaluating land to identify projects that pencil, scale, and succeed long term.

Key Takeaways

• The top 3 states for solar development in 2026 are Texas, California, and Virginia.

• The best locations for solar development combine strong solar potential, accessible infrastructure, minimal land constraints, and favorable market conditions.

• Data is the key behind developing solar farms successfully. LandGate's platform stands out as one solution for solar developers to streamline their development process and conduct due diligence.

Best Locations for Solar Energy in 2026

In 2026, the U.S. solar market is defined by a massive surge in utility-scale capacity, with nearly 70 GW of new projects scheduled to come online through 2027 according to the U.S. Energy Information Adminstration (EIA), leading to a 21% increase in solar generation during both 2026 and 2027. While the "Sun Belt" remains dominant, the "Data Center Alley" and the Midwest are emerging as the new frontiers for high-yield development.

1) Texas: The Solar Powerhouse (ERCOT)

Texas has officially overtaken California as the primary engine of U.S. solar growth. By 2026, it is the top destination for utility-scale developers due to a perfect storm of factors, like the AI data center boom, increased grid capacity, and land deregulation.

• AI Data Center Boom: Skyrocketing demand from data centers in the Dallas-Fort Worth and Austin corridors is creating an insatiable need for 24/7 power, often paired with massive battery storage.

• Grid Capacity: The EIA expects solar generation in the ERCOT grid to nearly double by 2027.

• Land & Deregulation: Ample land availability and a deregulated market allow for faster project timelines compared to more restrictive coastal states.

Map of Solar Farms in Texas from LandGate

2) California: The Storage Leader

With a market share consistently exceeding 28%, solar energy has become the backbone of California’s grid. It now stands as the state’s largest single power source, often outperforming traditional natural gas generation. While California’s residential market has stabilized following NEM 3.0, the Utility-Scale + BESS (Battery Energy Storage System) market is thriving.

• Interconnection: Developers are focusing on sites that can integrate storage to capture "peak" evening prices, as solar already generates nearly 47% of the state's electricity during the day.

• Policy Stability: California remains the most mature market with the most established "Social License to Operate" and clear long-term decarbonization mandates.

• Rule 21 Reform: Ongoing legal and regulatory pressure on the major utilities (PG&E, SCE, SDG&E) is pushing for faster interconnection timelines.

3) Virginia: The Industrial and Data Hub

In 2026, Virginia has solidified its position as the most strategically important solar market on the East Coast. While states like California and Texas lead in total acreage, Virginia offers a unique "demand-pull" economic model that makes it a top-tier destination for developers.

• Data Center Alley: As the global hub for data centers, Virginia's utilities are under immense pressure to source carbon-free energy to meet corporate ESG goals (e.g., Google, Amazon, Microsoft).

• PJM Interconnection: While grid queues in the PJM region have been a bottleneck, projects that secured their spot are now reaching the construction phase, making this a high-value region for 2026 COD (Commercial Operation Date).

• Grid Resilience Incentives: To manage the massive load from data centers, the state is incentivizing developers to pair solar farms with energy storage systems.

4) The Midwest (Ohio and Illinois): The New Frontier

In 2026, the Midwest has moved from a "fringe" solar market to a primary frontier for utility-scale and community development. While the Southwest offers more sun, the Midwest offers available grid capacity, lower land costs, and a massive industrial demand that is currently outpacing supply.

• Illinois Adjustable Block Program: Illinois remains the gold standard for state-level support. By 2026, the state has expanded its Adjustable Block Program, offering some of the highest Renewable Energy Credit (REC) values in the country for community solar.

• Efficiency Gains: Solar panels actually perform more efficiently in the cooler temperatures of states like Illinois and Wisconsin than in the extreme heat of the desert, where high temperatures can cause a 10–15% drop in voltage efficiency.

• Industrial Decarbonization: High-energy-intensity industries (automotive, steel, and heavy manufacturing) are under pressure to decarbonize. In 2026, many of these companies are bypassing utilities to sign direct Virtual Power Purchase Agreements (VPPAs) with local solar farms to meet their 2030 net-zero targets.

Choosing the Best Locations for Solar Energy: Factors to Consider

The best locations for solar development combine strong solar potential, accessible infrastructure, minimal land constraints, and favorable market conditions- giving developers the confidence to move projects from concept to completion.

1) Land Suitable for Solar Farms

The land needed for utility-scale solar projects varies greatly depending on the installation's capacity and the solar technology used. Developers must secure land that is suitable for solar installations and available for purchase or lease, often involving negotiations with landowners or local communities. Generally, a utility-scale solar farm requires about 5 to 10 acres per megawatt (MW) of installed capacity. This means a 100 MW solar farm could need between 500 to 1,000 acres.

First, solar resource quality matters. Areas with consistent, high irradiance deliver stronger energy production and more predictable returns, though recent advancements in solar technology allow solar panels to produce energy even on cloudy days. Similarly, ground-mounted solar installations require significant, relatively flat land, clear of obstructions like trees or buildings that could shade the panels and reduce efficiency. Soil conditions must also be suitable for mounting structures.

A tool that developers can use to estimate energy output from a solar farm on a specific parcel is an 8760 Report. An 8760 Report examines and analyzes the expected energy generation (or load) for every hour across a span of 12 months. The model simulates the output for all 8,760 hours within the specified time frame, allowing for a comprehensive understanding of the project's performance.

2) Zoning & Permitting

The development of utility-scale solar projects involves several key stages, including permitting processes and zoning. These stages address various factors that influence the ease of constructing solar farms, such as site accessibility, ground conditions, and the availability of local labor and materials.

Zoning regulations play a significant role in the timeline and cost of solar farm development. Projects must comply with local land-use laws, which may restrict certain areas from being used for solar energy. The permitting process can be complex and time-intensive, requiring multiple approvals from local, state, and sometimes federal authorities.

3) Land Accessibility

Site accessibility is critical for solar site selection. The site must allow easy access for heavy machinery and equipment needed to install solar panels. Ground conditions are equally important. The land should be relatively flat and free of obstructions like trees or buildings that could cast shadows on the panels and reduce their efficiency. Additionally, the soil must be stable enough to support the mounting structures.

4) Interconnection Delay Mitigation

One of the most critical aspects of any solar project is the grid connection. Substations are critical to the infrastructure of utility-scale solar energy, acting as a key link between power generation and end users. They transform the electricity generated by solar farms to suitable voltage levels for long-distance transmission. This step is essential to minimize energy loss and ensure electricity reaches consumers at the correct voltage.

The efficiency of power transmission is heavily influenced by the proximity of solar farms to substations. Sites near existing grid infrastructure are typically faster and less expensive to develop, while locations in congested or capacity-limited areas can face costly upgrades or delays. Shorter distances mean reduced transmission losses, making it crucial to consider substation locations when planning solar farm sites. Substation capacity and existing grid infrastructure must also be evaluated to ensure compatibility with the project's needs.

Locational Marginal Price (LMP)

Locational Marginal Price (LMP) is a critical factor that solar farm investors must consider when sourcing the best places for solar energy. LMP refers to the cost of delivering an additional unit of energy to a specific location at a specific time. It varies based on demand, supply, and the capacity of the transmission network, and it can significantly impact the profitability of a solar project.

For a solar farm, the energy produced is typically sold to the grid, and the price received for this energy is often based on the marginal unit. Higher LMPs mean higher revenue for the solar farm, making locations with consistently high LMPs more attractive to investors. Conversely, areas with lower LMPs might yield lower returns, potentially making them less viable for solar investment.

Available Transfer Capacity (ATC)

Available Transfer Capacity (ATC) measures the additional electrical power that can be reliably transferred over the transmission network while meeting all safety requirements. This data is essential in the energy sector, as it helps operators determine how much power can be added to the grid without risking instability or reliability issues. Utility-scale development projects depend on existing grid capacity or require grid upgrades to proceed.

The LandGate platform is a valuable tool for analyzing LMP and ATC. Subscribers can access substation details that include comprehensive substation data, allowing for effective utility-scale solar site selection.

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5) Environmental Impact Considerations

Environmental impact assessments (EIAs) are a crucial part of permitting. These assessments evaluate potential environmental effects of the project and propose measures to minimize harm. They typically examine factors such as impacts on wildlife, water resources, and local ecosystems, ensuring the project aligns with environmental standards.

Solar developers can use LandGate's comprehensive Environmental Reports to conduct due diligence on properties they're interested in developing for solar farms, wind farms, data centers, and more. These reports offer a concise view of the various protected lands, species, and resources across the United States in order to provide a snapshot view of challenges and potential delays your project might face, detailing areas of high, moderate, and low risk, in addition to providing extensive data on the factors.

5) Policies, Incentives, and Market Demand

Government policies, incentives, and market demand can significantly impact project viability. Supportive state or local renewable energy policies, tax incentives, and strong utility or corporate demand for clean power can turn a good site into a great one. States like Illinois (Adjustable Block Program) and California (RPS, net-metering policies) offers attractive incentives for solar developers in 2026.

How to Choose the Best Locations for Solar Development: A Data-Driven Approach

In the rapidly expanding world of renewable energy, finding the perfect site for your solar project can be a challenging task, but utilizing the right site planning software can help streamline the process and get projects to the queue faster. LandGate's solar site selection software is an example of a tool solar developers can use to plan effective projects and conduct due diligence.

The platform leverages advanced data science and machine learning algorithms to provide you with comprehensive, real-time insights into potential site locations for your solar energy projects. It evaluates and ranks sites based on various factors such as solar irradiance, land topography, proximity to transmission lines, environmental constraints, and local regulations.

LandGate's tools for solar farm due diligence allow you to model full utility-scale projects instantly:

• Get your solar projects into the queue & financed faster

• Determine buildable area with custom setbacks/exclusions & exportable pricing data

• Evaluate any solar project in minutes with fully integrated data and potential revenue modeling

• Site analysis, due diligence, and feasibility studies utilizing outputs for interconnection queue submissions or utility RFPs

• Industry standard outputs & economics including 8760 reports and complete feasibility studies

LandGate's Platform doesn't just provide data; it delivers actionable insights. It allows you to determine the best sites for solar farms, visualize and analyze the data in an intuitive and user-friendly interface, examine an interactive solar energy potential map, and aid in site selection and layout, thus enabling you to make informed decisions quickly and confidently.

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Key Terms

Locational Marginal Pricing (LMP)

Locational Marginal Pricing (LMP) is the actual market value of electricity at a specific point on the grid. While a retail consumer might pay a flat rate for power, a solar developer selling into the wholesale market is paid a price that fluctuates by the minute and by the mile. LMP is not a single number; it is the sum of three distinct economic factors at a specific "node" (a substation or connection point.

Available Transfer Capacity (ATC)

Available Transfer Capacity (ATC) is the amount of unused transmission capacity on the electric grid that is available to move additional electricity from a generator to where it’s needed, without violating reliability or safety limits. In simple terms, ATC tells developers how much new power can be injected into the grid at a specific location without triggering congestion, curtailment, or the need for costly transmission upgrades.

8760 Report

An 8760 Report is a time-series energy analysis that models how a power generation project, such as a solar or solar-plus-storage facility, will perform during every hour of the year (8,760 hours). Rather than providing a single annual production estimate, an 8760 Report shows hour-by-hour generation, delivery, and value, giving developers, utilities, and investors a much more realistic view of how a project interacts with the grid and energy markets.

PJM Interconnection

PJM Interconnection is a regional transmission organization (RTO) that coordinates the movement of wholesale electricity across a large portion of the eastern United States and operates competitive electricity markets within that region. PJM manages the high-voltage transmission grid and wholesale power markets for 13 states and Washington, D.C., including all or parts of Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and Delaware.