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Expansion of Solar Farms in the US

Updated: Nov 2, 2023

How many solar farms are built every year in the US? Find out how the capacity, acreage, and production of solar farms has evolved with time

The United States is experiencing an expansion of solar farm development. Political, corporate and private interest groups have all taken steps to ensure renewable energy projects continue to be developed throughout the country.

Large Federal Incentives (ITC) for Solar Projects

Federal policies such as the Investment Tax Credit (ITC) play a massive role in how many solar energy projects are built every year. The ITC reduces the overall costs related to the construction and development of newly built solar farms by up to 30% during the program's early days. In 2021 the ITC is offering developers a 26% discount on their federal taxes. During the eleven year period from 2006 to 2017, the number of solar farms built per year has accelerated from less than 10 projects per year to peaking at over 300 solar projects being installed in 2017. The ITC was first enacted in 2006 and was a major milestone for the solar industry. The explosive growth in solar energy projects was largely attributed to the White House's and other policy makers’ ability to influence private industry. While ITC clearly stimulated the solar industry's growth for over a decade, another interesting trend evidenced in Figure 1 is the deceleration of solar project construction between 2016-2020. This trend has also largely been attributed to Washington’s effect on private industry however for a completely different reason. The deceleration of solar energy during this period can be explained by two factors: (1) the lower cost of oil & gas energy; (2) the new administration policies which many argue paid less attention to the solar and renewable energy industry. However, it is worth noting the ITC was still offered to developers throughout this time period. Due to the new administration and its policies, investments in green projects and renewable energy have increased exponentially. So, we expect the planned farms in 2021 and 2022 to increase substantially.

Reduction of Capital and Operating Costs Over Time

The capital and operating costs have also decreased by 50% since 2014, making the economics of solar energy production even more attractive to developers and investors. The capital costs, federal tax credits, operating costs, and incentives are all modeled accurately and constantly updated on LandGate’s solar economic data across the US.

Large State and Local Incentives for Renewable Energy

One of the largest factors playing into the economics of a solar farm's cash flow and the rental rate that can be offered for a solar lease (solar lease value) is the state and local incentives to renewable energy projects. These incentives come in the form of Renewable Energy Credits (REC), Performance-based incentives (PBI) or Feed-In Tariff (FIT). In addition to the federal ITC, many states and local electric utilities offer their own lucrative solar incentives which, in some cases, have created significant economic advantages for solar developers throughout the broader energy market. Developing and operating a solar farm in certain areas around the country has proved to earn highly lucrative returns on investment when taking these policies into consideration. Some argue that these policies are the driving factor on whether or not a project becomes economically viable, meaning it is a “make or break” factor when considering new project locations across the country. In some cases, the ITC is not enough, and additional incentives offered by the state or local utilities are required to incentivize solar energy projects in certain regions. Most states will create these incentives to bring electricity to underserved areas. The incentives may only apply to a specific region within the state and can change with time.

These programs typically come in the form of a performance-based incentive or an REC purchasing program that allows solar generators to sell the renewable energy certificates that are generated for every megawatt hour of energy they produce. The buyer of any renewable energy certificate can make the claim that their energy was produced from a renewable resource. Typically, these are used to satisfy certain states’ renewable portfolio standards which dictate the limits on fossil fuel usage that an electric utility must follow or face fines and other penalties. The total number of installed solar farms has increased dramatically since 2011, accelerating to a peak in total capacity installed per year in 2016. It is also worth noting the amount of solar farms labeled as “planned” or “building” in 2020-2022. This suggests many solar farms that are being proposed ultimately do not get built. This is due to a number of reasons, however many suggest it is most influenced by infrastructure planning and the uncertainty of being able to connect the solar farm to the grid. The process related to infrastructure studies for transmission lines and interconnection into substations required by electric utilities or transmission operators can be expensive and drawn out.

Sometimes these interconnection studies can push back a solar farm's development 2 - 4 years or kill the entire project if it is found that no further electricity can be added onto the substation or transmission line the developer wishes to use. This generally leaves the developers negotiating with landowners using a solar lease option that can allow them 2 - 4 years of exclusive rights to commit to a solar project without any financial risk. Many solar farms in operation today likely started as a lease option. The substation, or point of interconnection, has a fixed amount of energy capacity that can be added (sometimes there will be no spare capacity), without the developer having to pay for extremely expensive upgrade costs. While the developer conducts an interconnection study to figure how much energy they can add onto the line, they will make sure to lease up as much property surrounding the substation as possible.

With the spare capacity to work with, they will have enough land to build a very large solar farm. However in many cases, the developer discovers there is very little energy that can be added onto the substation after they have extended lease options on too much land. When developers find out late in the planning process that they only need a few hundred acres for their project but have leased out thousands, this ultimately drives up the number of planned solar projects that did not get turned into active solar farms in the statistics. Get accurate solar data to fast-track your leasing decision before the Engineering study:

  1. Interconnect queues

  2. Remaining capacity at substations

  3. Remaining capacity at transmission lines

  4. Government incentives

  5. Capex, Opex

  6. Full Economics of each solar location & farm in the US

solar farm identification on the landgate platform

Technology Increasing Solar Farm Capacity with Time

The solar industry, together with the federal government, has done an amazing job at reducing costs and driving improvements in their project economics, thus increasing the number of viable projects nationwide. This trend is poised to continue and dramatically accelerate as seen in the graph above plotting a solar farm's capacity / acre of land used over time. The industry now faces the challenge of improving on the technology. This is done by groundbreaking research into advancing solar energy and our ability to transform the sun's rays into electricity and delivering it to consumers as efficiently as possible.

Technology Increasing Solar Farm Capacity With Time

One of the most important factors driving the improvement in solar capacity per acre stems from the improvements in solar panel efficiency. The average solar panel currently deployed in active operating solar farms converts approximately 15-20% of the sun's energy into electricity. Advances in solar panel technology have seen the efficiency increase by nearly 40%. The average solar farm capacity in 2020 more than doubled compared to 2019, meaning the average 2020 solar farm can produce twice the power output as the average 2019 solar farm. There is massive room for improvement on both the generation and transportation sides of the industry. In many cases solar farms may lose an additional 10-15% of production through transportation losses delivering the electricity to the end user. Improving project economics across the board will open up new regions as viable generation sites that were previously considered un-economic.

Developers and landowners are expected to see considerable increases in their projects and properties’ resource value, respectively, as these technological and economic efficiencies are realized. Interestingly, while the overall solar energy capacity installed per year doubled, the amount of acreage used to deliver that capacity remained relatively the same. In just a couple of years the Solar Energy industry has already proven its ability to double the production output. The solar industry is set to experience significant growth and will require large amounts of land and accurate data resources to deliver on industry goals. Make sure to contact LandGate to utilize the valuable data resources that can fast-track the planning process before entering into any land negotiations.



  1. Get the contact information of the high-value landowners matching your solar buy/lease criteria.

  2. Focus on the Most Profitable Solar Areas

viewing solar farm listings on the landgate platform


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