A solar farm is a large land area where multiple ground-mount solar tracking towers are installed. It can be on a working farm or other open and mostly unimproved lands. The Solar Farm Developers industry is made up of companies that construct and install solar power grid systems, which are known as solar farms, on a utility scale.
The work executed within the industry includes reconstruction, rehabilitation, repairs et al. The capacity of large solar farms in Texas has increased in recent years. Facilities sized between 5 and 50 MW began to come online between 2010 and 2015.
Texas is ranked 8th in the nation for cumulative solar capacity with 965 MW installed through the third quarter of 2016. Of this, 756 MW were from solar power plants, 128 MW were from residential systems, and 91 MW were from non-residential commercial and industrial installations.
Steps on How to Start a Solar Farm in Texas
Table of Content
Conduct Market Research
When starting a solar farm business in Texas, you would need market research to be able to maximize profits from the business. The first step in the market research process should be to develop market-based research questions in line with your business goals and objectives.
In this regard, you should source information that will help you maximize your business, data that will give you information about what your potential market will be looking out for from solar farms, and also help you operate your solar farm business successfully in Texas.
a. Who is the Target Market for Solar Farm Business in Texas?
- Banks, Insurance Companies, and other related financial institutions
- Blue Chips Companies
- Corporate Organizations
- Real Estate Owners, Developers, and Contractors
- Research and Development Companies
- The Government (Public works department)
- Schools (High Schools, Colleges, and Universities)
- Hotels
- Religious Organizations
- Individuals and households.
b. Is Solar Farm Business a Profitable Business in Texas?
Yes, the solar farm business is profitable in Texas. Data show that solar companies in Texas are offering lucrative leases, around $450 to $1,200 per acre per year with an increased rate. The leases range from 20-40 years, with the option for additional long-term renewals.
c. Are There Existing Niches in the Industry?
No, there are no existing niches in the solar farm business because a solar farm is a niche idea in the solar energy industry.
d. Who are the Major Competitors in Texas?
- Webberville Solar Farm
- OCI Solar Power Alamo 1 Solar Farm
- Texas Solar Farms – Residential Solar Installer
- Lily Solar, LLC
- Roadrunner solar project
- CPS Blue Wing Solar Farm
- Old 300 Solar Center
- Rambler Solar Facility
- Roserock Solar Facility
- Azure Sky Solar
- Sunnova Energy International Inc
- BNB Lamesa Solar LLC
- Emerald Grove Solar
- SOLAR SME, INC.
- Midway Solar Project Site
- South Texas Solar Systems
- O3 Energy
- Astrawatt Solar
- Brazoria West Solar
- CoServ Solar Station.
e. Are There County or State Regulations or Zoning Laws for Solar Farm Business in Texas?
Yes, there are zoning laws that require solar farm operators to follow the rules, including some that apply to players in the industry. Texas law requires anyone installing, or offering to install, a solar system on a home or business to have a Texas Electrical Contractor’s License (TECL) from the Texas Department of Licensing and Regulation (TDLR).
The company’s TECL must be clearly written on all proposals, contracts, invoices, and business cards. This application process allows the city’s zoning department to determine whether the solar farm facility meets the zoning rules for the community.
It also ensures that all solar farm facilities are properly licensed by county or state agencies. The solar farm shall be located only in those zoning districts in which solar farms are permitted use pursuant to the city zoning ordinance.
f. Is There a Franchise for Solar Farm Business?
Yes, there are franchise opportunities for the solar farm business, and here are some of them;
- REPOWER America
- SuperGreen Solutions
- US Energy Solutions
- RevoluSun
- GreenTech Design/Build
- Energy Efficiency and Sustainability Consulting (EES)
- Lighthouse Solar.
g. What Do You Need to Start Solar Farm Business in Texas?
- A feasibility report
- Business licenses and permits
- Equipment and solar farm
- Insurance
- Operational capital (For ongoing expenses)
Choose a Memorable Business Name
When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.
Some of the catchy business name ideas suitable for a solar farm business are;
Creative Solar Farm Business Name ideas
- Lamesa Energies© Solar Farm, Inc.
- Round Rock® Solar Farm, LLC
- Haskell James® Solar Farm, Inc.
- Grapevine Energy® Solar Farm, Inc.
- Richardson Remez™ Solar Farm, Inc.
- Grandeur Facility™ Solar Farm, LLC.
- York Island© Solar Farm, LLC
- Aubrey Energy® Solar Farm, Inc.
- Damon Justin© Solar Farm, Inc.
- Barrow Wackey© Solar Farm, Inc.
- Aubery Power® Solar Farm, LLC
- Webster Williams® Solar Farm, LLC
- Uvalde Technologies™ Solar Farm, LLC
- Hyatt Technologies© Solar Farm, Inc.
- Sun Energies® Solar Farm, Inc.
- Pasley Energies™ Solar Farm, Inc.
- Darwin Technologies™ Solar Farm, Inc.
- Richmond Energies© Solar Farm, Inc.
- Montgomery Technologies® Solar Farm, Inc.
- Amical Technologies™ Solar Farm, Inc.
Register Your Business
a. What Type of Business Structure is Best for Solar Farm Business in Texas?
There are several options to consider when registering an SFB, such as sole proprietorship, partnership, limited liability company (LLC), and corporation. But the one most players in this line of business consider is an LLC. It is considered because providers want to protect themselves from lawsuits.
b. Steps to Form an LLC
- Choose a name for your LLC.
- File articles of organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open Solar Farm Business in Texas?
- General Business License
- Zonal Permits
- Signage Permit
- Texas Electrical Contractor’s License (TECL)
- Operational State Facility Inspections
d. What Type of Certification is Needed to Start Solar Farm Business in Texas?
You don’t need any certifications to start a solar farm business in Texas.
e. What Documents are Needed to Open Solar Farm Business?
These are some legal documents that are required if you want to run a solar farm business in Texas;
- DBA
- EIN
- Business and liability insurance
- Federal Tax Payer’s ID
- Structural and Electrical Building Permits
- Texas Electrical Contractor’s License (TECL)
- State Permit and Building Approval (For your solar farm)
- Certificate of Incorporation
- Business License
- Business Plan
- Operating Agreement for LLCs
- Insurance Policy
- Online Terms of Use
- Contract Document
f. Do You Need a Trademark, Copyright, or Patent?
If you are starting a solar farm business in Texas, there may not be a need to file for intellectual property protection or trademark. The nature of the business makes it possible for you to run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start Solar Farm Business in Texas?
Solar farm installation costs fall between $0.82 to $1.36 per watt. That means that a 1 megawatt (MW) solar farm would cost between $820,000 and $1.36 million. These figures are based on the SEIA’s average national cost figures in Q1 2020.
Please note that for a megawatt solar farm, expect to spend $3 million developing it. For larger farms, expect to spend approximately $500,000 per acre. Solar farms that produce less than one megawatt of power usually cannot justify the cost of development.
b. What are the Costs Involved in Starting Solar Farm Business in Texas?
- Business registration fees – $750.
- Legal expenses for obtaining licenses and permits – $7,300.
- Insurance – $5,400.
- Rent/Lease – $250,000.
- Operational cost (salaries of employees, payments of bills et al) – $60,000
- Start-up inventory – $25,000
c. What Factors Determine the Cost of Opening Solar Farm Business in Texas?
- The size of the solar farm business
- The choice of location
- The required licenses and permits
- The cost of hiring and paying a business consultant and attorney
- The cost of promoting and marketing the solar farm business
- The cost of the insurance policy covers
- The cost of registering the business
- Cost of recruiting and training your staff
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
Yes, it is essential to build a new facility for your solar farm business, and it will cost you a minimum of $3.5 million.
e. What are the Ongoing Expenses of Solar Farm Business?
- Salaries of employees
- Maintenance of equipment
- Insurance
- Facilities cost
f. What is the Average Salary of your Staff?
- Chief Executive Officer (Owner) – $55,000 per year
- Head, Technical Services – $42,000 per year
- Solar Panel Installation, Repair, and Maintenance Engineers/Technicians – $37,000 per year
- Accountant – $34,0000 per year
- Marketing and Sales Officer – $32,000 per year
- Customer Care Executive/Front Desk Officer – $23,396 per year
- Cleaners – $18,000 per year
- Security Officers – $21,150 per year
g. How Do You Get Funding to Start Solar Farm Business?
- Raising money from personal savings
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank
- Source for soft loans from your family members and friends.
Write a Business Plan
a. Executive Summary
Darwin Technologies™ Solar Farm, Inc. is a U.S based and standard solar farm company. We have been able to secure a vast acre of land on the outskirts of Dallas, Texas. We are a solar farm company that is into the manufacturing of solar panels, solar panel installation, maintenance, and repair.
We are set to compete in the Solar Farm Developers industry not only in Dallas, Texas but also in the United States market at large.
b. Services
- Supply of solar energy
- CSP trough power plants construction
- CSP tower power plants construction
- Crystalline silicon solar power plant construction
- Thin-film solar power plant construction
- CSP power plant construction
- Other related solar panel installation, maintenance, and repair services.
c. Mission Statement
Our mission is to provide solar energy and professional solar panel installation, maintenance and repair services, and other related services that will assist businesses, individuals, households, and non-profit organizations in ensuring that their solar panels are always in good shape to produce the required power output.
We want to build a solar farm and solar panel installation, maintenance, and repair company that can compete with other leading brands in the industry.
Vision Statement
Our vision is to establish a standard solar farm and solar panel installation, maintenance, and repair company whose services and brand will not only be accepted in Dallas, Texas but also in other cities in Texas.
d. Goals and Objectives
The goals and objectives of the solar farm business are to provide an alternative source of energy via solar power (sunlight).
e. Organizational Structure
- Chief Executive Officer (Owner)
- Head, Technical Services
- Solar Panel Installation, Repair, and Maintenance Engineers/Technicians
- Accountant
- Cleaners
- Security Officers
Marketing Plan
a. SWOT Analysis
Strength:
- Location of solar farm facility in Texas
- Highly experienced and qualified employees and management
- Availability of additional service offering
- Highly secured and clean facility
- Excellent operational history
Weakness:
- Not enough existing clientele to run at full capacity immediately
- The owner is new to large-scale marketing
- We will need a loan to build our solar farm facility
- The owner is currently running the business solo and will need to manage construction/build out the existing business
- Lack of economies of scale.
Opportunities:
- A growing number of people are switching over to solar energy in Texas (Solar farms are more cost-effective in West Texas, where insolation levels are greater.)
- Build upon existing clientele
- Online market, services, new technology, and the opening of new markets.
- Favorable government policies.
Threat:
- Loans diminish profitability until they are paid off
- The first year will be financially tight while we gain customers and pay off loans
- Competition in the area could increase
- Management of employees requires time, money, and efforts
- Economic downturn; when the economy is bad it affects consumer spending which in turn impacts businesses negatively.
b. How Do Solar Farm Businesses Make Money?
Solar farm businesses make money by offering the following services;
- Supply of solar energy
- CSP trough power plants construction
- CSP tower power plants construction
- Crystalline silicon solar power plant construction
- Thin-film solar power plant construction
- CSP power plant construction
- Other related solar panel installation, maintenance, and repair services.
c. Payment Options
- Payment via bank transfer
- Payment with cash
- Payment via credit cards/Point of Sale Machines (POS)
- Payment via online bank transfer
- Payment via check
- Payment via mobile money transfer
- Payment via bank draft
d. Sales and Advertising Strategies
- Introduce your solar farm by sending letters to businesses, households, and other stakeholders in and around your city
- Advertise your solar farm on national dailies, local TV, and local radio stations
- Promote your solar farm online via your official website and all available social media platforms
- Hire the services of experts to make your brands the first choice in your city and other cities where it will be located
- Position your signage/flex banners at strategic places
- Create a loyalty plan that will enable you to reward your regular customers
Financial Projection
a. How Much Should You Charge for your Services?
The average cost to maintain solar panels ranges from $300-$700, with the average homeowner spending around $400 for cleaning and inspecting a basic 2KW solar PV system on a bungalow-style house. For the common residential TOU plan E-TOU-A, rates range from about $. 15/kWh for off-peak to about $. 40/kWh for peak hours.
b. How Much Profit Do Solar Farm Business Owners Make a Year?
The report shows that the average 1 MW farm owner can earn roughly $43,500 a year by selling its electricity to utilities. While landowners who lease their land out for a solar farm can earn about $250-$3,000 per acre/per year.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the solar farm
- The types of related services and products offerings
- The location of the solar farm
- The management style of the solar farm
- The business approach of the solar farm
- The advertising and marketing strategies adopted by the solar farm
- The number of years the solar farm is in business
d. What is the Profit Margin of Solar Farm Business?
The profit margin of the solar farm business is not fixed. Generally, solar farms offer a higher ROI than most other types of commercial properties. According to most sources, you can expect anywhere from a 10% to 20% return on your initial investment.
e. What is the Sales Forecast?
Below is the sales forecast of the solar farm business. It is based on the location of the business and other factors as it relates to such startups in Texas;
- First Fiscal Year (FY1): $550,000
- Second Fiscal Year (FY2): $780,000
- Third Fiscal Year (FY3): $1.2 million
Set Up your Shop/Office
a. How Do You Choose a Perfect Location for Solar Farm Business in Texas?
- The demography of the location
- The purchasing power of businesses and residents of the location
- Accessibility of the location
- The number of solar farms location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
b. What City is Best to Open Solar Farm Business in Texas?
- Dallas, Texas
- Fort Stockton, Texas
- San Antonio, Texas
- Grand Prairie, Texas
- McCamey, Texas
- San Angelo, Texas
- Kaufman, Texas
- Houston, Texas
- Austin, Texas
- San Marcos, Texas.
c. What Equipment is Needed to Operate Solar Farm Business in Texas?
Purchase solar panels, charging plugs, measuring meters, changeover box, transformer, safety gadgets et al.
Hire Employees
When hiring employees for a standard solar farm, plan to hire a competent chief executive officer (you can occupy this position), head of technical services, accountant, solar panel installation and maintenance engineers and technicians, cleaners, and security officers.
Launch the Business Proper
No solar farm opens its business without first organizing an opening party to officially launch the business. You can do a soft opening party if you are operating on a low budget or you can go for a grand opening party. With a proper launching of the business, you will officially inform people in your city that your solar farm business is open.
a. What Makes Solar Farm Business Successful?
- Hire competent, hardworking, and trustworthy staff
- Encourage the use of word of mouth to promote your solar farm business
- Leverage all available online and offline platforms to promote your solar farm business.
b. What Happens During a Typical Day at Solar Farm Business?
- The facility is open for the day
- Administrative work is done concurrently
- The solar farm is maintained and the power generated is distributed
- Surveillance is carried out
- Maintenance of the solar farm facility is carried out
- The facility is administratively closed for the day.
c. What Skills and Experience Do You Need to Build Solar Farm Business?
- Good solar technology and engineering skills and experience
- Good facility management skills
- Customer services skills
- Interpersonal skill
- Business management skills
- Bargaining skill
- Work experience in the solar farm industry
- Experience in managing people
- Experience in business administration.