April 2, 2020
In March 2020, Duke Energy Carolinas (DEC) announced that they are soliciting proposals for solar farms that are interconnected to one of Duke Energy's retail service areas in South Carolina. The purpose of this solicitation is to comply with Duke Energy's requirements under the South Carolina Distributed Energy Resources Program Act. The current solicitation is seeking 40 MWac of projects in service no later than 12/31/2022, and 14 MWac of projects in service no later than 12/31/2021.
For this solicitation, solar farm proposals shall each have a nameplate capacity size greater than 1 MWac but less than 10 MWac.
Landowners should allocate a minimum of 20 acres for a solar farm. Usually, a solar farm can not cover the entire area of a parcel due to local setbacks and other potential requirements. YSG Solar considers that at least 65%-75% of land can be utilized for a solar farm. So, as an example, if you have 100 acres, you will be able to use 65 - 75 acres of land.
Evaluating a solar farm and the market in general, the solicitation outlined above by Duke Energy is a small solicitation in the grand scheme of things. This solicitation is for smaller projects and smaller plots of land. To illustrate, each MW of solar takes up about 5 acres of land. The Duke solicitation is capable of providing value for land areas from 10 acres up to 60 acres.
The state of South Carolina has many larger solar projects that exceed 10 MW and will continue to have projects of this size built after the end of this Solicitation from Duke Energy.
Large solar farms exceeding 10 MWac may see long-term power contracts under a federal policy called PURPA.
How to Start a Solar Farm in South Carolina?
Identify if you have access to three-phase power, or transmission lines that are within 1,000 ft of your property line. Properties that are within 2 miles of a substation are ideal for a solar farm. You must have a minimum of 20 acres of flat usable land that is not in wetlands and does not have any environmental issues that prevent construction.
The first step in starting a solar farm is engaging with the local power company to have a feasibility study completed. Solar developers such as YSG Solar usually handle this process for property owners. This is because the initiation of a feasibility study requires tens of thousands of dollars and the entire investment may be lost if the project is not feasible. Collaborating with a solar developer such as YSG Solar is the best step for a party that is not familiar with the process of developing a power plant.
South Carolina solar incentives provide assistance in getting projects built and are supported on the state level. Incentives are usually collected from a surcharge that is billed on ratepayers' electric bills and distributed through a centralized incentive program.
South Carolina solar laws enable solar farm development and have been very favorable. This has encouraged the construction of solar farms and has helped reduce the wholesale cost of energy for the local community.
The largest SC solar farm power plant is currently located in Bowman, SC. In the next several years we anticipate that many other large solar farms will be constructed in areas such as:
Orangeburg County, SC
Greenville County, SC
How Much do Solar Farms pay per Acre in South Carolina?
In South Carolina, the price per acre can range from $500 - $750 per acre, with an annual escalation of 2%. For a small solar farm, this may equal $15,000 - $75,000 per year. Each year the rent per acre will increase by 2%. In addition to the rent payment, the solar development company will also cover the property taxes associated with the leased area.
Is a Solar Power Plant Profitable?
Yes. A solar power plant is profitable for the property owner, the investor, and the energy buyer. Solar farms can typically generate a 9% - 15% IRR (Internal Rate of Return). Solar farms tend to be categorized as fixed income since they are predictable and provide steady cash flow.
Can I put a Solar Farm on my Land?
If your land is relatively flat and you have at least 20 acres or more you can install a small solar farm on your property. Traditional medium-size solar farms require 100 acres or more of land. Larger solar farms require 1,000+ acres of land.
How Many Solar Farms are in South Carolina?
Currently, there are 122 active solar farms in South Carolina, with a total capacity of 1,158.72 MW.
Check in with YSG over the next few weeks to learn more about the following topics:
‘Solar Bill Approved as S.C. Legislative Session Ends’
‘South Carolina Solar Projects | Dominion Energy’
If you’re interested in leasing your land for a solar farm, contact YSG today. YSG Solar has over a decade of experience in the solar industry and is currently developing large-scale solar projects in a number of locations. Send us an email, or call the office at 212.389.9215 to learn more.