What is a solar farm?

A solar farm is a large-scale solar system connected directly to the power grid. The solar energy flows into the electricity grid and anyone using electricity at a nearby site is likely to be using the energy from the solar farm.

Community members might decide to set up and collectively own a solar farm. They will need to sell the solar power through an electricity retailer, who will onsell it to electricity customers. The revenue generated from selling the electricity is often used to finance the construction, operation, and maintenance of the solar farm.

What does it mean to set up a solar farm?

Setting up a solar farm involves finding a suitable location with access to a part of the electricity system with enough capacity for the size of your proposed project. It will require a relationship with a retailer to purchase the electricity generated and the renewable energy certificates that the site generates.

Solar farms are known as 'front of meter' because they stand alone on the electricity system and are not located on the same site as an energy user. The electricity is usually worth only half as much as the power from an equivalent behind-the-meter project. These projects are therefore more difficult to develop, but can be valuable for households and businesses that can't develop solar on their own roofs. Economies of scale make very large solar projects cheaper, but at the community scale they are often more expensive than rooftop solar because they need to pay for a new connection to the grid and purpose built panel mounting.

Benefits of setting up a solar farm

• Increased access to clean energy for community members who may not have the ability to install solar panels on their own properties.

• Community solar farms can create local job opportunities during the construction, operation, and maintenance phases.

• Community members can actively participate in the renewable energy transition. Solar farms foster a sense of ownership, collaboration, and shared responsibility, and provide educational opportunities to learn about renewable technologies, and sustainability.

• If it is profitable, a large collective project in community control can provide a revenue stream for other community energy initiatives and keeping organisers employed to drive progress.

Some challenges of setting up a solar farm

• Acquiring initial capital: Securing funds for land acquisition, equipment, and installation is a significant hurdle, requiring careful financial planning and access to diverse funding sources. If raising funds through community shares, grants or loans, the legal entity, fundraising rules, recruitment and community engagement all need to be considered.
• Site selection and land availability: Finding suitable sites, especially in densely populated areas, can be complex due to limited land availability and potential conflicts with existing land use.
• Regulatory and policy barriers: Navigating complex regulations and policies at local, state, and federal levels, including permits, interconnection standards, and utility regulations, demands time and specialised expertise.
• Community engagement and buy-in: Building consensus and obtaining community support involves addressing concerns, managing expectations, and implementing effective communication strategies to minimise opposition and gain community buy-in.

When is setting up a solar farm a good choice?

You will need a strong reason to choose a solar farm over other options for expanding solar in your region. Some possible reasons are:

• Scale: People in your community want to see solar resources and land assets used ambitiously to produce value.
• A project champion or determined core team: can bring a project to life because their enthusiasm helps bring other partners and community on board.
• Grants and financial support: have underpinned many of the community solar farm proposals to date because, through the grant, governments have indicated that they think community solar farms are a valuable future investment that needs to be showcased.
• A developer partnership: A commercially oriented solar developer might bring existing relationships and be willing to share risk in managing the electricity market and financial market arrangements.

Project examples for community solar farms

Goulburn Community Energy Co-operative NSW: Goulburn solar farm is in a fundraising phase. They are planning for 1.8MW of solar and 1.2MW/2.3MWh of battery.

Repower Solar Farm NSW: Shoalhaven Solar Farm Pty Ltd is a community / private partnership comprising a 3MW solar farm (8,000 panels), part-funded by community investors with electricity offered to local businesses via power purchase agreements through Flow Power.

Solarshare ACT: The Majura solar farm is 1MW with community ownership.

Other guides and resources

Community solar farm process guide: One page checklist of all the steps involved in setting up a solar farm.

Preliminary feasibility study for 2MW solar farm: Commissioned by Bendigo Sustainability Group, this 2MW study provides a detailed analysis and concludes that a modest return for community investors is possible.

Community Power Hub resources for solar farms: The Enhar checklist and other studies from Victoria are provided as resources on this Community Power Hub solar farm resources page.

See also our explainer on solar options for communities.