Solar Farm Income Per Acre Calculator

Enter your acreage, state, and financial inputs — get annual revenue per acre, 25-year NPV, project IRR, LCOE, and ITC + MACRS tax benefits.

Farm details

Land area?

acres

State?

Lease or own-and-operate??

Financial inputs

Cost per watt (installed)?

$/W

PPA or wholesale rate?

$/kWh

ITC percentage?

Elect MACRS depreciation??

Annual O&M cost?

$/kW/yr

Solar farm financial summary

2.86 MW system — $20,240/acre/yr net revenue

System capacity2.857 MW (2,857 kW)

Annual production5,631 MWh/yr

Total capex$2,714,286

Annual gross revenue$450,514/yr

Annual O&M cost$45,714/yr

Annual net revenue$404,800/yr

ITC tax credit (Year 1)$1,085,714

MACRS tax benefit (Year 1)$91,200

Combined ITC + MACRS benefit$1,176,914

25-year NPV (5% discount)+3,905,186

Project IRR25.8%

LCOE$0.0444/kWh

Payback period3.8 yrs

Lease alternative (25 yr @ $750/ac)$15,000/yr vs own-operate

Link copied to clipboard

Extended AnalysisLease income, IRR/NPV & lease vs own comparison

Land acreage?

acres

State?

Lease rate?

$/acre/yr

Federal ITC?

At $800/acre/year, your 20 acres generates $16,000/year in passive lease income. Over 25 years with a 2% annual escalator: $523k total.

Lease income at different acreages at your rate of $800/acre/year.

Annual lease income

$16,000

25-yr total (2% escalator)

$523k

System capacity

2.9 MW DC

How to Use This Calculator

Enter your acreage and choose lease vs. own-and-operate

Start with your total developable acreage. This calculator uses 7 acres per MW — the industry standard for ground-mount utility solar including setbacks and access roads. Then decide: do you want to lease land to a solar developer for predictable passive income ($300-2,000/acre/year), or own and operate the system yourself for higher potential returns but higher capital risk?

Set your financial inputs

For own-and-operate: enter the EPC cost per watt (equipment + installation), your expected PPA or wholesale rate, ITC percentage (30% base plus applicable adders in 2026), whether to elect MACRS depreciation, and annual O&M cost. For a lease, the calculator compares your land value to the own-operate alternative so you can see what you're leaving on the table — or giving up in risk.

Read the outputs

The calculator shows system capacity, annual production, capex, annual net revenue per acre, 25-year NPV, project IRR, and LCOE. The combined ITC + MACRS Year 1 tax benefit shows how much of the capex you recover immediately through tax incentives — often 35-50% of total project cost.

The Formula

System MW = Acres ÷ 7 (acres/MW industry standard) Annual MWh = System MW × Capacity Factor × 8,760 hrs Capacity Factor = Peak Sun Hours ÷ 24 Annual Gross Revenue = Annual MWh × PPA Rate Annual Net Revenue = Gross Revenue − (System kW × O&M $/kW/yr) ITC Value = Total Capex × ITC% MACRS Benefit = (Capex × (1 − ITC%/2)) × 20% bonus × 21% tax rate NPV-25 = Σ(Annual Net × (1 − 0.5%)^yr ÷ 1.05^yr) − (Capex − ITC − MACRS) LCOE = Total Discounted Cost ÷ Total Discounted Energy (25 yrs, 5%)

The 7 acres/MW ratio is an industry standard; dense urban sites may achieve 6 acres/MW and large flat sites with good solar can reach 5 acres/MW. The 0.5%/yr degradation is conservative for modern mono-PERC and TOPCon panels (actual is 0.4-0.6%/yr). The MACRS calculation uses 2026 law: 20% bonus depreciation on the ITC-adjusted basis at a 21% corporate tax rate — actual tax benefits depend on your entity structure and tax position.

Example

The Hendersons — 20-acre farm in Texas

The Henderson family has 20 acres of marginal farmland in Texas they're considering for solar development. They're evaluating leasing vs. developing it themselves at $0.95/W with a $0.08/kWh PPA, claiming the full 40% ITC (energy community adder) and MACRS.

Land20 acres, Texas (5.4 PSH)

System20 ÷ 7 = 2.857 MW

Cost$0.95/W = $2,714,286 capex

PPA rate$0.080/kWh

ITC40% (energy community adder)

Result

Annual production~3,950 MWh/yr

Annual gross revenue~$316,000/yr

Annual net revenue~$270,000/yr ($13,500/acre)

ITC Year 1$1,085,714

MACRS benefit~$48,300

25-year NPV~+$1.8M

Project IRR~18%

Payback~6 years

Lease alternative$15,000/yr ($750/acre) — 18x less

For landowners willing to take on development risk, own-and-operate delivers dramatically higher returns than leasing. The 40% ITC covers nearly $1.1M of the $2.7M capex immediately as a tax credit, making the effective upfront cost under $1.6M. However, development requires navigating permitting, grid interconnection (often 2-4 years), financing, and long-term operations — complexities that make leasing attractive for landowners who prefer simplicity.

FAQ

How much does a solar farm earn per acre? ▼

For leased land, solar developers typically pay $300-2,000/acre/year depending on location, grid proximity, and competition. Sun Belt states with high land prices see lower rates; rural Midwest and Southeast land can command $500-800/acre. For own-and-operate projects, a well-sited 20-acre farm in Texas at 2026 economics can earn $10,000-15,000/acre/year net after O&M — but requires $2-3M of capital and 2-5 years to develop.

What is the 2026 solar ITC and what adders are available? ▼

The Investment Tax Credit (ITC) under the Inflation Reduction Act provides a 30% base credit for commercial solar. Additional adders available in 2026: (1) Energy Community adder +10% — for projects in coal communities, brownfields, or areas with fossil fuel employment; (2) Domestic Content adder +10% — if 40%+ of components (steel, manufactured products) are US-made; (3) Low-Income Communities adder +10-20% — for projects in low-income census tracts. Maximum ITC with all adders is 50%. Verify eligibility with a qualified solar tax advisor.

What is MACRS depreciation for solar farms? ▼

Solar equipment qualifies for 5-year MACRS accelerated depreciation. Combined with bonus depreciation (20% in 2026 under current law), this allows you to deduct a large portion of the project cost in Year 1. The depreciable basis is reduced by 50% of the ITC claimed (per IRS rules). For a $1M project with 30% ITC: basis = $1M × (1 - 15%) = $850,000; Year 1 bonus = $850,000 × 20% = $170,000 deduction, saving $35,700 in taxes at 21% rate. MACRS requires a C-corp, S-corp, or partnership with taxable income — consult a tax attorney.

Should I lease my land or develop my own solar farm? ▼

Lease if: you want passive income with no capital risk, you lack development experience, or grid interconnection in your area is competitive. Lease income of $500-1,500/acre/year is predictable and requires zero management. Own-and-operate if: you have access to capital (or tax equity partners), you're willing to spend 2-5 years on permitting and interconnection, and you want maximum long-term returns. Own-and-operate typically earns 5-20x more per acre than leasing but carries significantly more risk and complexity.

What is a realistic IRR for a utility-scale solar project? ▼

Typical unlevered IRR for utility-scale solar in 2026 is 6-10% for merchant/wholesale projects and 8-14% for contracted PPA projects. With ITC adders and MACRS, levered IRR (using project finance debt) can reach 15-25%. Community solar projects often target 10-15% levered IRR. Projects in areas with high grid congestion or poor interconnection will have lower IRRs. The IRA tax incentives significantly improved economics vs pre-2022 — a 40% ITC project vs a 26% ITC project has roughly 1-3% higher IRR.

Related Calculators

Embed This Calculator

Free to embed on your website. Just copy this code:

<iframe src="https://solarsizecalculator.com/solar-farm-calculator"
  width="100%" height="700" frameborder="0"
  title="Solar Farm Income Per Acre Calculator"></iframe>