Starting a Solar Farm Business in Florida
There is plenty of sunshine in Florida. Excitingly, Florida’s sunny sky gives you access to a business opportunity that can help the environment and boost your portfolio.
Florida landowners have a unique opportunity to sell energy they generate on solar farms. To take advantage of this opportunity, you must understand how to start a solar farm business in Florida.
Florida’s Energy Needs
Florida’s power use is higher than the national average. Though there are alternatives to generating electricity, Florida’s electricity production is majorly dependent on one source: natural gas.
According to a November 19, 2020 report from the U.S. Energy Information Administration, natural gas fueled about 74% of Florida’s electricity net generation in 2019. Florida solar farms present great opportunities to diversify Florida’s energy sources and reduce its carbon footprint. Currently, only 3.5% of Florida’s electricity comes from renewable resources.
Solar power is Florida’s largest source of electricity from renewable resources, but solar power could have a greater presence in Florida’s energy grid. Using your land as one of the solar farms in Florida could be a boon for you and your community.
How Do I Start a Solar Farm?
Starting a solar farm can be complicated on the front end, but once you understand what you need and you have the proper permits, the task of running a solar farm isn’t as daunting.
Start with a Business Plan
When starting solar farms, business plan formulation should be the first action item for an entrepreneur. Starting any business requires many steps, and a business plan can help you organize your needs and objectives and help you determine how to achieve each step of business formulation and maintenance. A business plan can also help you secure funding from financial institutions and investors.
Once you understand your business needs, you can determine what kind of solar farm business you want to start. You can also determine how much help you will need from others.
What kind of capital do you need to start your solar farm business?
The largest component of your solar farm business is the land. If your land is in a high-sun-intensity area, you generally need a minimum of two-and-a-half acres to produce one megawatt of electricity. One megawatt of electricity can power 650 homes per day. As sun intensity decreases, the amount of acres you need to generate sufficient power increases.
You may need as many as six acres of land to generate one megawatt of electricity. On six acres of land, you may need as many as 4,000 solar panels, which could cost you $3 million dollars to build. If the price of building your own solar farm is too steep, you can lease your land to a solar farm developer. Y
ou could make hundreds to thousands of dollars in rent per acre. Once you determine what kind of capital you need to start your solar farm business, you need to determine the structure of your business.
What kind of business entity should you form for your business?
In Florida, you have many options for the kind of business entity you can form. There are five types of business entities you can form:
- A corporation,
- A limited liability company (LLC),
- A general partnership,
- A limited partnership, or
- A sole proprietorship.
Each entity has its advantages and disadvantages. For example, if you choose to spend a large amount of money to build your own solar farm, you may want to choose an entity that limits your liability for debts and business mistakes. LLCs and corporations limit your liability for business debts and obligations.
If you do not want to deal with the paperwork and formalities required to start and run a limited liability entity and you want to assume the risk of personal liability, you may want to start a sole proprietorship.
You should review your business entity options with an attorney during the developing stages of your business. An attorney can help you make the best choice for your unique business needs.
Your Business Needs Approval from Multiple Government Entities
Once you determine your business structure and what your business needs are, you need to follow regulations and file for approval with multiple municipal, state, and federal agencies.
Solar energy businesses must follow regulations and obtain permits related to zoning and building, environmental protection, public safety, and state and federal taxes. You may have to reach out to as many as 12 different government agencies to comply with municipal, state, and federal laws for renewable energy businesses.
Your Business Should Have the Backing of Financial and Legal Services
As you can see, there are many intricate steps involved in starting solar farms in Florida. If you want to see a great return on your investment of time and money, you should seek the services of financial professionals and legal experts early.
While the sun is abundant in Florida, the weather is still unpredictable and equipment can break in unexpected ways. Having insurance to cover your business can protect you from a lot of misery on a rainy day (literally). Also, taking advantage of good interest rates for your business’s bank account can help you reap high yields for your business. Ask your bank for a more in-depth review of the different options it has for business accounts.
You want as many professional buffers as possible to help your business succeed. An accountant can ensure your business complies with the necessary tax laws. An accountant can also help you find deductions and credits to boost your business’s profitability.
An attorney can ensure that you follow the correct laws and regulations, and they can help you establish your business in the smartest and safest ways. If you choose to lease your land to a solar developer, an attorney can help you draft lease documents that properly protect your interests.
Contact an Attorney for Help
Starting a solar farm in Florida is a great business opportunity. Do not let the many laws and regulations for renewable energy scare you from starting a lucrative and helpful venture.
Attorney Kara Groves is a Florida-based attorney who wants to see you succeed when you take a new business risk. Kara is focused on helping others build agribusiness in Florida, and she is here to fulfill all your business needs.
If you are looking for someone experienced, knowledgeable, business savvy, and approachable, call Kara today for a consultation.
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