Research | Policy Briefs

The Business Case for Utility-Scale Solar

Communities across the country are reaping economic benefits from utility-scale solar projects. Declining costs, growing corporate demand, and stable, predictable energy pricing are all reasons for the increase in clean energy projects each year. These projects generate substantial revenues to host communities, farmers, and schools, and can provide transformative capital to areas that typically do not attract such investments, boosting general funds and school budgets.


What is utility-scale solar?

Utility-scale solar projects (sometimes referred to as “large-scale solar”) deliver power directly to the electric grid with generating capacities typically  exceeding 5 megawatts (MW), though size thresholds can vary by market. These projects are considered "in front of the meter" due to their direct feed into the grid.

Utility-scale solar projects provide the most affordable and cost-effective power generation, and thus have repeatedly received endorsements from utility customers. 

What are the economic and business impacts of utility-scale solar?

Utility-scale solar projects, because of their scale, provide significant economic benefits to the regions they serve beyond power supply. These benefits generally fall into one of four categories:

  • Investment and Revenues

  • Workforce Development and Demand for Local Services

  • Local Income Generation

  • Energy Independence


Investment and Revenues

Utility-scale solar projects can attract major investment to a region. The significant capital infusion utility-scale energy projects deliver are often among the largest investments a county will attract. As companies of all sizes increasingly prioritize clean energy availability and grid reliability in their site selection criteria, hosting such projects can attract large, innovative businesses and create opportunities for local economic growth. Businesses across the spectrum stand to gain from the long-term energy cost savings and predictability offered by these projects, ultimately enhancing their overall competitiveness.

While each state has different taxing regimes and allocations, the property taxes on solar projects create tax revenues for the local government, state government, and school districts. The revenue generated can be used to bolster various facets of local infrastructure, emergency services, educational resources, road improvements, and the establishment of entrepreneurial or recreational centers, for instance. Importantly, this revenue comes without placing additional strain on critical infrastructure.

Quick facts:

  • Typically, capital investments for large solar projects are in the hundreds of millions of dollars.

  • Renewable energy projects are often among the highest taxpaying entities in a community and sometimes the leading source of tax revenue.

  • In a CICE survey of ten projects across six counties in Ohio, PILOT (“payment in lieu of taxes”) payments from renewable energy projects equaled or exceeded local property tax revenues in FY 2022.


Workforce Development and Demand for Local Services

Utility-scale solar projects generate a significant number of well-paying jobs during the construction phase. While construction jobs may be short-term, they inject a temporary influx of workers into the area. These workers often stay in nearby hotels, dine at local restaurants, and utilize services such as gas and car service stations, generating increased demand and thus economic opportunity for local businesses. There are also significant well-paying opportunities for specialized trades – from earthwork to fencing – available to local contractors as well as long-term, on-site operations and maintenance positions directly associated with a project itself that necessitate a local workforce.  

The growth of the industry also incentivizes off-site skills development and training programs. Economic development organizations, businesses, and educational institutions such as community colleges across the country are rapidly building out programs to equip workers to participate in the growing industry. These workforce development efforts can result in significant impacts on economic growth opportunities in related sectors. 

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Local Income Generation

Utility-scale solar projects heavily depend on private landowners for their siting. Participating landowners often receive lease payments throughout the project’s operational lifetime, injecting significant supplemental income into the community and, ultimately, increasing demand for local services. These payments not only support the local economy but also enable the landowners to maintain ownership of their land–and, in the case of farmers, invest in modernization and innovation, which in turn can contribute to overall economic growth in a region.

The income opportunities also extend beyond the participating landowners. For instance, project developers frequently extend additional economic opportunities to adjacent landowners and host communities through Good Neighbor Agreements or Community Benefits Agreements.

Quick facts:

  • Community Benefits Agreements (CBAs) are legally binding contracts between the developer and host community and/or community groups.

    • The benefits are often a combination of monetary and non-monetary benefits, crafted specifically around community needs.

  • “Agrivoltaics” refers to land used for both agriculture and solar energy generation, providing the potential for even more income diversity for landowners.

Energy Independence

Utility-scale solar reduces dependence on imported energy resources and thus promotes American energy independence, ultimately enhancing energy security and stability for businesses and residents alike. Solar is a domestic, reliable, and predictable resource, unlike traditional energy sources such as fossil fuels, the prices of which are susceptible to global market fluctuations and geopolitical uncertainties. 

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