Originally posted by SubsidedLemon:

It'll work as long as you keep everything lit. That is why I suggested the moat/pallisade, if you have the time/resources you can even make a nice Mining Company!

From the Valhiem Wiki (and my personal experience)

"Structures that can be lit such as campfires and torches still provide the player base effect when they aren't lit."

https://valheim.fandom.com/wiki/Player_base