How To Start a Solar Panel Business

April 9, 2024

Sunlight as a renewable energy source is gaining momentum. Green and accessible solar technology allows anyone to use solar cells to their advantage. No wonder, 2023 witnessed a boost in electricity generation capacity of around 7% of all electricity generated from sunlight.

Such a spike in popularity creates potential for solar businesses. However, potential solar business owners need answers to many questions. How do solar companies generate income? What products and services should they offer?

This blogpost is the right spot for those considering starting a solar company. SolarPowerSystems provides you with valuable insights on how to launch a solar panel company successfully and ensure its profitability over the long term. Our solar platform may give you answers to other solar issues in the blog section. If you’re considering going green and aren’t sure where to start, ask for a solar quote from our industry experts, who will generate a list of optimal installers in your area .

Popular Myths About Solar Panels Busted 5

Solar Company Types: Which Should You Choose?

Solar business opportunities are vast, encompassing various service enterprises necessary for initiating a solar project. As homeowners embark on solar panel installation, they interact with solar equipment manufacturers, solar system installers, and financing companies. Let’s dive into the distinct areas of expertise that each solar business type brings to the table.

Solar Panel Manufacturers

Solar equipment manufacturing can be a stand-alone business project. Such a solar company produces specifically solar equipment. However, larger household electronics giants like LG and Panasonic also offer solar-related products.

If you decide to start a solar business manufacturing solar panel equipment, you should remember that solar systems require more than arrays. Your business plan can also supply clients with solar inverters, wiring, racking, and solar system monitor devices.

Solar Installation Companies

Modern homeowners rely heavily on solar panel installers. They assemble, set up, and adequately maintain solar panel systems. Starting a solar business of this kind means you will purchase solar equipment from manufacturers and then provide installation services.

Additionally, solar installers often obtain necessary permits, apply for solar incentives available, and cover any logistical aspects of solar panel installation. Combining roofing contractors, solar installation, and other legal services can help you conquer new market niches by offering an all-in-one service package.

Solar Financing Providers

Finally, some solar company owners choose to launch a solar financial company. Such consulting services are becoming increasingly popular these days. Many households and commercial enterprises eager to adopt solar technology can’t afford the hefty upfront payment required.

Ten years ago, most homeowners had no choice but to pay upfront for solar panel systems, but that is no longer true. Many institutions, including banks and credit unions, offer financing solutions to their clients. One of the options for solar panel users is to benefit from solar loans, solar leases, and power purchase agreements.

Solar Financing Providers

Source: Valley Solar

How To Start a Solar Company

Portrait of a happy solar technician near rows of solar panels.

Let’s outline the sequential steps an investor should take to launch a solar company.

Step 1. Come Up With a Solar Business Plan

Any successful business requires comprehensive research of the field and an accurate business plan. Operating in any commercial area without a well-developed business plan is risky and challenging. Adequate research helps you better understand your solar business challenges and how to overcome them.

Begin by determining your biggest competitors in the solar market. Online open data currently provides information on the items sold, employees’ numbers, and key advantages of other solar business projects.

Next, you should understand your target audience by learning about their demographic. It can help your solar company meet customers’ needs, develop optimal product features, and establish appealing prices to satisfy customer requirements. You can obtain the needed information by conducting surveys and collecting feedback.

Your solar panel company strategy can cover multiple topics. They should ensure smooth business development and keep your solar business afloat. Remember, a good business plan and a decent amount of research can work miracles!

Step 2. Legalize Your Solar Company

Once your business strategy is ready, it’s time to obtain permits and work on other legal documentation required to start a solar company. Begin by researching what criteria your solar company should meet. Legal norms may vary depending on your location.

It is also a good idea to protect your business by providing insurance. It can compensate you if any possible property damage occurs. However, sticking with insurance options that fit your financial management plan is essential.

Step 3. Navigate Solar Business Finances

Launching a solar company requires prior financial investment. Let’s explore the primary options for launching a solar business, weighing their pros and cons.

Start a solar business from scratch You have the freedom to manage your solar company the way you want. However, be ready to deal with the high market competition and its associated risks.
Purchase a solar company franchiseYou buy an established solar company with a well-known name. It facilitates attracting potential customers.
Purchase an existing solar energy companyYou obtain a company with already established business processes and trained staff.

How do independent solar businesses differ from franchise options?

differ from franchise options

Source: Beacon

If setting up your solar panel company requires extra expenses, you can investigate the financing options available. You can:

  • Take a regular bank loan
  • Obtain a business loan
  • Apply for solar grants and subsidies
  • Find investors

Once you are ready to start a solar business, contact your bank to open a business-specific account. A separate business account allows you to discriminate between personal and business assets, keep track of your income and spending, and process tax operations.

Step 4. Train Your Employees

Effective solar company operation requires a team of qualified professionals. Your solar energy company specialists should include the following:

  • Technical personnel
  • Sales managers
  • Office workers
  • Financial experts

We recommend cooperating with solar-certified experts. It ensures the top quality of your services and a good reputation on the market. Here are some of the solar certifications you might be interested in:

  1. PV Installation Professional Board Certification
  2. PV Installer Specialist Board Certification
  3. PV Technical Sales Board Certification

Remember, providing ongoing training and educational programs for your team to keep their skills up-to-date is vital.

Step 5. Set Up Solar Business Software

The best way to optimize tasks and processes for a solar business is to use appropriate software. Most solar panel businesses rely on CRM tools and other project management applications. Well-chosen software simplifies daily operations for your employees, improves their productivity, and helps you track your customer journey.

There are various types of solar software available. Though their features vary, most offer 3D modeling, solar irradiance data analysis, and shading projection. Additionally, they offer a client database, material list, and other tools to organize your solar business workflow.

Step 6. Launch Your Solar Company Marketing Strategy

Now that everything is set, you face the question of how to sell solar panels and services effectively. You should harness the power of marketing tools to attract more customers and improve ROI.

Marketing ToolExplanation
LogoDevelop your solar company logo thoroughly. The symbol should be concise yet memorable.
Web-pageDevelop a user-friendly website to inform customers about the available products and services.
Social-media profileRun social media accounts on Facebook, Linkedin, Twitter, and other platforms to make it easier for clients to reach you.

Establishing a robust online presence is one of the best ways to boost your solar company sales. Start with developing your solar company website and setting up social media profiles.

Another powerful marketing tool is customer feedback. React promptly to positive and negative reviews to improve your solar business reliability in the eyes of potential customers.

Finally, use partnerships to generate leads, improve your solar company network, and contribute to ongoing solar business success.

Mastering Solar Business Launch

The solar energy trend is rising, making it a lucrative field for business owners nationwide. If you decide to start your solar business, develop a well-thought-out plan for your company strategy. Remember to invest in your staff development and marketing strategies to ensure your business’s growth and development.

Frequently Asked Questions

Is a solar panel business profitable?

On average, a solar business reaches a margin of 20-25%. How big your solar company’s profit is depends on the market demand, competition levels, the tax credits you obtain, and the payment options you offer.

How much money do you need to start a solar business?

The initial investment amount varies from $50,000 for a small solar power company. Starting a solar business on a large scale can cost you as much as $500,000. The expenses include buying equipment, conducting team training, and launching a marketing strategy.

Why do some solar business projects fail?

There are many reasons why a solar company goes out of business. The most common factors leading to solar business shutdowns are intense market competition, high warranty claim rates, and poor customer service.

What are the best software options for solar businesses?

Solar Plus, SolarEdge, and Pyl will be the most popular solar software in 2024. All of them implement advanced algorithm calculations to develop optimal solar panel projects.

Jed Hilton
Jed Hilton

Jed Hilton, our Founder and CEO, has over a decade of experience in the solar industry. His innovative leadership and expertise in solar technologies guide our company's vision and strategy.