How to Start a Solar Panel Business: A 12-Step Guide

The global solar power market is set to reach $607.8 billion by 2030, growing at a CAGR of 15.7% between 2022-2030. 

The reason is the rising demand for sustainable energy solutions. If you are also an entrepreneur looking to make it big in the industry, now is the time. 

But if you don’t have a background in roofing, electrical work, or sales, starting can feel like you’re climbing a mountain with no map.

One Reddit user replied to the question, “How hard would it be to start a small-time solar installation company?” in the best way. They said, “No experience, just ambition and a plan to start with family homes.”

Reddit user

The responses he got? A mix of blunt honesty, real advice, and a few reality checks.

Here’s the truth: The solar technology market is promising, but it’s also a skilled trade. It requires technical knowledge, permits, insurance, safety training, and hands-on problem-solving.

This guide won’t sugarcoat things or scare you off. It’s here to show you what it really takes to start a solar panel business. 

If you’re ready to learn, plan, and commit, it’s absolutely doable.

Let’s start.

Step 1: Choose Your Niche

Solar is a wide field, and trying to do everything at once will only slow you down. Decide on what kind of solar business you want to build.

As one Reddit commenter put it, “If you understand the basic elements of running a business, you will automatically be in the top 50% of solar installers.”

But first, you need to decide what type of solar business you want to run.

Types of solar business

• Residential installation: This involves installing solar panels on homes, typically ranging from 4 kW to 12 kW. The solar sales cycle is shorter, but you’ll need more solar projects to make a profit.
• Commercial installation: Larger solar projects with bigger paydays, but longer solar sales cycles and more complex permitting. You’ll need more capital for equipment and larger crews. 
• Solar sales: If climbing roofs isn’t your thing, consider becoming a solar dealer. You’ll sell solar systems but outsource installation.
• System maintenance: As the installed base of solar panels grows, so does the need for cleaning, monitoring, and repair services. This niche requires less capital to start but demands technical knowledge.
• Solar + Storage: Adding battery storage systems to solar installations is a growing specialty. As one Redditor mentioned: “Battery management systems and all that are designed by electrical engineers. They are installed by licensed contractors.”
• Solar farm installation: Want to power entire communities? Start a solar farm with enough land and capital for multiple panels.
• Solar product marketing: Sell the idea, not the panels. Help businesses switch to solar by marketing benefits from your phone or laptop.
• Solar blogging: Turn your solar knowledge into income by writing helpful, SEO-driven blogs for an eco-conscious audience.
• Solar energy training (online/offline)
  Teach others about solar energy through online classes or workshops, and upsell related products alongside.
• Specialty services: Some companies focus on specific areas like ground-mounted systems, solar carports, or agricultural applications.

Choosing a niche is all about setting a clear starting point. It helps you market better, price your services properly, and figure out what tools and skills you need from day one.

Take a moment. Ask yourself: What do I want to do, and who do I want to help?

Step 2: Create a Business Plan

Once you’ve picked a direction, it’s time to sketch out your game plan (business plan). You don’t need a 40-page PDF with charts and forecasts. Just get the basics down.

Here’s what to detail:

• What are you offering? Define your specific solar products and services (e.g., residential installation, maintenance, battery storage).
• Who are your ideal customers? (Market Analysis): Identify target market demographics and regions (e.g., homeowners in states with strong solar incentives, like California). Research the U.S. solar system market projected to reach $66.3 billion by 2030 at a CAGR of 15.4%, competition, and trends.
• What will you charge? Develop a competitive pricing strategy, factoring in federal tax credits (ITC) and state incentives.
• How much money do I need? (Financial Projections): Outline startup costs (licenses, equipment), operating expenses (salaries, rent), and revenue/profit projections (typically 15-25% margin). 
• How will I secure funding? Make a list of funding options like SBA loans in the US, grants or VAT relief in the UK, and federal or provincial incentives in Canada. 
• How will people hear about you? Define your marketing and sales strategy (e.g., online lead generation, local shows, partnerships).

This solid plan keeps you grounded, provides a clear roadmap, and offers immense credibility to lenders and investors.

So, keep it lean but comprehensive. Write it down, review it, and let it guide your own solar business.

Want a head start? Look for free business plan templates and guides from resources like the Small Business Administration (SBA).

Step 3: Register Your Solar Business

Now that you know what you want to do, it’s time to make it official.

Choose a business structure

Your choice affects your taxes, liability, and paperwork load:

• Sole Proprietorship: If you’re just testing the waters and want something simple, a sole proprietorship is the easiest way to go. But keep in mind that there’s no legal separation between you and your business. If someone sues the business, they’re suing you.
• Limited Liability Company (LLC): The sweet spot for most solar startups. An LLC separates your personal assets from business liabilities. This provides critical protection in an industry where installation errors could cause property damage or even fires.
• Corporation: More complex and costly to set up, but it offers the strongest legal protection and makes it easier to bring on investors or expand your business across multiple states. S-Corporations can provide tax credits once your business grows.

Once you’ve decided on the business structure, it’s time to do the other registration formalities.

Additional registration requirements

1. Pick a business name: Choose something memorable that reflects your services. Check that the name isn’t already registered in your state.
2. Register with state authorities: File the necessary paperwork with your Secretary of State or equivalent agency.
3. Get an EIN (Employer Identification Number): This federal tax ID number is free from the IRS website and lets you hire employees, open business bank accounts, and file taxes properly.
4. Open a business bank account: Keep your personal and business finances separate from day one.
5. Get insured: At a minimum, you’ll need general liability insurance. Consider adding professional liability, workers’ compensation (if you have employees), and commercial auto insurance.

It’s not the most exciting step, but it sets the foundation. Don’t cut corners on the legal setup. Proper registration builds customer trust and protects everything you work for.

Step 4: Understand Local Laws and Solar Regulations

Here’s the part a lot of new solar entrepreneurs underestimate: the rules.

Solar installation isn’t something you can just start doing. Every state (and often every city) has its own codes, permitting process, and license requirements. If you don’t follow them, you risk fines, delays, or having to redo work.

Licensing requirements

• You’ll likely need a building permit and an electrical permit for each job. 
• Some states also require a contractor’s license. In some cases, your solar business might need to hire or partner with someone who holds one.
• The North American Board of Certified Energy Practitioners (NABCEP) certification isn’t legally required everywhere, but it’s the gold standard in the solar industry. Customers and utility companies take you more seriously with this credential.

The bottom line is: Do your homework on local regulations before taking on your first job. It protects your solar business, keeps solar projects on track, and shows your customers you know what you’re doing.

Step 5: Get Trained, Certified, and Accredited

Even if you’re not planning to climb roofs or wire panels yourself, getting trained is still a smart move.

Why? Because when you understand the technical side, you can lead solar projects with confidence, avoid costly mistakes, and speak the same language as your crew.

Essential training paths

• NABCEP certification: As previously said, this is the solar industry gold standard. There are several certification levels:
  • Solar PV Associate (entry-level knowledge)
  • Solar PV Installation Professional (for system installers)
  • PV Technical Sales Professional (for sales teams)
  • PV Design Specialist (for system designers)

Getting NABCEP certified requires training hours, documented installation experience, and passing an exam. Many solar customers specifically look for NABCEP-certified companies.

• Solar Energy International (SEI): Offers excellent online and hands-on training. Their beginner-friendly courses cover everything from basic solar principles to advanced system design.
• Community college programs: Many equipment manufacturers offer free or low-cost training on their specific products. These can be great supplements to a more comprehensive education.
• Manufacturer training: Many equipment manufacturers offer free or low-cost training on their specific products. These can be great supplements to more comprehensive education.
• OSHA safety training: Given the dual hazards of working at heights and with electricity, safety training isn’t optional. OSHA 10-hour construction safety training should be your minimum standard.
• Apprenticeship: Working for an established solar company before starting your own gives you invaluable real-world experience.
• Electrical contractor license: Some states in the USA mandate it, especially if you work with high-voltage systems. It helps ensure safe and code-compliant solar installations.
• Microgeneration Certification Scheme accreditation (if you are operating from the UK):  MCS (Microgeneration Certification Scheme) signifies that you provide industry-standard services that balance quality, safety, and performance. It assures customers, stakeholders, and regulatory bodies of your commitment to compliance. Though not mandatory, this accreditation helps build credibility, especially when starting a new business.

Basically, you don’t need a degree to start a solar business. But having the right training gives you a major edge. It helps you earn trust, protect your entire team, and get the job done right.

Deciding on compensation structures

The ideal way to pay in-house employees is a base package plus performance-based incentives like commission or bonuses. While the base salary provides the financial stability, incentives encourage more commitment and quality work. 

In case you contract with sales persons, you can pay a commission-based pay. In this model, you can mutually decide on a fixed percentage of the total contract or base price, and pay it as commission. 

On average, the commission per sale falls between 3%–10%, and can go up to as high as 15% for high-value contracts. While this system motivates sales teams to close more deals, it can also lead to misalignment between what’s committed and what you can offer.

Some companies also pay a flat fee ($500-$2000) per deal or tiered systems where you can increase rates on hitting sales targets. 

Step 6: Source Equipment and Suppliers

Building strong supplier relationships is crucial to the success of your solar business. The equipment you install directly impacts your customers’ long-term satisfaction and your warranty obligations.

Key equipment categories

• Solar panels: The most visible component of any system. Key considerations include:
  • Energy efficiency ratings (how much clean energy they produce per square foot)
  • Durability and weather resistance
  • Warranty terms (most quality panels offer 25-year performance warranties)
  • Aesthetic options (all-black panels cost more but look better)
  • Manufacturing location (some customers prefer American-made)
• Inverters: These convert DC power from panels to usable AC power. Options include:
  • String inverters (most affordable, but one panel issue affects the whole string)
  • Microinverters (more expensive but better performance in partial shade)
  • Solar power optimizers (middle-ground option paired with string inverters)
• Racking and mounting: These secure panels to the roof or ground:
  • Roof penetrating vs. ballasted systems
  • Rail vs. rail-less options
  • Ground-mount solar systems for properties with unsuitable roofs
• Batteries: If you offer energy storage systems:
  • Lithium-ion vs. other chemistries
  • AC vs. DC coupled systems
  • Indoor vs. outdoor rated options
• Balance of system: These less glamorous components include:
  • Electrical conduit
  • Wiring and connectors
  • Disconnects and combiner boxes
  • Monitoring systems

Finding reliable suppliers

• Wholesale distributors: Companies like CED Greentech, BayWa r.e., and Soligent specialize in solar equipment and offer technical support along with products.
• Direct from manufacturers: Once you have volume, you may be able to buy directly from manufacturers at better prices.
• Local electrical suppliers: For basic electrical components, local suppliers often offer better service and quicker availability.

What to look for in suppliers

Look beyond just the lowest price:

• Inventory availability: Nothing kills project timelines faster than backorders. Reliable stock matters.
• Product mix: Can they supply everything you need, or will you need multiple vendors?
• Credit terms: The best suppliers will offer 30-60 day payment terms once you establish a relationship.
• Technical support: When you encounter installation challenges, supplier tech support can save the day.
• Training resources: Many suppliers offer free training on new products.
• Warranty support: How easy is it to process warranty claims?

Start by contacting several suppliers, requesting catalogs and pricing, and asking about their contractor programs.

Building these relationships takes time. As your purchase volume grows, your leverage for better pricing and terms will improve.

Step 7: Hire and Train a Skilled Team

At first, you might wear all the hats: installer, sales, admin, you name it. That’s how a lot of solar businesses start. But as demand grows, you’ll need extra hands. 

Starting your crew

For your solar crew, you can’t hire just anyone; you’ll need the right people:

• Licensed Master Electrician: Either you need to be one or hire one. This person handles final connections and signs off on electrical work. One Reddit commenter suggested: “Contract out the electrical side until [you have] enough experience to go for [your] journeyman and then master.”
• Lead Installer: Coordinates the physical installation, including roof work, racking, and panel placement.
• Installation Helpers: Support the lead installer. These positions can be entry-level with proper training.
• System Designer: Creates custom solar designs based on site surveys and customer needs. Initially, this might be you.
• Sales Consultant: Develops leads and closes deals. In small operations, this is often the owner.
• Office Administrator: Manages paperwork, customer communications, and billing. This is typically the last role added.

And here’s something most new solar business owners overlook: create simple SOPs (standard operating procedures) early on. 

Developing clear processes

Document your installation process step by step. Create checklists for each phase:

• Pre-installation site assessment
• Material preparation
• Roof preparation
• Racking installation
• Panel mounting
• Electrical wiring
• Inverter installation
• System testing

These standard operating procedures ensure quality even as you grow. They also make training new team members much easier.

Step 8: Invest in the Right Equipment and Software

The right tools save time, reduce errors, and make your solar business more professional. Here’s what you’ll need:

Physical Tools

Installation tools:

• Quality drill/drivers (with spare batteries)
• Torque wrenches (critical for proper racking installation)
• Wire strippers and crimpers
• Multimeters and clamp meters
• Solar panel lifting equipment
• Fall protection gear
• Ladders and scaffolding

Measurement tools:

• Solar pathfinder or sun eye (measures shading)
• Infrared camera (identifies hot spots in existing electrical systems)
• Roof measuring tools
• Angle finder (for roof pitch)
• Current clamps (measure actual electricity usage)

Don’t skimp here; quality tools pay for themselves through faster installations and fewer callbacks.

Software solutions

The digital side of your solar business is just as important as the physical:

• Design Software: Programs like Aurora Solar, PVsyst, or HelioScope let you create professional system designs, predict renewable energy production, and visualize installations for customers.
• Proposal Software: Tools like Energy Toolbase or SolarReviews help create polished proposals with financing options.
• Project Management: Keep installations on track with software like FieldCamp, which handles scheduling, team coordination, and client updates automatically using AI. This prevents the common problem of “getting too busy to stay organized.”
• Route Planning: Tools like Upper help optimize travel between job sites. It’s particularly critical when you’re doing multiple installations or service calls daily. Such software helps in saving time and fuel costs.
• CRM Systems: Customer relationship management software like HubSpot or specialized solar CRMs track leads, follow-ups, and customer interactions.
• Accounting Software: QuickBooks, Xero, or Wave handles invoicing, expense tracking, and financial reporting.
• Mobile Apps: Look for software with good mobile options so your team can access and update information from job sites.

A Reddit user who runs a successful solar business added: “Troubleshoot problems (much harder than install), get tools and equipment, vehicles. Deal with customers who don’t pay appropriately and learn the legal side of the business.”

Good software helps with all these challenges, giving you a professional edge and making your life easier.

Step 9: Set Up Your Pricing and Payment Structure

Pricing your services can be tricky. The reason – you don’t want to scare potential customers off, but you also can’t afford to run on razor-thin margins.

Most companies use two piercing structures:  

Per-watt system calculates the total installation costs based on the total system wattage. 

Total system cost = System’s capacity in watts X price per watt

Both residential and commercial installation businesses use this model to calculate the costs of each solar panel project. The price per watt varies based on factors such as:

• System size
• Location
• Components used

The other method is “per system” pricing. In this structure, you charge a flat fee for the entire solar panel installation, regardless of the prices of individual parts and total wattage capacity. 

You can determine the total cost of a system based on factors such as:

• System size
• Equipment 
• Installation complexity

While this method simplifies pricing for customers, it becomes harder to determine the right prices, especially for complex projects. The result is underpricing in some cases. 

Here’s what a Reddit user suggests setting a price that gives a decent profit. 

Understand your competition and get some feeling for their cost structure. If YOU are a company that has a couple of owners that bring little value but collect a paycheck, you could be artificially high in the market. If your competitors have some dead weight, you should be able to charge a little more and/or undercut them.

So, always start by doing the math. What’s your cost per job? Think of materials, labor, permits, travel, and the time it takes to get the job done right. Then add a healthy margin that’s enough to cover overhead and still leave room for growth.

Now make it easy for potential customers to say yes. Not everyone has the cash upfront, so offer flexible payment options:

• Cash (some customers prefer it simple)
• Financing plans (partner with a lender if needed)
• Leasing (they pay monthly, you keep ownership)
• PPAs (Power Purchase Agreements) (customers pay only for the energy they use, not the system)

Clear, flexible pricing builds trust and gets you more “yes” responses.

Step 10: Operations & Installation Process

Once you secure your project, it’s time to execute the installation process. It includes the below steps:

• Site survey & design: Assess the site and finalize design using specialized software.
• Procurement: Order components of good quality that meet industry standards.
• Permits and interconnection: Ensure following local building permits and utility interconnection agreements to avoid any violations. 
• Installation, testing, and commissioning: After mounting structures and panels, test them rigorously to ensure there’s no glitch. Once everything’s fine, activate the system.

Step 11: Post-Installation Service

Your work doesn’t end right after the installation is over. It’s important to mention everything they need to know so they stay informed on every aspect.

Explain to them the workmanship warranties of different parts in the installed system. You can also offer annual subscription packages (cleaning, checks, and system monitoring) to build a consistent revenue stream. 

Ensure sending a post-installation survey to gather your client’s feedback, so your customer knows their opinion matters to you. 

Encourage them to provide word-of-mouth referrals and a few incentives in return, if possible.

Step 12: Consider scaling your service

Once you set up a business and make it stable, you can start scaling your business. 

For instance, you can consider:

• Diversification: Offer energy storage solutions (batteries), EV charging integration, or larger Commercial & Industrial (C&I) projects.
• Offer new technologies: Consider integrating smart home energy management or grid services. 

Entering new markets:

• Geographic expansion: Go beyond your start to serve high-potential states or regions within the U.S. (for example, states with strong net metering or robust community solar programs).
• New segments: Consider offering multi-family housing installation, non-profit organizations, and agricultural sectors.
• Real estate: Collaborate with builders to explore opportunities for large-scale installation services in new buildings.
• Franchise/dealership: To expand your business fast across states, implement a franchise or dealer model.

How Much Does It Cost to Start a Solar Business?

Starting a small solar installation business typically requires $50,000-$100,000 in initial investment.

Category	Item/Equipment	Typical Price Range (USD, 2025)	Notes
Solar Panels	Polycrystalline Panel	$100–$140 per 400W	$0.25–$0.35/watt; lower efficiency
Solar Panels	Monocrystalline Panel	$140–$200 per 400W	$0.35–$0.50/watt; higher efficiency
Solar Panels	All-Black Panel	$160–$220 per 400W	Premium aesthetics
Inverters	String Inverter	$500–$2,500	1 per system
Inverters	Microinverter	$100–$250 per unit ($1,000–$3,500/system)	1 per panel
Inverters	Power Optimizer	$20–$80 per panel	Used with string inverters
Inverters	Hybrid Inverter	$1,500–$5,000	For battery/grid-tied systems
Racking & Mounting	Roof-Penetrating System	$500–$2,000 per system	Standard for pitched roofs
Racking & Mounting	Ballasted System	$1,000–$3,000 per system	For flat roofs/ground
Racking & Mounting	Rail System	$1,000–$2,500 per system	Traditional mounting
Racking & Mounting	Rail-less System	$800–$2,000 per system	Faster install, lower material cost
Racking & Mounting	Ground-Mount System	$2,000–$10,000+ per system	For large/unsuitable roofs
Batteries	Lithium-Ion Battery (10–13.5 kWh)	$6,800–$15,400	Hardware only
Batteries	Other Chemistry Battery	$4,000–$10,000	Lower cycle life, less common
Batteries	Battery Installation	$2,000–$3,500	Labor and integration
Balance of System	Electrical Conduit	$100–$300 per system	Wiring runs
Balance of System	Wiring & Connectors	$100–$500 per system	MC4 and other connectors
Balance of System	Combiner Box	$50–$200 each	For string connections
Balance of System	Disconnect/Safety Switch	$100–$300 each	Required for code compliance
Balance of System	Monitoring System	$200–$1,000 per system	Basic to panel-level monitoring
Business Essentials	Service Vehicle	$20,000–$40,000	New or used van/truck
Business Essentials	Business Insurance & Bonding	$5,000–$10,000 annually	Liability, workers’ comp, bonding
Business Essentials	Licensing & Certification	$2,000–$5,000	State/local licensing, NABCEP, etc.
Business Essentials	Initial Marketing Efforts	$5,000–$10,000	Website, ads, materials, events
Business Essentials	Working Capital (First Few Jobs)	$10,000–$20,000+	Payroll, materials, cash flow