How to Start Your Solar Panel Business in 2024

Getting started with a new solar business is a very ambitious move that takes a lot of confidence to enact. However, turning it into a profitable business is quite the endeavor. If you think you have what it takes to be a successful solar panel company then think again. This is because you’re expected to deal with any issues that may affect your solar panel installation process. 

There will be times when you’re expected to deal with situations that require you to do things such as welding, roofing, plumbing, dealing with individual contractors, and even understanding the local grid. 

Solar panels might be simple to understand but, the business of solar panels is a totally different animal. As soon as you step into the business side of solar panels, you’ll be met with competitors willing to pounce on you to make sure that their business is the one that is seen flourishing. 

Before we go ahead, let’s take a quick look at how to start a solar panel business and make money.

Understanding the Solar Industry Landscape

Going in blind into any industry without any business ideas is a grave mistake. An entrepreneur’s primary responsibility is to be a subject matter expert to ensure that they have the utmost clarity. This is why you must understand what your solar business is all about.

Key responsibilities of solar installation businesses

A solar installation business is someone you call when you need to have solar systems installed. Usually, such installation businesses deal with clients that need renewable energy like solar energy in residential areas.

Since these installations are usually in residential areas, solar panels have to be installed on roofs. So solar panel installers are expected to be licensed to deal with roofing and plumbing. With such massive upfront requirements, an individual is very likely to ask, “what’s in it for me?”

Analyzing future growth prospects

Renewable energy sources has become quite the norm when it comes to development projects across the globe, with residential clients making a fairly big chunk of the consumer base. Why wouldn’t one want to replace electricity usage with a renewable yet reliable solar energy system? 

This trend has been rapidly expanding globally thanks to solar manufacturers constantly innovating and reducing the price of solar cells and solar technology. The goal for most of these manufacturers is to sell as many panels as possible.

With such a ripe opportunity at hand, who doesn’t likes to make the most of it in order to start a solar business?

Benefits of starting a solar panel business

As previously stated, there are a lot of people looking to capitalize on this opportunity. This means that you only have a small window of time to enter the rapidly growing industry. It is only a matter of time before the major players are consolidated.

Fortunately, the expansion in the industry is helping a local solar business to easily capture their regional solar market. There is money to be made if you’re able to do the same. If it sounds good so far, then you must be wondering what it takes to start a solar business.

Step-by-Step Guide to Launching a Solar Panel Business

Get ready for the laundry list of things that you’ll need to get started. The solar panel installation industry is not as straightforward as people make it out to be. A solar installation company has its own set of nuances. Here’s the list.

Step 1: Essential inventory & solar panels

To kickstart your solar panel business, having the right inventory is necessary.

How are you going to install and sell solar panels if you don’t have any yourself?

It is expected of a business to have sufficient inventory. Sufficient is the key word here; a lot of businesses tend to overspend on inventory.

A good way to negate this effect is by acquiring inventory based on the number of workers you’ve hired. Why would you need thousands of panels when you only have half a dozen people to install them?

Understand the demand in your locality to better estimate the required amount of investment. A solar power company is by no means a low-investment business plan. So, be prepared for the upfront costs to be heavy on the wallet.

Types of solar panels

Solar panels come in three main types:

• Monocrystalline panels: Known for high efficiency and sleek design.
• Polycrystalline panels: Cost-effective with decent efficiency.
• Thin-film panels: Lightweight and flexible but less efficient.

Suppliers and partners

Building strong relationships with reputable suppliers ensures a steady inventory. Some key tips:

• Research local and international suppliers.
• Check for partnerships with manufacturers offering discounts for bulk purchases.

Step 2: Procuring vital equipment

In the solar panel installation industry, tools are an essential part of the business.

Here’s where skimping is not an option.

If you skimp, you must deal with the consequences of equipment failing at the worst times. This includes logistical tools such as trucks/vans and software to optimize operations. 

As a solar business owner, ensure that customers get renewable energy at their place without a hitch. Investing once in reliable equipment usually proves to be a lifesaver for many solar businesses. 

However, alongside reliable equipment, a business plan must include backups to account for equipment failure.

Cost-effective equipment options

Some cost-effective tools include:

• Electric screwdrivers and torque wrenches for efficient installation.
• Solar design software for precise planning.
• GPS fleet management software for logistics optimization.

Step 3: Industry insights & technology mastery

Expertise in solar panels is non-negotiable.

How comfortable would you be giving your car away to a mechanic who barely knows how to start the thing?

For clients to prefer your solar business, you must approach an industry expert and understand the solar industry inside out. Once you’ve mastered the technical side, you’ve won half the battle. 

Armed with such knowledge, you’ll know your costs, condition, and challenges, putting you ahead of competitors.

Latest technological innovations

Stay updated with advancements like:

• High-efficiency solar cells
• Bifacial solar panels
• Solar tracking systems for maximizing energy output

Industry jargon for new entrants

Familiarize yourself with terms like:

• Net metering: A billing mechanism allowing surplus energy to be sent back to the grid.
• Photovoltaic (PV) cells: The core component of solar panels.

Step 4: Recruiting and training skilled labor

Installing solar panels inherently requires multiple workers.

Hire employees that are skilled but also well-behaved.

No amount of skill compensates for a worker customers find repulsive, nor do manners compensate for incompetence. 

Finding balance is key. 

A solar installer must fully trust their workers as they are the primary link between the business and customers.

Finding talent sources

Potential sources include:

• Local trade schools and apprenticeship programs.
• Online job boards like Indeed or LinkedIn.

Training programs

Provide hands-on training for:

• Solar panel system installation.
• Workplace safety guidelines

Step 5: Clientele identification and targeting

Understanding your clients’ needs ensures better service delivery.

Segmenting customer base

Segment customers into:

• Residential homeowners seeking energy savings.
• Businesses looking for long-term cost reduction.

Step 6: Ensuring comprehensive insurance coverage

Paying out of pocket is something no one wants to do for an avoidable mistake.

Get equipment and inventory insured to cover unexpected costs. Business insurance is essential to cover damages during installations. A liability insurance policy is just as important as getting the right license.

Types of business insurance needed

Consider these policies:

• General liability insurance.
• Workers’ compensation insurance.
• Commercial auto insurance for transport vehicles

Step 7: Licensing essentials and guidelines

Licenses are required to legally operate a solar panel business.

Depending on your state, you’ll need different permits and licenses.

Some states, like Massachusetts, require a construction license and an electrician’s license. Other states may have fewer requirements but still necessitate licensing for working with electricity.

Regional licensing requirements

Verify licensing needs based on state regulations, such as:

• Rooftop PV system installations.
• High-voltage solar installations.

Step 8: Strategic marketing approaches

Marketing efforts are the backbone of acquiring clients.

Don’t expect clients to come knocking on your door without marketing efforts.

Use referrals and traditional media to speak to your expertise. Also, highlight financial incentives like solar tax credits to attract clients.

Digital marketing strategies

Invest in:

• Local SEO optimization for visibility
• Social media ads targeting eco-conscious individuals

Offline marketing techniques

Leverage:

• Community workshops about solar benefits
• Partnerships with local businesses

Step 9: Securing investors and financing options

Financing is essential to scale your solar panel business.

If unable to self-invest, explore other funding options.

Many venture capital firms invest in promising solar projects. A solid business plan can attract investments or secure a business loan.

Pitching to investors

Highlight

• Industry growth trends
• Potential profitability of solar installations

Venture Capital vs. Self-financing

Compare the benefits of:

• Attracting venture capital for rapid scaling
• Relying on self-funding for greater control

Overcoming Common Challenges in Solar Business Operations

Much like any other business, solar panel contractors will also face their fair share of challenges. They are usually caused because of neglectful mistakes made by a new business. We’ve listed a few of them so that you don’t end up making the very same common mistakes when running your own business. 

1. Prioritization of operations

A lot of solar businesses prioritize things such as panel quality, maximum power delivery, and low price. While those aspects are important, they aren’t the most noticeable to the customer. The aspect that matters the most when it comes to a solar panel business is customer experience. 

While you could just give them free ice cream, we recommend that you gain their satisfaction by making your services as clear and linear as possible. Your job is not only to install solar panels but also to ensure that the client is at ease and isn’t bothered much by the process.

Such an order of priorities will not only help you retain the customer for longer. It will also make the customer more likely to refer your business name to other individuals that are looking to get solar power.

2. Addressing workforce training

The most common reason for a botched solar installation is human error. As previously stated, having the right skilled workforce is imperative for a solar installation business to succeed. Remember that a worker’s job is not complete by just having the panels installed.

With solar installations increasingly becoming common you will have to stand out from the competition and build a positive reputation to boost your solar sales. 

3. Efficient route planning and logistics

You’d expect a solar company to be good at installing solar panels but unfortunately, that is not the case due to poorly planned routes. The biggest gripe coming from customers is usually the amount of time it takes to get the job done.

Such delays are very frustrating and can damage the reputation of your own solar panel business. The time lost to bad planning is often overlooked by countless businesses but it does reflect in their overall sales and efficiency stats.

Business owners can never hope to reach their epitome without proper optimization. Thankfully, you can avoid almost all route planning issues with the help of Upper, a top choice for route planning software for solar business.

Boost Your Business with Upper’s Solutions

If you’ve dealt with planning routes, then you know how much of a menace it can be. Not only is it time-consuming and complex, but it is also inaccurate. Now couple this with accounting for service times and transit times to see how much time it would take for anyone to craft the perfect route. 

These issues are a matter of the past, thanks to Upper. With Upper route optimization software, you can create perfectly planned routes that account for almost anything that you want faster than ever! With One Click Dispatch, creating a highly accurate route is perhaps easier than ordering a pizza. Uploading and sharing data is just as easy with our API Integration which allows you to get the information that you need at lightning-fast speeds!

Upper also allows you to plan trips months in advance! This is especially important for a solar panel business where you have a wave of clients booked for future installations. You can also prioritize stops based on their urgency to customize the routes to best match your plans! 

In fact, U.S. based solar installation company Sunbility used Upper Route Planner. The automated route planning process helped to find the best routes for their technicians. With Upper, they could complete their jobs 75% faster than before. Additionally, Upper helped them get 3x service calls for solar panel installations, thereby growing their business. 

Conclusion and Next Steps

The solar panel industry is one that is rapidly growing across the globe. In such a market your best bet is to deliver consistently good services in order to build a reputation that carries your brand image for years.

Customers in this solar industry expect the quickest and finest services within their budget and it is crucial for you to meet those expectations to the best of your abilities. You will have to face difficult situations, but you will have to learn to deal with difficult customers in order to get the job done professionally.

Having Upper by your side will quickly prove to be a necessity once you start planning routes by yourself. Optimization is the key to maximizing the potential of any given delivery business.