The solar industry in the US was worth $16.9bn in July 2022, and the market size was expected to grow by the end of the year by 27.3%. Market size has grown faster than the whole utility sector. It ranked 8th among utility industries and 442nd biggest in the country.
If you’ve been wondering what business you can start today, consider a solar power company. This is a wonderful chance to tap into this $12 billion industry expected to grow at 25.1% by 2026.
You may wonder how to join this lucrative business and what you need it for. Fortunately, this article is going to give you whatever you need regarding how to start solar panel business.
Let’s get started. ⚡
✅ Learn Solar Industry
Part of learning how to start a solar panel installation business is to learn about it. Doing this will give you a headstart before investing your money. The US has been relying on fossil fuels for over 100 years. However, the trend is changing with the growing concern about climate change.
Solar is an abundant source of clean and renewable energy on earth. Panels are used to capture energy from the sun through a photovoltaic effect. The sun works like a massive nuclear reactor that emits huge amounts of energy on the planet.
After collecting energy from the sun, the panels store it in batteries for current and future use in homes and commercial establishments. More people have realized the need to lower their carbon footprint, and switching to solar is a wonderful solution.
This has made learning how to start a solar farm business a great idea. The country has a long history of using this renewable energy and has the world’s oldest power plant in California. More states, such as Hawaii, are making solar energy mandatory, with plans to be 100% running on this energy by 2045.
Now that you’ve realized how big this business is and expected to become, it’s time to discover more about how to start a solar installation company.
✅ Plan Your Solar Business
A business plan highlights the current state of your solar farm and lays out the growth plan for the next five years. It also includes your business goals, strategies for reaching them, and market research to support the plans.
Is A Business Plan For A Solar Farm Necessary?
A business plan is essential when thinking about how to start your own solar company. It will be handy when soliciting funding and lays out strategies for growing your business. The plan needs annual updates as the business grows and changes.
What Are The Parts Of A Solar Business Plan?
A thorough business plan must have10 sections as highlighted below.
The executive summary is the introduction of a business plan. You must write this section last since it summarizes all other sections. The summary quickly gives the reader an overview of your business, whether you’re a start-up or an established business.
An executive summary includes an overview of every section in the business plan. This may include:
An overview of the solar industry
- Type of business
- Direct competitors
- Target market
- Key members of your team
- Marketing strategy
- Financial plan
You include your type of business in this section and its background. This section seeks to answer questions including:
- When did you start your business?
- Why did you start a solar farm?
- What milestones have you achieved so far?
- What is the legal structure of your business?
This section includes an overview of the solar industry. Researching the industry gives you knowledge of the market and how it operates. Market research also enhances strategy after identifying market trends. Studying the market makes you an expert and the knowledge to choose a niche.
Industry analysis seeks to answer questions including:
- What is the size of the solar industry?
- Who are the key players in the market?
- What are the current trends in the market?
- Who are the leading competitors?
- What is the potential growth in the industry?
You also include details about your potential customers in a business plan in this section. Are you targeting homeowners, business owners, solar power utilities, or the federal government? Your target market will determine how to start a solar energy company.
Each customer segment would need different services. Equally important is segmenting the target customers by location, wants, and needs. This is important since solar companies usually serve people in the same region. Doing this will make planning your operations a breeze.
This is where you identify direct and indirect competitors, including other solar farms and potential options for your services. You must understand key details about your competitors to make a SWOT analysis.
- This should answer questions including:
- What type of customers do they serve?
- What renewable energy technology do they use?
- How much do they charge?
- What is their competitive edge?
- What is their weakness?
- What can you do to perform better than them?
The solar marketing plan must include the Four Ps including:
- Product – a description of products and services you’ll be offering
- Price – what price are you going to charge customers
- Place – highlight the location of your business and locations that you plan to serve
- Promotion – describe the methods you will use to market your business
You include how you’re going to handle your short-term and long-term activities. Short-term activities include handling paperwork, writing grants, and keeping abreast of technology trends. Long-term activities include purchasing additional equipment and expanding your business.
A strong management team is essential for the success of any business. So, you must highlight key players, including their backgrounds and experiences in the industry, for proof of ability to grow the business.
The ideal team must have members with direct experience in the solar industry. You should also consider having an advisory board to mentor your business. This board of about eight members will provide strategic guidance to run the business successfully.
This must include a five-year financial statement broken down monthly, quarterly, and annually. The financial statement must include a balance sheet, cash flow, and income statement.
An income statement or profit and loss statement shows incomes and costs deducted to determine the net profit or net loss. Balance sheets show your assets and liabilities. The cash flow statement determines how much capital you need.
You attach any full financial projections here with supporting documents, including solar farm blueprints, contracts, and leases.
✅ Register Your Solar Business and Get a License
After writing a business plan, the next step is registering your business and getting the appropriate license (s). Before registering your solar company and getting a license, you must first get a name. The name must be easy to remember, available, and brandable.
How To Register Your Business
Check the local Secretary of State’s website to see whether your chosen name is available. Afterward, you must register your business after picking a structure to operate legally. The options for business structures include sole proprietorship, corporation, or limited liability company (LLC).
Each structure has benefits and drawbacks. However, most people opt for an LLC because it has tax benefits and limited protection in case of liabilities. Afterward, you must register for taxes by applying for an Employee Identification Number (EIN).
How To Get A License For A Solar Company
Some states require a solar license, but others don’t. If you plan to serve customers in multiple states, you must check for the licensing requirements in each. You may also need to have an electrician or plumbing license or both.
A solar certification is a good idea whether you need a license to operate or not. Certification gives customers confidence and gives you an edge over those without certification. There’s the potential to earn an average of $11,000 more annually when you’re certified. Besides, certification makes it easier to operate in multiple states for more business.
Some certifications in the solar industry to consider include:
- Installation professional
- Installer specialist
- Technical sales professional
- Design specialist
- Commissioning and maintenance specialist
- System Inspector
✅ Create A Business Bank Account
You need a bank account to spend and accept money in your business. Types of bank accounts include checking, credit card, saving, and merchant services accounts. A merchant services account allows accepting debit and credit card transactions from customers.
Getting a bank account is after acquiring an EIN. You also need business documents, an ownership agreement, and a business license. Some of the perks of a business account include the following:
- Limited liability protection
- Professionalism in business
- Option to get a line of credit during an emergency
- Boosts purchasing power
✅ Get Insurance For Your Solar Panel Business
Every business owner needs insurance to cover liability claims and property damage costs. Lack of insurance means you’ll have to use money from your pocket to cover those costs. The right insurance is essential to protect you from business risks and liabilities.
The kind of insurance you need for your solar business includes:
- Automobile liability insurance
- Workers’ compensation insurance
- General liability insurance
- Excess /umbrella liability insurance
✅ Brand Your Solar Business
The solar industry is becoming more competitive every day. You need the proper branding when planning on how to start solar energy business. Some of the brand positioning strategies you can use include:
Solar Production Guarantee
Prospects in the industry are now more knowledgeable about what they need. They take time to compare offers from different companies. You need a good strategy to make your proposals stand out from what other companies are offering.
The good idea is to offer a production guarantee where you assure customers that the installed system will generate a given amount of power in a given period. Solar panels are a long-term investment so you can offer a production guarantee ranging from 10 to 30 years. In case of any problems on the system, you commit yourself to resolve them.
Exceptional Customer Service
Another branding strategy on how to start a solar energy business is offering exceptional customer service. Don’t make the mistake of focusing on sales and failing to prioritize customer service quality at every stage in your business.
Delivering excellent customer support will lead to satisfied customers who won’t hesitate to recommend you to their friends and family.
✅ Create A Website For Your Solar Business
When wondering how to start a solar company, getting a website is crucial. It will be the first point of contact for potential customers to connect with your business. So, you need a website that is visually appealing, informative, and easy to navigate.
Here are reasons why you need a website for your solar company:
- Standing out from the competition
- Making it easy for potential customers to reach you online
- Keeping customers updated
- Giving your brand a professional outlook
- Generating business leads
Now that you know why you can’t operate your solar business without a website, the next step is to find a professional web design company. Most companies do websites for all kinds of businesses. However, look for a web designer with a specialty in solar websites.
✅ Marketing Your Solar Panel Business
Now that you know how to start a solar power business, the next step is to get customers. You need strategies to build and grow a customer base. Here are options to help market your solar panel business.
Referrals And Testimonials
If former customers recommend you to their friends and family, you can win more customers. People are always careful when choosing a solar company because solar panels are a sizable investment.
So, they always ask for good company from the people they know. Alternatively, they take time to read what former customers for the company say about it. Therefore, asking your current customers for referrals and testimonials will significantly win you more clients in the long run.
Share Love For the Environment
There’s growing concern about conserving the environment. As people become more aware of their role in achieving this, they are always looking for ways to lower their carbon footprint. The good idea is to switch to solar energy since it’s clean energy.
Owners of solar businesses can tap into this by portraying themselves as champions of environmental conservation. This will win like-minded people who won’t hesitate to switch to green energy.
Using Social Platforms
Social media is great for businesses to generate leads today, given the number of people who spend a lot of hours on it daily. You can use influencers or have a page on various platforms. Regular updates on the pages allow customers to keep abreast with whatever is going in your company. You can also run promotions or question-and-answer sessions on social media.
Engage In Corporate Social Responsibility
Another way to make your business stand out is to engage in social events and causes in your community. This will make the people in the area see your business contributing to their well-being. Given that your solar business contributes to protecting the environment, the local people won’t hesitate to support you.
🏁 Final Thoughts
Management is essential now that you’ve finally set up your solar business. Consider Field Complete, a wonderful tool for managing solar businesses. The app has various features, such as invoicing, reporting, dispatching, and scheduling, that make managing a solar business a breeze.