How to Start a Solar Business: 10 Key Steps to Success

Solar energy is becoming increasingly popular across the United States. Solar energy technology has advanced, solar panel costs have decreased and the federal Investment Tax Credit (ITC) have contributed to widespread adoption. Especially as many homeowners and businesses look to avoid rising electricity costs and pursue environmental sustainability.

Creating any new business from scratch is no easy task, but can bring independence, reward and fulfillment. Below are a few quick tips to help you get your solar business started. Here’s ten steps to launching your business in 3 to 6 months.

These basic questions are crucial to clearly plan as you set up your business:

• Are you planning to sell to residential or commercial customers? Or both?
• Do you plan to both sell and install projects?
• Will you have your installation crews in-house or outsourced?

A residential installation can be priced anywhere from $15,000 to $50,000, depending on the size and type of panels installed. For companies that only sell and install panels to residential customers who pay all at once, you can see profits of $5,000 to $10,000 per job. Commercial installation pricing can widely vary. Projects for smaller businesses may cost around the same as a residential installation, while larger commercial projects may cost over $100,000.

Solar energy is a long-term solution to rising utility costs, making it an attractive option for homeowners and businesses alike. By launching a solar business, you position yourself at the forefront of this shift, offering customers savings and energy independence. Additionally, incentives like the federal Investment Tax Credit (ITC) and state-level rebates make solar more accessible, boosting demand for installation services.

The industry also offers diverse revenue opportunities, from residential and commercial solar installations to battery storage and maintenance services. With the right planning and execution, a solar business can be both profitable and purpose-driven. Beyond financial benefits, you’re helping reduce carbon emissions and build a sustainable future, which can be deeply rewarding.

One way you can form a strong team is by finding members that are NABCEP certified. NABCEP is a nonprofit organization widely recognized as a gold standard for certification in the solar energy industry. If members of your team aren’t certified, ensure they have the resources needed to earn their certification.

Make sure your team understands your business, products and services and company culture. From sales to installation and maintenance, your entire team should understand what your business offers and why it matters.

The residential solar industry in some regions may unfortunately have a poor reputation due to unethical sales practices. Make sure your sales professionals can educate consumers and build customer trust while offering solar solutions. Solar is a sustainable solution to lower electricity prices and build energy independence.

• Sales Professionals:
  These individuals are responsible for educating potential customers about solar energy benefits, handling objections and closing deals. They play a critical role in converting leads into paying customers and are often the face of your business during initial interactions.
• Installation & Maintenance Professionals:
  These are the technical experts who design, install and maintain solar energy systems. They ensure that systems are installed safely, efficiently and in compliance with local regulations. Maintenance professionals also troubleshoot and resolve any issues post-installation.
• Marketing:
  The marketing team is in charge of promoting your solar business and generating leads. They use digital campaigns, social media, content creation and other strategies to educate potential customers and build brand awareness in a competitive market.
• Accounting:
  Accountants handle the financial aspects of your business, from tracking revenue and expenses to managing payroll and ensuring compliance with tax regulations. They help keep your business financially healthy and prepared for growth.
• Human Resources:
  HR professionals recruit and onboard team members, manage employee benefits and ensure compliance with labor laws. They play a crucial role in fostering a positive workplace culture and addressing personnel needs.
• Customer Service:
  This team provides ongoing support to your customers, addressing inquiries, resolving issues and ensuring satisfaction. Excellent customer service strengthens relationships and leads to positive reviews, referrals and long-term loyalty.

As for any new business, in order to register for taxes you will need to apply for an Employer Identification Number (EIN). It’s easy and free! Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits. A solar panel installation business would need to create a services agreement. Which should outline the parameters of installation, the price and the expectations of the client. A solar panel business is often run out of an office. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). Also get Business Insurance to protect your company’s financial wellbeing in the event of a covered loss.

Using dedicated business banking and credit accounts is essential for personal asset protection. Besides being a requirement when applying for business loans.

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing. Develop a detailed financial plan for your first year with achievable revenue and profit and loss (P&L) targets based on available capital and resources.

What cities or areas will you sell into? Will you sell solar systems with the options for battery storage or electric vehicle charging?

Solar installation is a local business; spreading coverage out to too many areas at once hurts your profits and adds execution risk. Every customer who has solar installation needs site visits for permits and inspections and various installation milestones, so geographic territories are key to success.

Most businesses have a sales or operations leader that can close the initial customers and execute such contracts. Thereafter, you will need a team to scale the business.

“A minimum of 5 homes per month is necessary to sustain a start-up organization and getting to 5-10 closings per month within the first 6 months of business is crucial for a successful launch,” said Deep Chakraborty, CEO of Enact Systems.

Key elements of a sales and execution plan include:

• Goals and Objectives: Clearly defined targets, such as revenue milestones, customer acquisition numbers or project deadlines.
• Actionable Steps: Specific tasks or initiatives needed to achieve the set goals.
• Roles and Responsibilities: Assigning accountability to team members or departments for each task.
• Timelines: Setting deadlines to ensure progress stays on track.
• Resources and Budgets: Identifying the tools, personnel and financial resources required to execute the plan.
• Performance Metrics: Establishing key performance indicators (KPIs) to measure success and track progress.

A strong brand and marketing strategy will help your business stand out from competitors. When registering a business name, we recommend researching your business name by checking the following: your state’s business records, federal and state trademark records, social media platforms and web domain availability. 

Some popular website builders are: WordPress, WIX, Weebly, Squarespace and Shopify. Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. And best to integrate your website to your customer relationship management (CRM) system for efficient messaging and customer service.

When creating a brand for your business — ensure your logo, website, social media and promotional content are consistent. This means using the same logos, fonts and colors to make your company findable and recognizable. Additionally, ensure your brand is aligned with your unique value propositions, services and company values.

Most companies use a customer relationship management (CRM) tool to keep tasks and contacts organized and for solar sales, it is also used as a design and project management software. Soft costs for Solar businesses are high. Over 50% of the installed cost of a US solar project is non-hardware costs. Hence solar software platform(s) will integrate with your processes is crucial for a successful team outcome.

The global trend is for solar companies to adopt end-to-end solar platforms that are fully integrated and track the entire customer journey. All the steps – from the point of first customer lead capture, to developing their proposal, closing their contract and delivering the project, can now be managed on single software platforms like Enact. 

Another option is to use multiple software tools for different needs, for example Helioscope for design and Salesforce for CRM, which is not only more expensive as an approach, but also more time consuming to set up.

Hundreds of solar panel original equipment manufacturers (OEMs) — manufacturers that specialize in making specific products on behalf of brands — and dozens of inverter, battery storage or racking options are available. You need to plan well on partnering with the right OEMs.

Examples of top OEMs include:

• Solar Panels: Hanwha QCells, Jinko Solar and TRINA Solar
• Inverters: SolarEdge and Enphase
• Rooftop Racking Options: IronRidge, Unirac and SnapNrack
• Storage Batteries: Tesla Powerwall, Bluetti, Franklin WH, Generac and Enphase

Also, for the initial years you might be best suited to procure all your hardware from well-established distributors that can support your entire logistics needs. Some top U.S. solar distributors include CED Greentech and WESCO and they also provide extended terms for payment easing your working capital needs.

Residential solar projects are warrantied for over ten years of workmanship in California and most other states, backed by the licensed solar installer. Residential customers investing thousands of dollars upfront require good support and service to ensure they have a good experience as they save their way towards payback/cost recovery in 5-7 years. While solar systems are maintenance free, annual check-ups are recommended.

Moreover, as customers’ energy needs change over time e.g. buying an EV or change in electric rates, they might need to upgrade the solar array or add energy storage. A good solar business keeps customers happy to win all follow-on business and also win referrals from such happy customers.

Growing and scaling a solar business requires a strategic approach that balances immediate opportunities with long-term sustainability. Start by developing a clear growth strategy, setting long-term goals, analyzing market trends and identifying areas for diversification. 

For instance, expanding into commercial solar projects or other services like energy storage systems and EV charging stations can unlock new revenue streams and attract a broader customer base. Geographic expansion is another powerful growth lever; entering new regions or underserved markets can increase your reach, but it’s essential to research local incentives, regulations and competition to ensure success.

Investing in technology is key to staying competitive. Advanced solar design software and monitoring platforms — such as the Enact software for installers — and cutting-edge installation tools can improve efficiency and elevate your business. The Enact software streamlines the solar design and proposal generation process, empowering installers to create customer-ready proposals in seconds.

Streamlining and optimizing operations —such as standardizing processes, refining supply chains and focusing on quality control — can reduce costs and maintain consistency as you scale. Simultaneously, ramping up your marketing efforts through digital campaigns, SEO and brand-building activities can amplify your reach and attract new customers. To fund these initiatives, explore options like securing investors, applying for loans or reinvesting profits. With a well-rounded approach, your solar business can grow sustainably while remaining competitive in the fast-evolving renewable energy market.