Solar energy inclination is at a new pace, and it’s just the start of a new beginning to make the environment cleaner. Seeing the solar power trend coming out stranger, without a doubt, there has never been a better time than today to start a solar business.
If this is not enough to get convinced about having your own solar business, let’s have a look at some stats.
With the start of over 10,000 companies and employment opportunities for 263,0000 workers in the solar industry, the U.S. solar industry alone made a profit of approx. $35 billion contribution to the American economy.
Moreover, the cost of installing solar panels has been reduced by 50% from some past years. This gives a huge opportunity for homeowners as well as businesses to invest in solar power to fulfill their energy demand while being soft towards the environment. Also, as everybody is well aware the Sun is one of the largest sources of energy which is readily available anywhere.
By now, you have understood the demand and the profit-making by operating a solar business. So, anyone who wants to be his boss and is also concerned about the environment can take advantage of this emerging business opportunity.
But before jumping into the business, it is important to collect all the necessary information. That’s why we are here with this comprehensive guide on how to start a solar business.
Let’s get started!
Important things to know before starting the Solar business
1. Search for the niche market
Before investing to start a solar business, it is important to research thoroughly and find out what other companies are already offering and what are their shortcomings. Then you should try to focus on this gap to emerge as a leading business in this field.
Other than this, go deeper and search for the market of your interest. You should figure out the things at which you can go better than others, like providing solar financing options, better repair and maintenance services, or giving better customer service.
You can also provide remote solar panel installation services to generate more solar leads. Then you can coordinate with the local persons to take care of the rest of the work post-installation. In short, the scope of the solar panel business is endless and you can find the loopholes and work on them to create a wide scope to scale the business.
2. Offer financial assistance programs
If you offer more than just offering the product, you can become the king of your solar field. You should know where and how you can help your customers in every possible way. One of the major areas is financial programs where you can lure more and more customers.
You can offer incentives to rebate programs run by the Local Government and the Federal State. This can act as a differentiator for your business. If you help your customers save money and time on the deals, they will buy from you.
3. Take care of solar business licenses and permits
Many States require solar licenses to start the solar panel installation process. Business owners in such States need to have Federal and State Licenses and Permits. This one is very crucial to take care of if you don’t want your hard work to go in vain later.
4. Solar certifications
There are many government-approved solar certifications to raise any business’s standards. So, you can qualify your solar company with reliable solar certifications to stay ahead of the curve. It will bring more customers to your business as they will blindly trust you.
5. Service agreements
Any solar business should draft a service agreement that would have all the installation requirements, the cost associated with it, and the customer’s expectations. This is important to make sure that the solar panels will provide satisfying performance and efficiency.
How to Start a Solar Business: A Complete Guide
Now you know before investing in a solar business what a company needs to have and learn. If you take care of all the loopholes before all, you can make use of the untapped market. So, without further ado, let’s learn about the steps to start a solar business.
1. Make a business plan
Any business needs a clear action plan and the same is the case with solar businesses. If you don’t pay attention to business plans, your money and efforts can go in vain.
Under a business plan, you should consider the following:
2. Name of the business
Selecting a correct business name can be a confusing task, but it can play an important role in marketing your business. You should select the one that matches the vision and mission of your business. It should also look professional while advertising.
3. Suitable location to provide solar services
Selecting the right location plays an important role in the success of your long-term business. This is one of the steps that should be decided in the initial stages of your business. If you don’t do so, you can end up at a loss.
So, you should research properly and search for a location. For example, you can choose a location where you can get a lot of business. Suppose you deal in commercial solar panels, make sure you are near a commercial area where the business owners are ready to pay for the PV services.
But finding a place in the required location doesn’t mean you should put yourself in a burdensome situation that may get heavy on your pocket. It can put a financial burden on your pocket. Other than this, make sure to find a location that is legally ok as per protocols.
4. Target Market
4nowing the target market is one of the major steps to follow before you invest to start a solar business. You should know the market you are going to target, like, residential, commercial, or both.
Furthermore, in residential services, are you going to provide only panel services on rooftops, or are you interested in field farms solar services too? Overall, if you put your focus on a specific market area the services you want to offer will help you to serve better. This way you can find a vast customer base.
5. Upfront and other associated costs of solar panel services
Starting a solar business demands a lot of investment. If you are going to start a solar business as a first-time starter, chances are to invest upto $500,000 to market the product, hire a team, etc. If you go for a franchise-based model, you can start it with a lower investment of approx $100,000 to $350,000.
Other than this, here is a long list of expenses, like, transportation, training, licenses, insurance, marketing campaigns, payrolls, etc.
6. Legal entity creation
The next important thing is to register your solar business under a legal entity. Like, a partnership business, sole proprietorship, LLC (limited liability company), etc. All such entities have their benefits.
For example, making an LLC entity will assist in protecting you from being personally liable in any legal penalty or tax rebate case. So, be careful enough to create a legal entity.
7. Register for taxes
If you want to take advantage of tax rebates, you should register your business under State and federal solar tax programs. For small solar businesses, it can be a huge relief.
To make you eligible for tax registration, you will need to have an EIN (employer identification number). Every State has different tax programs, so before applying, learn thoroughly about it.
8. Options to finance the business investment
Once you decide all the above things, it is time to think about the finances. A solar business needs a huge upfront investment and other additional costs. So, the question now is ‘how to start a solar business without having much in the pocket’. There are many ways to make this possible and here we have discussed some of them:
- You can take bank loans.
- Opt for SBA-secured loans.
- Government loans or grants are also available.
- Opt for Angel financiers.
- You can also ask friends and family to invest.
9. Get business insurance
Like our vehicles and other expensive assets need to be insured, the same is the case with businesses. Apart from protection from any legal action, it is important to protect the business from any unfortunate property damage, or any potential claims.
Opting for solar business insurance adds more benefits, like automobile liability coverage, worker’s compensation, etc. There are a lot of insurance options available in the market, so it is advisable to analyze your needs and choose the correct one for your business.
10. Open a dedicated business bank account
As having a personal account is important to manage finances, the same is the case with business accounts. With it, you can easily manage taxes and revenue. Opening a business bank account is as easy as having a personal bank account.
Also, if you want to know more about the rates and benefits of business-related accounts as some large banks offer it, you should contact the selected bank.
11. Hire a strong team
Whether you want to operate the solar business on a small or large scale, you may not manage everything on your own. So, you need a good team to get better results.
Also, in the initial stages of any business, it is obvious that you will have a limited budget, so having the right sales and marketing staff becomes more crucial.
The sales team plays an important role in the operations of any solar business as this market is growing at a good pace. To make the most profit, it is essential to generate solar leads.
Without having a solid sales team, it is almost impossible to get exclusive solar leads as the competition is huge. So, salespersons are the ones who can drive the conversion rates, so it is important to hire the right ones.
Try to consider the candidates with the following points:
- Who are experts in the niche?
- Smarter people than only hard workers.
- Have some experience in the same industry.
If you are in the initial stages of the business, you can outsource the team rather than having an in-house sales team.
12. Tie up with wholesale solar panel parts suppliers
You alone can’t run the whole solar business, it takes collective efforts. A business needs to maintain a chain of members, partners, suppliers, technicians, etc.
It is really important to build a healthy relationship with each one who can become a part of your business to generate profits for you in the future.
13. Go for a business website
After you are all set to start your business, considering the way to generate high-quality solar leads is equally important. In this digital competitive era, online marketing is playing a major role.
Almost every online business has its online presence. And having a professional business website is one of the most important ones. It makes your business credible if they own a business website. While you start your offline business, have a professional-looking and well-optimized website.
14. Make the most out of offline marketing
Digital presence can take the business to the next level with a broader audience, but traditional methods are equally important. So, offline marketing methods still hold an important space in this generation too. It helps you to build strong customer relationships.
You should look for innovative ways to do solar service advertising in your local region. You can opt for flyers, banners, newspaper ads, or global energy magazines to market your solar business. Once you have enough sales, it will help to create a long chain of customers through word-of-mouth marketing.
Sum Up
That’s all for now!
This is our comprehensive guide on how to start a solar business. In short, starting a solar business from scratch needs:
- A thorough research.
- Investment in terms of resources, like, time and money.
- Marketing skills.
- Knowledge of changing trends.
If you pay attention to all the given steps in this guide along with your expertise and practical knowledge, you can go a long way in the solar business. And you are ready to start your own solar company. After this, try to fetch more and more solar leads in the sales funnel through constant efforts and get handsome profits.
Hope this blog is informative and useful for you!
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Author: Aryan
