How to Start a Solar Company Step by Step

how to start a solar company step by step

The solar industry is booming. Solar power was the leading new renewable energy source by capacity in 2020, and it consistently ranks first or second in new energy capacity installed going all the way back to 2010.

As a result, solar businesses are among the fastest growing professions in the US, creating numerous opportunities for businesses. There are plenty of niches to choose from, including sales, service, repairs, and installation.

If you want to start your own solar company, here’s your step-by-step guide to get it up and running.

Before You Start – Conduct Your Research

Becoming an expert on solar is more than just knowing your product.

You need to keep up with not only the industry and technology developments, but the rebates, incentives, and other trends or changes. Businesses that do their research save a lot of money for their customers, which can translate to more contracts.

No matter your niche, it’s vital that you can navigate financial incentives and manage the utilities and regulations that may not be obvious during the planning process.

From there, you can choose your niche. It’s best to fill the gaps between large, oversaturated markets. You can find out more about what’s happening locally from the SEIA chapter and the chambers of commerce.

There are several market niches for solar, including:

  1. Solar equipment
  2. Distributors
  3. Installers
  4. Service & Maintenance

Let’s go into these in a little more detail:

  • Seller of solar equipment: Solar equipment is more than just solar panels. Selling solar equipment includes replacement batteries, solar water heater products, and more. There’s a growing market for these products, especially for novelty items based on solar power.
  • Distributor: Distributors are the “middleman” between the manufacturer and installer or retail location. You can work with manufacturers to find available distribution channels for new or existing products in your area.
  • Installation of products: Solar panel installation is heavily marketed because of rebates that are offered to homeowners. Installation spans several different areas, however, including solar panels, solar water heaters, pool heaters, and ancillary needs.
  • Service and maintenance: After installation, customers have to maintain their solar equipment to keep their systems working their best. Maintenance includes tasks like cleaning panels, checking wiring, and assessing battery function.

It’s best to consider what niches are heavily saturated in your area and where you can fill a market void. You may be able to focus on a niche that is underserved and excel.

Get Licensing & Certifications

Not every state has the same requirements for licensing and certifications, but it’s important to see what’s required of you.

Solar Licensing

Not every state requires solar licensing, but many do. If you’re planning on working only in your state, you only need the licenses and certifications required by the state. If you’re planning on working in neighboring states, you will need licenses and certifications for those states as well.

At the least, you may require a plumbing or electrician license – possibly both – and some states require a specialized solar contractor license.

Learn more about your state’s requirements here.

Solar Certifications

Whether a license is required or not, a solar certification is a smart choice for your business. Solar certifications instill confidence in the customer, putting you ahead of competitors that didn’t take this step.

In turn, certification can lead to more income. Certified solar professionals may earn as much as $11,000 more annually. Getting certified also enables you to work in more than one municipality or state.

Several certifications are available through the North American Board of Certified Energy Practitioners, including:

  • PV Installation Professional (PVIP)
  • PV Technical Sales Professional (PVTS)
  • PV Design Specialist (PVDS)
  • PV Installer Specialist (PVIS)
  • PV System Inspector (PVSI)
  • PV Commissioning & Maintenance Specialist (PVCMS)

Set Up Your Business

Once you’ve completed all the solar-specific research, licensing, and certifications, you have to handle the business part.

Start an LLC

A limited liability company, or LLC, is a business structure that provides several benefits, including flexible structure, liability protection, and tax advantages. They’re similar to a corporation, but easier to form and operate.

States can vary in the requirements for an LLC, but most will include choosing a name, selecting the members, creating articles of organization and operating agreements, and getting an employer identification number (EIN). You may need to get permits and licensing according to your state law as well.

Business Accounts

Using dedicated business banking and credit accounts is important for protecting your personal assets. When your accounts are mixed, your personal assets like your home, car, or other valuables are at risk if your business is sued. In business law, this is known as “piercing your corporate veil.

In addition, learning how to build business credit can help you get financing or credit cards that are in your business’s name, instead of your own. These may come with better interest rates, higher lines of credit, and other perks.

You may want to consider a Net 30 account as well. This is used to establish and build business credit as well as increase your business cash flow. With this account, you can buy goods and repay the balance within 30 days – so you’re not paying money upfront.

Net 30 credit vendors report to the major business credit bureaus, such as Experience Business and Equifax Business Credit, to build credit in your business’s name and open available credit in the future.

Business Insurance

Establishing an LLC protects your personal assets by keeping them separate from your business, but that may not be enough. You still need business insurance for your solar business to cover possible liability claims, property damage, or other costs.

Otherwise, you could end up having to pay cash out of pocket for a problem. If it’s early in your business, you may not be able to recover from the loss.

Having the right insurance coverage is important for mitigating potential risks and liabilities. Contracting businesses must meet general insurance requirements, but there are some specifics for the solar industry:

  • General liability insurance
  • Automobile liability insurance
  • Workers’ compensation
  • Umbrella liability insurance

Most contract liability insurance provides a minimum of $500,000 coverage. Getting the right insurance from the start will put you in a good position before you ever close your first deal.

Build Your Solar Team

Find Sales Representatives

Sales representatives are the core of your solar business. No matter what niche you’ve chosen, someone on the solar sales team is making some of their salary by knocking on doors and making cold calls.

When you’re evaluating sales representatives, here are three elements that are important to consider:

  • Knowledge about the solar industry and your niche
  • Persistence and passion
  • Ability to respond to questions and concerns from customers

Customer satisfaction is the most important aspect of a successful business, and that takes good sales representatives. Even if a sales representative needs some development, if they have passion and soft skills, consider bringing them on and hiring a solar sales coach.

Small operations may not be able to get an in-house team immediately. If that’s the case, it’s okay! You have options to outsource sales, some of which even offer sales support specific to your niche.

Building a Team

Once you have a sales team, it’s time to build out the rest of your team with support staff. Ideally, bring on candidates that are NABCEP certified. If you have attractive candidates who aren’t yet certified, provide the resources to do so. The investment will pay off.

Make sure you train your sales representatives, installers, solar marketing teams, and any other staff on the specifics of your product or services. Everyone should have the time, resources, and support to learn about the product and services.

Planning Compensation

Compensation can be tricky in solar. Solar sales representatives are typically paid by commission. These payouts are a percentage of the total contract price or a cut of the base contract price, depending on your setup.

Otherwise, you can offer hourly or salary pay for your support staff.

Generate Leads

The professionalism, courtesy, knowledge, and service your team offers will give your business through referrals. Consumers put a lot of trust in recommendations from friends and family – even over marketing efforts – and referrals tap into this same trust.

Sales representatives will likely act as or support your marketing team, especially if they do their jobs well, and lead to less time spent on cold calling. You can also set up an organized referral network with other non-competing businesses.

For example, a roofer and a solar professional are a good match. They’re not in direct competition, but both are likely to come across customers who need the services of the other. Network with local businesses to see which businesses could help each other.

Define Your Brand

Your brand is what your company stands for and influences how the public sees you. Think of your brand as a person. What’s their personality? What impression do they make?

A strong, well-defined brand will help you stand out from competitors. Your brand should have a logo, color scheme, typography, and style. This represents your brand visually, but you’ll also need to develop these elements:

  • Brand voice: Is your brand formal? Professional? Light and approachable?
  • Brand promise: What’s your promise to your customers?
  • Brand values: What does your brand value? Think of things like social responsibility, respect, diversity, teamwork, community awareness, etc.

There’s a lot more to a strong brand than just these points, but it’s a good start to getting a foundation for your branding strategy.

Create Your Brand Website

After you define your brand and create your brand elements, you’re ready to build your website. Even if you don’t have any website-building experience, there are numerous tools to help you get a business website up and running in no time.

If you’re thinking of going without a website or doing it “later,” you may as well pack up shop. Your website is a key component of your success and you need to invest time and resources into it from the start.

Here’s why:

  • All legitimate businesses have websites. Having a website adds credibility to your brand to help you attract customers, not to mention that it’s a valuable hub of information to generate leads.
  • Social media accounts like Facebook, LinkedIn, and Twitter are not a replacement for a website. In fact, you’ll get better performance overall if you have a social media strategy and accounts that link to your business website.
  • Website builder tools make the process of creating a simple business website quick, easy, and cheap. You don’t need to hire a designer or developer any longer – though if you can, it may help.

Set Up a Phone System

Your business will need a separate phone set up to keep your business and personal affairs separate and private. It also allows you to automate aspects of the business, make it seem more legitimate, and give customers an easy way to contact you.

There are virtually endless options to choose from for business phone systems. Do your research and see which ones have the features and plans that work for your business.

Frequently Asked Questions

What Are the Day-to-Day Responsibilities in a Solar Business?

That depends on the business, but as the owner, your day will vary according to the work you have lined up. Some of the duties of a solar business include:

  • Installing solar panels, connections, and back-up battery systems
  • Contacting potential customers for initial survey
  • Working with customers to find grant opportunities, rebates, and financing
  • Scheduling installation crews and delivering products
  • Hiring staff as needed
  • Maintaining proper accounting and payroll procedures
  • Providing maintenance and repairs for existing products or equipment
  • Conducting a final survey and checklist of a completed installation

What Skills Are Necessary for Successful Solar Businesses?

Running a solar business successfully depends on knowledge of the industry. But at the end of the day, it’s still a business. A successful solar business owner will have skills like communication, hiring, management or leadership, time management, money management, and more. Solar is still a developing industry, so it’s important that anyone embarking on a solar business is committed to staying current on the changes and trends.

What Is the Growth Potential for a Solar Business?

This varies across the country. But as more people, cities, and states adopt renewable energy, the solar panel industry is expected to grow even more. The materials are getting more affordable and the technology is getting more advanced, opening the possibilities for solar to a wider pool of people.

If You’re Playing the Solar Game, Play to Win

Whether you’re launching your solar business or looking to elevate your solar sales process for exponential growth, high-performance sales training can transform your team and your business. Contact AJC Group to get started!

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