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The future of the solar business looks promising. Solar PV capacity totaling 108.7 GWdc, or the equivalent of 18.9 million households, has been built in the United States. Over the previous ten years, the price of installing solar panels has also decreased by more than 70%, aiding in the industry’s constant expansion. Given these noteworthy figures, now is a fantastic opportunity to launch a solar panel installation company.

To start a commercial solar installation business from scratch, however, involves careful planning and preparation, just like starting any other kind of business. You’re in luck because this step-by-step manual gives you all the knowledge and advice you need to start along the path to success as an entrepreneur.

Step 1: Find Out if this is the Right Business for You?

The first step is to decide whether launching a business to install solar panels is a good idea. Consider it a tool to determine the idea’s genuine potential.

Positives Vs Negatives

Due to rising demand, there is a good probability of success.

Government grants and aid are easily accessible.

You will contribute to saving the earth!
Complex activities and physically taxing fieldwork

Substantial initial outlay

The solar sector saw strong growth in 2020 of 43%, resulting in an annual national grid addition of 19.3 gigawatts. A pandemic that decimated the majority of industry coincided with the unprecedented expansion.

The sector is also anticipated to grow by a factor of four between 2020 and 2030. The government’s renewable energy programs and rising climate change concerns are the major forces behind this. 

Take the Investment Tax Credit (ITC) program, for instance, which the government launched. A tax credit equal to 26% of the price of installing a solar panel system from 2020 to 2022 and 22% in 2023 is provided to consumers under this proposal.

  • Industry size and historical growth — The US solar panel installation market has been constant over the last five years and is expected to be valued at least $11 billion by 2022.
  • Forecast for growth: Through 2027, Mordor Intelligence expects the US solar energy industry to increase at least 17% annually.
  • More than 13,000 companies specialize in the installation of solar panels in the US.
  • Employed population – There are about 55,000 individuals working in this sector.
  • government initiatives that help the solar energy sector
  • Increasing worry on climate change
  • More people are requesting clean, renewable energy.
  • Solar photovoltaic cell prices are falling

Cost of Starting Solar Panel Installation Business

Start-up costs for a solar panel installation business range from $45,000 to $140,000. In order to get things going, startups in this industry invest about $92,500 on average. A company truck, marketing, insurance, and equipment purchases account for the majority of this funding.

Is Solar Panel Installation Business Profitable?

The average cost of a residential solar panel installation project, including the price of the solar panels and installation, is $16,800. A solar firm typically has a 10% profit margin. 

Working part-time for the first year or two, you might do two installs each month for $17,000 each, generating around $400,000 in income. Assuming a 10% margin, this would net you a profit of around $40,000. If your company expands, you may perform five installs for $25,000 per month. This would result in $1.5 million in yearly sales and a tidy profit of $150,000. 

Entry Barriers

Entry requirements are minimal for businesses that install solar panels. The following provide significant obstacles for newcomers:

  • Significant startup costs: Since the majority of the money is spent on the first inventory of solar panels, starting a solar business requires a significant initial investment.
  • Lack of product differentiation: The installation services for solar panels are rather typical, leaving little possibility for originality and innovation. It is difficult to differentiate yourself from the competitors as a result of the ripple effect.
  • Lack of switching costs: Customers may easily transfer from one firm to another in this industry since there are no switching expenses.
  • Learning and experience: If you want to succeed in this business, you need to know how to install solar panels. A few months of practical experience are also necessary before you can begin. How quickly you may land a customer as a new entrant may depend on these two elements.

Step 2: Create a Strategy

You should develop your idea in order to compete in a crowded market now that you are aware of the requirements for launching a solar panel company.

Even if you are already confident that you have the ideal product or service, market research will give you the upper hand. It’s crucial to carry out market research since it may help you better understand your clients, your rivals, and the environment in which you operate.

Identify a Gap

Examine local solar panel firms’ offerings, costs, and client testimonials by conducting research on them. You’re aiming to fill a market gap. For instance, it’s possible that a solar panel company that offers quick installation is lacking in the local market.  

Your word-of-mouth advertising may pick up steam as a result, drawing customers in immediately.

Due to the significant demand in the top five states listed above, running a solar panel installation business might be profitable.


It’s critical to stand out and develop your own personality in a commercial environment when your rival frequently declares themselves to be the best. As shown below, there are three models you may use to make your solar panel business stand out:

Model 1: Provide expert installation services.

You won’t stock solar panels in this model. However, in collaboration with businesses that store and sell solar panels, you will provide specialist solar installation services.

The most economical place to start is by providing specialist installation services. Additionally, this approach enables you to get the installation expertise you need to get established.

Model 2: Pay attention to product sales

With this business strategy, you will stock and market solar panels. In association with businesses that stock and market solar panels, you will outsource installation services.

The best way to streamline operations and outsource fieldwork is to concentrate on product sales. You may then focus on your company’s sales side of things. Additionally, as soon as your firm starts to make a sizable profit, you may build a full-time crew.

Model 3: All-encompassing

With this business strategy, you will stock and market solar panels. Through internal solar photovoltaic installers, you will also provide installation services.

To buy merchandise and hire a group of dependable fieldworkers, you will need to invest a sizable sum of money in the all-inclusive model. This strategy should only be used if you have a large amount of cash because you may anticipate paying substantial operational costs.

You can provide ancillary services like advice, maintenance, and repair in addition to selling and installing solar panels. While these services might not bring in a lot of money, they could guarantee a consistent flow of clients and foster brand loyalty.


Solar panel costs range from $5,000 to $40,000 for entry-level and premium models. These costs only reflect the price of the panels; labor and the cost of other supplies, like as the inverter, are not included.

Up to 10% of the solar panel’s cost may be attributed to the inverter. Therefore, for a typical solar panel installation project, you may anticipate making $1,200 by selling the inverter.

Depending on the job and size of your solar system, the cost of labor to install a solar panel system can range from 20 to 40% of the system cost. For a $12,000 solar panel, labor expenses should be roughly $3,600. An average solar installation project makes $16,800 in profit overall.

The Step By Step Profit Margin Calculator may be used to calculate your markup and final price points once you have an understanding of your expenditures. Do not forget that the prices you employ at launch should be flexible if the market requires it.

Target Market

You must pinpoint your target client so that you can tailor your marketing effectively if you want to create a strong foundation for your solar panel installation firm. In all consumer groups, there is an increasing demand for solar panels. Include the following in your target market:

  • Owners who live on their own
  • habitational relationships
  • Manufacturers
  • Schools
  • Target is a prime example of a retailer. The enormous retailer intends to switch to pure solar power by 2030 and has already put 500 solar panel systems on the roof of their shop.
  • Hospitals and nonprofit institutions – Massachusetts General Hospital Boston is a prime illustration. Through the installation of a 476kW solar energy system, the hospital was able to save $95,000 every year on energy costs.


Your startup plan will determine what kind of commercial space you need most.

If you don’t want to have solar panels on hand, you may, for instance, run your business from your house. If you provide specialist installation services, you may run your firm from home. But if you want to sell solar panels and offer installation services, you’ll need to rent a warehouse and a real storefront. 

On websites like Craigslist, Crexi, and Instant Offices, you may locate business space for rent in your neighborhood. You might wish to abide by these general guidelines while selecting a commercial space:

  • Accessible by public transportation in a central location
  • With plenty of natural light and ventilation
  • As your firm expands, your lease might be made more accommodating.
  • A facility that is ready to use and doesn’t require any substantial upgrades or repairs

Step 3: Write a Business Plan

Every organization requires a plan. This will serve as a manual to help you launch your firm and stay focused on your major objectives. A business plan also aids in the better understanding of your firm and its goals by possible investors and partners:

  • A concise executive summary of the full business plan should be created when it has been completed.
  • Business overview: A description of the organization’s vision, purpose, ownership, and goals.
  • Please include a detailed description of your products and services.
  • SWOT analysis and market analysis are two ways to analyze market trends, including differences in demand and development potential.
  • Construct a list of the benefits of your services after analyzing your top rivals’ strengths and flaws.
  • Develop sales, marketing, and promotional tactics by considering your firms’ USPs (unique selling propositions).
  • Overview of the management team, including a corporate structure, information on each member’s responsibilities and educational background.
  • Operational Plan: The operational plan for your firm outlines logistics, office location, essential assets, and other purchasing decisions.
  • Financial Plan: Three years of financial planning, which includes startup expenses, break-even analysis, profit and loss projections, cash flow, and a balance sheet.
  • Added financial or commercial documentation should be included in the appendix.

Step 4: Create a Marketing Plan

You should still spend in digital marketing even though some of your customers will be passing byers or internet visitors. For new firms, spreading the word is crucial since it will increase brand and client recognition. 

Once it’s up and running, connect your social media accounts to your website and vice versa. Social media is a fantastic tool for company promotion since you can make interesting postings that promote your goods: 

  • Facebook is a fantastic paid advertising tool since it lets you target particular demographics, such as males under 50 in the Cleveland region.
  • Instagram offers the same advantages as Facebook, but with distinct target markets.
  • Website: SEO will make your website more visible at the top of relevant search results, which is essential for boosting sales. Make sure to optimize your website’s calls to action. Play around with the wording, color, size, and placement of calls to action like “Install Now.” This may significantly enhance sales.
  • Google and Yelp: For companies that depend on local clients, listing on Google My Business and Yelp might be essential to attracting attention and clients.
  • Competitions and freebies – Create interest by providing rewards to clients who finish a certain task, such free installation for each purchase of 20 solar panels.
  • Put up enticing signs at both your store and website.
  • Flyering – Hand out fliers throughout your area and at professional gatherings.
  • Sales over the Counter – Present your solar panels in regional marketplaces and trade events.
  • Publish a video — Publish a movie describing your solar panels. If you add comedy, it can gain popularity.
  • Find recommendations – Provide incentives to encourage existing customers to recommend new customers.
  • Paid social media advertisements: Use sites that can help you contact your target audience and run focused advertising.
  • Make a podcast so that you may engage with your audience on a personal level.
  • Put together a webinar and use a video seminar to share your knowledge on solar panels with the world.
  • Create infographics and post them, then use them in your content.