Growing a solar company

The solar industry is one of the fastest growing industries in America and continues to offer opportunities for entrepreneurs that want to grow a profitable business and be part of our transition to a clean energy future.

How can you get into the solar industry?

Many of those that want to become involved’ in the solar business will not want to start a solar company but instead will be seeking jobs in the solar industry. If you are looking for employment in the solar industry then there are opportunities for:

  • Electrical contractors
  • Roofers;
  • Electrical and structural engineers
  • solar salespeople; and
  • Accounting and business administration professionals

However, for those that have an entrepreneurial spirit then the solar industry offers great long-term prospects.

With utility power prices slowly increasing and the cost of solar panels slowly creeping down the savings from installing solar panels for your home will get better and better.

What do I need to consider when deciding to start a solar business?

Licensing

There are general legal requirements for starting any sort of business and you will need to comply with these requirements. These requirements can be found at www.sba.gov. Find state business licensing offices and information here. There can also be specific legal requirements for starting a solar business in some states. For example, solar companies in New York have to register as a contractor with www.nyserda.ny.gov?. However, in most states, there are no specific legal requirements for starting a solar business in addition to the requirements for starting a normal electrical contracting business.

However legal and practical requirements can be quite different and as a matter of practicality, it can be difficult to attract customers if you do not have staff with solar specific training.

Throughout the country, solar work is considered electrical and construction work and so you need to have the appropriate qualifications and licenses to be an electrical contractor.

Market Research

The solar market is becoming more and more competitive and so before starting a solar business in a particular location you need to consider:

Demand for solar panels in your city

The Solar-Estimate website publishes a ranking showing the relative investment returns available to consumers by installing solar panels on their homes in each state. The higher the state ranking the better the consumer return and these pages also have the average payback period from installing solar in each state.

In general terms, the demand for solar panels for homes and businesses is a function of how expensive power is in a particular location and whether net metering is available in that location. Here is a summary of the top states for residential solar applications and a summary of the relative attractiveness of installing solar panels in each state:

Solar Panels California

Solar Panels Connecticut

Solar Panels Massachusetts

Solar Panels New Jersey

Solar Panels Arizona

Solar Panels South Carolina

Solar Panels New York

Solar Panels Maryland

Solar Panels Florida

Solar Panels Texas

Solar Panels Utah

The number of solar companies near you is also a relevant factor in your market research. However, a high density of solar companies can be both a pro and a con. A high number of solar companies indicates strong demand but also a lot of competition from more established companies.

The cost of solar panels in your city is also an important factor in determining the viability of starting a new solar company in a particular area. Costs of solar installations can vary a lot from city to city and it is important that if you do decide to start a business that you choose a pricing level that is the best balance of competitiveness and profitability. ;

Demand for solar panels installation in your area

In general terms, the demand for solar panels for homes and businesses is a function of how expensive power is in a particular location and whether net metering is available in that location. These are the reasons why markets like California, New York, and Massachusetts have seen a strong uptake of solar.

Competition in your area

The best way to see the number of solar companies in your area is to visit SolarReviews as most solar companies that operate in America are listed there.

You will note when you do this that some of the companies listed have a vast number of reviews. These reviews give consumers confidence that they can be trusted.

Building up this reputation is a key issue for any new solar company and can act as a practical barrier to entry.

Having staff with NABCEP certifications can help a lot when it comes to convincing consumers that you are a safe choice as their solar panel installation company

How will you get customers?

Obtaining new customers in the solar industry can be difficult and reports have put the cost of acquiring a new customer in the solar industry in the most vibrant solar markets at around $0.49 per watt. If you assume an average residential solar system in 6kw (6,000 watts) then this is almost $3,000 per new client.

Here is a discussion on how to tell the difference between the best solar leads and the not so good solar leads.

SolarReviews have a solar leads return calculator that calculates your returns from solar lead buying based on assumptions you enter about solar lead cost, conversion % from solar lead sources, your wholesale solar panels cost and your other direct input costs.

You will see from this calculator that even lead sources that convert 5% of leads to sales can produce excellent returns.

Generally speaking, organic solar leads sources will produce the best results in terms of conversion percentages. Here is a link to another article that helps you determine the difference between good and bad solar lead generation companies and find the best converting source of solar leads in America.

Occupational Health and safety risks

The solar industry has some special safety risks for workers because of the fact that it is dealing with both working at heights and DC electricity.

The Occupational Safety and Health Act 1970 (OSHA) establishes obligations on employers and head contractors to provides a safe workplace for employees and sub-contractors.

Specific provisions have been enacted relating to working at heights and construction generally and as solar installation is considered construction then these requirements must be followed.