It’s exciting to finally lay down the formula or start your solar energy business. Solar energy has been enjoying popularity in the last few decades, and learning how to start a solar panel installation business should be on the top of every investor’s mind.
The US Federal Government has already waived taxation on imported solar panels by 10%- 30% to encourage green power. By 2021, the number of installed solar panels in America had already surpassed 2.4 million.
You can already tap into the benefits of a solar installation start-up and build your brand before the market is saturated. Here’s the process of starting a solar panel installation business
Choose your target market well.
When starting literally any business, you have to understand your audience well. Look at problems in the selected market and seek out to solve them. For instance, you can decide on the location within which your business will operate. Or, you can choose to offer home or commercial installations.
When studying the market for your solar energy start-up, answer the following questions:
- Who are your target customers?
- What are the demographics of the area in which you operate?
- Who are your main competitors?
- What is the value system of your target? Are they receptive to solar energy?
Come up with the brand name
Ever wondered why Coca-Cola clocks your mind whenever you think about soda? It’s because the brand name is creatively and psychologically intertwined with the business. The name Amazon suggests a massive forest with lots of flora and fauna in it- and the online shop offers much more!
So, sit up and come up with a company name that’s salient to your brand. Of course, we’d advise you not to use your own name- unless you’re popular enough to rake in customers. Establish a clear branding strategy that would give you a headstart in the competition.
Your solar energy brand should be:
- Easy to spell and pronounce
- Give your business room for expansion
- Synonymous with your objectives and niche
- Catchy and sticky
- Connect emotionally with your potential customers
- Means something good
Write up your solar panel business plan
A business plan is one of the entrepreneurs’ most underrated documents. It forms the backbone of your startup, and; it contains the route to all the short and long-term goals. It also lays down a roadmap to how you’ll achieve these objectives.
A good business plan can attract potential investors because they associate themselves with entrepreneurs who are well organized. And, knee-deep into running the startup, you’ll use the business plan to make wise strategic business decisions.
When writing the solar installation business plan:
- Keep it short and concise
- Study your audience and write in the vernacular of that specific target
- Test your business plan and idea thoroughly.
- Come up with clear goals and objectives.
- Determine how to run your new solar energy start-up
Get the paperwork ready
Seek to run your business professionally and as per the law. Register your company; get a license and a business permit.
Some jurisdictions may require you to have an electrical contractor’s license or a general building contractor. The laws of your state and your business structure will determine how you register your solar startup.
Extra tips for registering your solar business
- Find out if you have to register the business in your jurisdiction
- Get an attorney to draft the memoranda for your solar company
- Get a business tax ID
- Register and patent your brand name
Find trustworthy suppliers
Invest in high-quality operating equipment that will guarantee value and attract respect for your brand. Use advanced technology to minimize the costs and time of installation. Get vans and trucks to transport your equipment and team, too.
Also, you may partner with established engineering firms to provide the designs, or you can hire a full-time engineer to handle that.
Then, get a good supplier of high-quality solar panels and inverters. Be sure to work with the best versions of mounting equipment at a fair price.
Consider the following tips for selecting a good supplier for your solar business:
- Location of the supplier
- Value for money
- The pricing
- Quality of panels and mounting equipment
- Reliability and responsiveness
- Their stability and level of experience
Come up with sensible pricing
A study by the University of Minnesota shows how successful businesses always set a comprehensive pricing strategy before placing their products on the shelves.
Many companies are investing in solar products and continually making the market more competitive. If you charge too much, you will discourage potential clients.
When your price is too low, you’ll make them think you’re offering low-quality services. And, a price that is too low, you might soon run into debt and out of business.
You have to come up with a price that attracts customers without eating up your profits. Know what the other companies are charging and calculate a price that takes into consideration all market parameters.
Your pricing formula should consider the costs you incur when offering solar installation services, market price, and the value you provide. Striking a balance will make your product competitive, and you’ll easily sail through the competitive market.
Ideally, provide a quote and charge individual customers as per their situations. A residential solar installation may cost somewhere between $2000 and $3000, while the commercial setting could even exceed $10,000.
How to get the solar installation pricing right:
- Let the customers pick their favorite package
- Offer different versions of a product
- Offer quotes to customize the solar system according to your client’s individual needs
- Let the price capture value
- Avoid discounts that don’t guarantee future premiums
Get the capital for your new solar panel business
The Entrepreneur Magazine reports that more than 80% of businesses fail due to financial challenges, and you don’t want to join them.
Use your business plan and strategy to calculate the capital you need to fire up your business. Weigh the capital in terms of solar panel and installation accessories, transport, labor, and ads.
So, how much does a solar energy startup cost? The total capital you need to start your solar power business ranges between $90,000 and $290,000, depending on the startup’s location and size.
You can dig into your savings to start the business, but you can also finance the project through loans. Several banks and financial institutions are eager to take your loan proposal.
Once you get all the finances right, you can now procure all equipment and paraphernalia you require. Then, establish your business by marketing the new product.
To finance your solar power business, you can:
- Get a grant
- Approach angel investors
- Go for microfinance loaners instead of the big banks
- Get some from your savings
- Talk to friends and family
- approach pro-green power special interest groups that finance solar businesses
If there’s one thing that sets successful companies apart, it is hiring top crème employees. Surrounding yourself with the best solar experts will rocket you to dine with the industry’s best!
Reports by Business Insider indicate that successful startups hire a minimum of five staff members. You need an engineer or technician for the fieldwork, marketers and accountants.
Forming a good team of employees requires some great skills in vetting. Your candidates must show a positive attitude toward your goals. Verify their work experiences and academic certifications especially for the solar installation crew.
Tips for hiring top crème team members:
- Come up with a thoughtful recruitment strategy
- Write up a hiring checklist
- Review the credentials thoroughly
- Target a wider selection of specific skills needed in your solar business
- Embrace social media and digital hiring
- Find a person whose personality and skills fit the job description
Marketing your new solar panel installation brand
By the time you start your solar business, you’re possibly the only one who knows about it. But, it’s time to take it to your customers!
Marketing is both concrete and abstract- you must build an allure and legend around your brand. Then, employ strategies that will make people know and trust your business name.
Today, social media is proving to be the most effective way to market your brand HubSpot reports that 57% of startups have found clients through social media marketing.
Promote your solar business by:
- printing out branded promotional materials
- search engine optimization for your website
- have a proven digital marketing strategy
- peer-to-peer advertisement
- paid targeted ads on high-traffic platforms
- developing and maintaining a website
- sponsor events
- creating a logo and branding
- nurturing and maintaining loyal customers
For Further Reading: How to Sell Solar Panels Like Pro?
FAQs about Solar Panel Installation Business
Who needs to start up a solar panel business?
Solar power is becoming fashionable, and a large number of people want to buy from green companies. Many companies want to stand out as an eco-friendly entity, and you can tap into this potential.
Why should I start a solar panel business?
The solar panel installation business is a long-term investment that will pay off handsomely. Then, solar energy gives people control over their energy supply. The customers are likely to come back.
How much profit do solar companies make?
Solar power companies make money depending on the number and size of projects they handle. In most cases, a single project yields a profit of about $5000 to $10000.
How would I start my solar panel business franchise?
Find a good business opportunity, and then talk to the franchiser. Here, the advertisement and management costs are on the brand owner. You only have to offer services in accordance with the license.