How I Built My Solar Business From The Ground Up

As someone who cares deeply about the environment, starting my own solar energy business has been an advantageous experience. However, it was not without its challenges. When I first decided to dive into the solar industry, I had very little knowledge about how to run a business. But through extensive research, thoughtful planning, and tapping into the right resources, I was able to start solar business and running successfully.

In this article, I’ll provide a comprehensive guide on how I built my solar business from the ground up. I hope that my experience can help other aspiring solar entrepreneurs turn their passion into a thriving business.

Table of Contents

The Basics Of The Solar Energy Industry

Before diving headfirst into starting a solar business, it’s crucial to understand the basics of the solar energy industry. The more knowledgeable you are about solar energy and its role in the energy sector, the better positioned you’ll be in this competitive industry.

Some key things I learned about the solar energy landscape early on include:

Solar energy is the conversion of sunlight into electricity. Solar panels absorb photons from sunlight and convert them into an electric current. This electricity can then power homes and businesses and even feed into utility grids.
Solar energy is the fastest-growing energy source worldwide. Due to improving technologies and lowering costs, solar has expanded at an average annual growth rate of over 40% in recent years and is projected to continue this momentum.
The main incentive driving solar adoption is net metering. Net metering policies allow solar customers to earn bill credits for excess energy fed back to the grid, enabling customers to offset costs.
Solar can be implemented at both the utility and residential/commercial levels. Utility-scale solar farms provide solar power to the grid, while distributed generation provides energy directly for homes and businesses.
The solar value chain includes manufacturers, installers/developers, financiers, and service providers. Each plays a role in producing, deploying, funding, and maintaining solar systems.

This foundational knowledge about the solar industry gave me confidence that this business would have strong growth potential for years. The rapid expansion of solar indicated ample opportunity to stake my position.

Conducting Market Research For Your Local Area

While the nationwide solar market is flourishing, growth trends can vary drastically by state and region. Conducting thorough market research for my local area was crucial to gauging product-market fit before investing significant capital into starting my solar business.

Here are a few tips on how I approached market research:

Evaluate existing competitors

How many installers already operate locally? Are there gaps in service coverage?
What are their strengths and weaknesses? Where might you differentiate?

Assess local permitting processes.

Research the solar permitting steps for your city/county. Complex processes can create barriers.
Review any policy incentives like rebates or tax credits available in your area.

Analyze demographics and energy costs.

Areas with higher energy costs and sunlight have more significant solar savings potential.
Identify customer segments based on factors like homeownership rates and income levels.

Conduct surveys

Create online surveys to gauge consumer awareness and interest in going solar.
Ask about motivations, hesitations, and what offerings they’d like to see.

By thoroughly analyzing my local solar landscape, I could craft a business plan tailored to my market’s unique needs and opportunities. The research also showed me that launching my business in my area would be financially viable.

Choosing A Business Structure For Your Solar Company

With a solid understanding of the broader solar industry and my target market, I had to determine the proper business structure for my new venture.

As a brand new startup founder with significant growth plans, I ultimately decided that forming an S corporation was the best choice for me. Here were the key factors that went into my decision:

Liability protection – My assets are shielded from business lawsuits or debts as an S corp. This provides peace of mind.

Pass-through taxation – S corps allow income and losses to be passed through to your personal tax return, avoiding double taxation.

Access to investors – Becoming an S corporation positions you to potentially raise funds from angel investors, which fuels growth.

Credibility – Being an S corporation establishes a formal business structure from day one, which adds legitimacy when engaging with partners and customers.

While an LLC is also a valid option, the S corp structure made the most strategic sense early on. However, I’d advise all solar entrepreneurs to weigh the pros and cons of the situation carefully.

If I decide to raise larger funding rounds down the road, I may reevaluate and transition to a C corporation. But for now, being an S corporation has been the right move and provided me with what I need to scale successfully.

Crafting A Solar Business Plan

After choosing my business structure, the next critical step before launching was developing a comprehensive business plan. This involved in-depth financial modeling and concrete strategic plans to guide my execution.

Here are the key components I focused on building out in my solar business plan:

Executive summary – A high-level overview of key elements like my services, target market, and projected growth. This component is beneficial for sharing with potential investors and partners.

Company description: This is an overview of my business’ structure, mission, location, and team. It establishes credibility upfront.

Market analysis – This is a summary of my target market research, including customer profiles, competition, and market conditions.

Operations plan – This plan describes how I plan to deliver my services and install solar systems each day. It includes staffing needs, equipment/inventory requirements, and workflows.

Marketing plan – Customer acquisition and retention strategies through digital marketing, referrals, and community events.

Financial plan: Detailed financial models and projections, including startup costs, financing strategies, and forecasted revenue and expenses.

Risk assessment – An evaluation of potential risks, such as supply chain disruptions or changes to solar incentives, and how I can mitigate them.

Creating this comprehensive business plan took significant upfront effort. However, it established an invaluable strategic foundation and helped me identify any gaps in my plan while costs were still low. I view my business plan as a living document that I will revisit and adapt as my company grows.

Obtaining Proper Solar Industry Licensing and Permits

While eager to get started, I knew taking the proper legal steps early on would pay dividends in the long run. This involved obtaining all required state solar contractor licenses, registrations, and permits.

Here are some essential items to keep in mind for your regional requirements:

Contractor’s license – Most states require a contractor’s license to install solar systems. Particular solar contractor classifications exist. Make sure all employees are appropriately licensed.
Permitting – Installation permits are frequently required at the city and county level. I familiarized myself with each jurisdiction’s solar permitting process.
Insurance – Liability and workers’ compensation insurance are mandatory. Make sure your coverage levels align with your state’s minimum requirements.
Sales tax ID – You must register and collect relevant sales taxes on products and services sold. Stay current on any solar sales tax exemptions.
Business licenses – Most cities and counties require a business license to operate. Some have additional renewable energy provider licenses.

Though acquiring all the necessary licenses, registrations, and permits took time on the front end, I knew they would allow me to operate legally and protect my business. Don’t let the bureaucracy discourage you from pursuing your dream!

Building My Solar Team and Hiring Employees

With the legalities covered, I focused on building a solid team to help deliver top-tier solar installations and services. Given my limited resources, hiring strategically was critical as a startup founder.

Here are some lessons I learned about staffing up a new solar business:

Bring on a knowledgeable solar designer to assess site conditions and design flawless system layouts early.
Hire licensed, meticulous installers who take pride in their work. Skills are more valuable than prior solar experience alone.
Your first salesperson should believe strongly in your mission and be excellent at building authentic customer relationships.
A strong operations manager can optimize processes as you scale. Look for someone highly organized.
Outsource accounting/bookkeeping at first until you can justify a full-time finance hire.
Prioritize hiring people eager to learn and grow as the company does. We shared that vision matters.

As my first hire, I hired a lead installer, designer, and sales associate. This gave me the core team needed to deliver end-to-end customer experiences while keeping payroll in check. After establishing scalable processes, I’ll continue expanding my solar squad strategically.

Investing in the Right Solar Software Tools

As an ambitious new entrepreneur, I was eager to find technology solutions to streamline my operations and minimize costs.

Solar design software – Tools like Aurora Solar have been invaluable for creating system designs, energy models, and proposals. This enables me to customize plans faster.

Project management software – I use PM software like Basecamp to schedule projects efficiently, collaborate with my team, and keep customers updated.

Accounting software: QuickBooks has been instrumental in tracking finances, processing payroll, sending invoices, and performing other accounting tasks in one centralized platform.

CRM software – I use a solar-focused CRM like SolarLeadFactory or JobNimbus to manage leads, customers, and long-term growth.

Monitoring platform – Solutions like AlsoEnergy allow me to track system performance remotely to address any issues proactively.

Digital tools – I leverage tools like WordPress, Hootsuite, and MailChimp for my website, social media, and digital marketing.

While it required some upfront investment, implementing these solar-specific software platforms has allowed me to scale up efficiently with less administrative burden. I’m able to focus on delivering excellent service instead of manual busywork.

Financing Your New Solar Business

As many aspiring solar entrepreneurs know, launching and growing a new business requires significant capital. After making my initial personal investment, I explored financing strategies to take my company to the next level without taking excessive risk.

Here are some practical funding approaches I utilized as a start-up solar provider:

Business loans – I qualified for small business loans/lines of credit I could access for inventory, equipment, or operating costs as needed.

Equipment leasing – Leasing options from solar distributors helped deploy systems without massive equipment purchases.

Vendor credit – Securing extended credit terms from suppliers provided flexibility in carrying inventory.

Personal loans – Within reason, I leveraged some individual loans/0% credit cards for essential startup costs.

SBA loans – Once established, I could pursue SBA 7(a), 504, or microloans at favorable terms with the government guarantee.

Crowdfunding – After building a customer base, crowdfunding could fundraise from supporters.

Angel investors – Eventually, I could pitch angel investors for capital injections to support expansion.

By diversifying my financing sources, I was able to fund growth responsibly. With proper planning, securing startup solar capital is very feasible. Lean on your resources and get creative!

Differentiating Your Solar Brand in a Competitive Market

Establishing a strong brand presence that sets you apart from competitors is critical – especially as a new solar company. Rather than compete on price alone, I focused on differentiating my business across three key pillars:

Stellar customer service – I built my brand around providing exceptional education, communication, and support throughout the solar journey – from inquiry to installation.

Demonstrated expertise – By consistently delivering complex, custom projects flawlessly and highlighting our expertise, I could stand out from less experienced installers.

Community involvement – From sponsoring local causes to participating in renewable energy advocacy, I aim for deep local community engagement.

Mission-driven ethos – As a B-Corp, our underlying social and environmental mission is woven throughout our brand voice and customer experience.

Referral rewards – My killer referral program rewards customers for spreading the word about our solar service. This amplifies word-of-mouth.

Rather than competing solely on price or flashy ads, I focused on building genuine relationships and consistently delivering five-star experiences. By staying laser-focused on differentiation and brand building from day one, I gained a competitive edge.

Using Digital Marketing To Drive Solar Leads

As a self-funded startup, I had a minimal marketing budget. This forced me to take a strategic, cost-effective approach to digital marketing and lead generation. Through testing and optimization, I developed a digital marketing blueprint to drive targeted solar inquiries.

Some effective tactics that delivered results include:

Search Engine Optimization – I optimized my website for local keyword searches like “Boston solar installer” to improve visibility. This drove organic traffic.
Content marketing – Creating long-form blog content like “Beginner’s Guide to Going Solar in Denver” helped attract and convert readers.
Social media – Maintaining an active presence and running targeted Facebook ads expanded my reach online.
Retargeting ads – Remarketing to website visitors with ads across Google and Facebook encouraged returning users to convert.
Calls-to-action – Prominent email signup boxes, chatbots, and click-to-calls spurred potential customers to contact me directly.
Reviews and referrals – Optimizing my Google My Business listing with positive reviews built credibility with local searchers.
Paid web directory listings – Listing my company on specialized solar directories drove targeted calls and web leads each month.

Starting on day one, executing this comprehensive digital strategy helped me attract and convert high-intent solar leads without breaking the bank. Our website generated over $1 million in revenue in my first year alone.

Offering Creative Solar Financing Options

One of the most significant barriers to homeowner adoption is the high upfront cost of solar installations. To expand my market reach, I needed to offer creative financing options right out of the gate.

Some effective financing models I offered customers early on include:

Solar loans – Low-interest loans covering system costs allowed customers to go solar with predictable monthly payments. I partnered with solar loan providers to simplify financing for customers.
Solar leases: Customers pay an affordable monthly lease for power without purchasing panels. I was responsible for maintenance and performance.
Power purchasing agreements (PPAs)- These money-saving PPAs enabled customers to host systems at no cost and purchase discounted energy from my company.
Home equity – Tapping into home equity via HELOCs or cash-out refinancing allowed homeowners to go solar while unlocking their home value.
Federal Tax Credit – The 26% ITC reduced costs significantly. It could also be applied to any loans or leases. I made sure customers maximized this incentive.

Thanks to these financing tools, cost became less of a prohibitive factor for prospective customers. I was able to cater to a variety of budgets and preferences.

Embracing Referrals and Word-of-Mouth Marketing

In a competitive market, generating leads through paid channels alone can be challenging and expensive over the long term. From day one, I embraced referrals and word-of-mouth marketing to drive organic leads and build credibility through trusted networks.

Some ways I amplified word-of-mouth for my solar business include:

Referral program – I offered existing customers significant incentives for each new customer referral. This gave them a reason to spread the word.
Partnership referrals – I partnered with solar-friendly vendors who could refer buyers interested in complementary home upgrades like EV chargers.
5-star reviews – I asked happy customers for online reviews. Positive testimonials build trust and social proof.
Case studies – With permission, I created case studies about local customers. This helped demonstrate my services and expertise.
Community networking – I leveraged local business groups, associations, and non-profits to organically network with potential customers.
Press outreach – Securing press coverage of exciting projects expanded my exposure beyond digital channels.

While scaling referral marketing took continual effort, it ultimately became one of my most valuable sources of new business as my reputation grew. The leads had very high conversion rates since they were pre-qualified.

Staying On Top Of The Latest Solar Technologies and Products

Because solar technology rapidly advances year after year, staying on top of the latest product developments has been paramount. Keeping my finger on the pulse allows me to offer customers cutting-edge systems consistently.

Here are some of the tactics I used to stay current:

Regularly attend major industry trade shows like Intersolar to see new solar tech and innovations firsthand. Take lots of notes!
Maintain an active membership in solar associations and groups like SEIA to receive important industry news and training.
Subscribe to solar publications and podcasts, such as PV Magazine, Canary Media, and The Interchange, to get weekly insights.
Follow key solar manufacturers on social media to learn about new panel and equipment models as soon as they launch.
Track renewable energy blogs and news aggregators like Solar Power World for breaking product releases and market analysis.
Join manufacturer partner programs to gain access to special product training and preview upcoming solutions.
Attend webinars and virtual events on cutting-edge topics like battery storage technology and intelligent energy management.
Set Google News alerts for relevant solar keywords so intriguing articles land in my inbox automatically.

While staying current with solar tech takes time, it ensures I can always equip customers with the smartest systems that align with their needs and budget.

Capitalizing on Incentives and Solar Policy Trends

Solar incentives and energy policies at the federal, state, and local levels have always been significant catalysts for the adoption of residential and commercial solar power.

Federal Solar Tax Credit – The 26% federal ITC through 2032 lowers system costs substantially. I helped customers maximize this money-saving benefit.
State/local rebates and tax credits – I monitored state and city solar incentives, then highlighted rebates/credits available to customers in their area. These provide additional savings.
Net metering – I thoroughly explained the value of net metering programs, which allow solar customers to get credited for excess power sent to the grid. This offsets their utility bills.
Solar Renewable Energy Certificates (SRECs) – I helped customers monetize and sell their solar certificates to generate additional revenues in SREC markets.
Favorable rate structures – Some utilities offered extra perks like preferential time-of-use rates for solar customers. I marketed those opportunities.
Community solar – I connected them with local community solar farms for renters or properties unsuitable for solar, so they could still access solar savings.
Solar mandates – As cities and states enacted solar building mandates, I positioned myself as the expert to help builders navigate new requirements.
Policy advocacy: I supported groups advocating for expanded solar access locally. Getting involved amplifies my brand and benefits everyone.

Keeping incentives top of mind and learning to navigate complex policy issues paid dividends. With the right incentives, I could strengthen the financial case for customers to choose solar.

Developing Local Partnerships For Growth

Forming win-win partnerships with other local companies helped expand my reach while providing value to aligned businesses. Seeking out these strategic alliances provided benefits beyond lead referrals and visibility.

Some impactful types of solar partnerships I cultivated include:

Roofers – Teaming up with roofing companies provided leads for reroof-solar projects and roof system expertise.
HVAC pros – AC partners benefited from solar’s ability to offset electric bills from cooling and heating.
Electricians – They could handle ancillary electrical work and provide valued electrical know-how.
Home builders – Building solar into new construction allowed builders to differentiate while I acquired customers early on.
Wholesale suppliers – Partnerships with solar equipment suppliers provided pricing leverage and inventory reliability.
Billing integration – Joint offerings with energy software companies like Powerley integrated solar monitoring and utility bill management.
EV companies – Referrals flowed with electric vehicle providers as solar complements EV charging.

Building out this “solar ecosystem” of strategic alliances provided reciprocal growth opportunities while allowing me to focus on my core strengths. Successful partnerships are a win-win.

Preparing For Long-Term Solar Maintenance and Service

While sourcing new solar clients was my initial priority, I knew maintaining systems and providing ongoing service would become crucial for long-term success. Solar arrays require care and attention over their 25+ year lifespan.

Some keys to preparing for long-term maintenance include:

Institute detailed system monitoring with alert notifications to avoid performance issues or faults.
Maintain a large inventory of spare parts and supplies for repairs and maintenance needs as systems age.
Continuously train technicians on proper O&M procedures for existing and emerging technologies so skills are up-to-date.
Provide flexible service plans/warranties so customers have coverage options for repairs and optimizer replacements over decades.
Set clear policies on maintenance fees or charges so customer expectations are managed.
To maximize uptime, focus on periodically auditing and inspecting systems, not just responding to problems.
Build strong relationships so customers view you as a trusted energy advisor over the long haul.

While the installation represented the initial revenue opportunity, outstanding long-term service kept customers loyal and empowered word-of-mouth referrals.

Creating Long-Term Value For Your Solar Customers

At the heart of building an enduring solar business is a passion for helping customers throughout their renewable energy transition. While technologies will change, creating long-term value should remain the priority.

Here are a few principles I focused on to foster lifetime relationships:

Treat each customer with respect, integrity, and honesty, from the first call through system maintenance years later.
Maintain absolute transparency about pricing, financing, incentives, and everything that impacts their investment. No surprises.
Customize proposals to meet their specific financial goals and energy needs rather than take a one-size-fits-all approach.
Educate them thoroughly on how solar works so they feel empowered. Share your expertise freely.
Build open communication channels they can rely on, from email to social media to old-fashioned phone calls.
When issues eventually arise, own them fully and solve problems promptly. Never leave a customer hanging.
Seek regular customer feedback so you can continuously improve. Nurture these relationships over decades.

By always putting customers first and delivering unmatched value, I earned their trust and loyalty for the long haul. Never lose sight of what matters most!

Key Takeaways on Starting a Solar Business

While launching a solar company requires extensive planning, passion, and grit, the impact you can make motivates perseverance. If launching a solar business is your dream, soak up lessons from those who have come before you. Let my experience guide you on the obstacles to expect, and know that success is very attainable.

Some of the key takeaways from my journey include:

Immerse yourself in industry knowledge and conduct in-depth local market research before diving in. Homework pays off.
Choose a formal business structure like an LLC or Corporation to protect your assets immediately.
Build a rock-solid business plan covering operations, marketing, financing, and projections to align your efforts.
Surround yourself with a talented team to complement your strengths and support scaling.
Implement solar-specific software tools that can streamline processes so you focus on service, not administration.
Explore a mix of financing sources like loans, credit, and leasing to fund your startup journey and equipment purchases.
Differentiate your brand by delivering remarkable customer experiences, standing by your work, and giving back to the community.
Use digital marketing and customer referrals together to attract and convert solar buyers cost-effectively.
Stay eager to innovate and adopt the latest solar advancements to create customer value.
Advocate for policies that expand access to solar so the pie grows for everyone.
Forge local partnerships that provide lead flow and allow you to focus on your niche.
Prepare for the long haul by investing in service capabilities to support systems for decades.

Blazing your entrepreneurial trail is never easy but immensely gratifying if your mission is clear. I wish you nothing but success if you choose this path. Our clean energy future will depend on it.

Now let’s look at some frequently asked questions about starting a solar business:

FAQs

What are the first steps to start a solar business?

The first steps are researching your local solar market deeply, choosing a solid business structure, and developing a comprehensive business plan covering operations, financing, hiring, and growth plans. Handle licensing and permitting requirements early as well.

How much does it cost to start a solar installation business?

Startup costs vary greatly, but plan for at least $50,000 – $100,000 to cover expenses like inventory, equipment, licensing, insurance, marketing, payroll, and other overhead when launching. Scale-up costs are significantly higher. Leverage loans and financing strategies carefully.

What skills do I need to start a solar company?

Essential skills include sales, customer service, project management, roofing/electrical expertise, leadership, finance, and entrepreneurial vision. Surround yourself with a talented team and advisors who complement your strengths.

How do I find customers as a new solar installer?

Digital marketing, networking, partnerships, and asking current customers for referrals are all effective ways to build your customer pipeline. Focus on delivering 5-star service so happy customers drive word-of-mouth referrals.

Should I buy or lease solar panels for my business?

Buying your equipment outright provides the most long-term value if cash flow permits. However, equipment leasing and vendor financing can also be attractive options for conserving capital in the early days of your startup.

Conclusion

Starting a solar business has been one of the most rewarding experiences of my career. While launching and growing a company in a highly technical industry certainly has challenges, the impact renewable energy can create inspires me daily. I sincerely hope this comprehensive guide on my solar entrepreneurship journey provides helpful insights to fellow founders passionate about powering the world with clean energy, emphasizing the significance of identifying market growth opportunities and uncovering hidden business prospects, as small, consistent steps in this pursuit will compound over time.With grit and purpose, you can turn your aspirations into reality. I wish all solar entrepreneurs nothing but success!

Tags: business development, entrepreneurship, green technology, renewable energy, small business growth, solar business, solar industry, startup journey, success story, sustainable living