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What Should You Consider Before Starting a Solar Installation Business?

As more and more people turn to solar energy as an environment and wallet-friendly alternative to traditional energy, there is an increased demand for licensed professionals who can install and maintain their panels and storage systems. If you want to work in an industry that aligns you with emerging tech and sustainable practices, solar installation is perfect for you.

While the growing interest in solar energy is promising for any installation business, you will need to find ways to stay on top of the industry’s practices, consider customer concerns, and manage your business’s operations well to rise above your competitors. Keep reading for some information that might help you as you get started.

Why choose solar installation?

Before you get down to business, you’ll need to determine if solar installation is right for you. There are plenty of other skilled trade careers–what makes solar installation different?

An Industry with a Future

First, solar energy is a farsighted industry. The U.S. Energy Information Administration projects that renewable energy sources–like hydroelectric, wind, and solar power will make up approximately 40% of the country’s electricity generation by 2050. Getting in on the ground floor will allow you to establish a solid business that will eventually be even more marketable when solar energy becomes the new standard.

Many people and organizations are contributing to the effort to be less dependent on fossil fuels. One reason is that our current commercial energy system is based on supply and demand, allowing for fluctuating rates and unpredictable changes in the market. The other primary issue is that the emissions from burning fossil fuels are harmful to the environment, causing governments to crack down on its usage and monitor its ill effects.

Finally, solar energy is more viable and accessible than any other renewable energy sources. Hydroelectricity and wind power are not suitable for every area, whereas solar panels only require exposure to sunlight and can be installed anywhere. With new tech developing all the time, solar energy is even more flexible than ever before.

Emerging Tech

In comparison with traditional trade careers, solar installation sees a lot of new and exciting tech advances. Solar technology is becoming more efficient all the time, allowing solar installers to get familiar with each new iteration and its new capabilities.

For instance, there are three main types of solar panels:

  • Monocrystalline panels are the most high-efficiency option. As a result, it is also the highest cost option.
  • Polycrystalline panels are a middle-of-the-road choice. Due to their simpler manufacturing process, they are less expensive than monocrystalline panels.
  • Thin-film panels are the most variable option. There are different kinds of thin-film panels, but they are all thinner and more low profile than the previous two types. They can also be the most cost-effective to manufacture and install.

While installers and customers can decide which type of panels would be best for particular applications, it’s amazing to think of the options available to the average consumer. Whether you are serving private or commercial clients, solar energy has never been more accessible. Solar energy panels are decreasing in price as they become more widely used, allowing for more and more consumers to take advantage of new tech and provide you with more business.

Tax Incentives

Local, state, and federal governments are rewarding consumers who support the switch over to renewable energy with tax incentives and financing programs. As a business owner, you will need to familiarize yourself with the available benefits and convey that information to your customers. Not only will your customers be grateful for your informative service, but it could also help you land sales and contracts.

Here are some facts about the U. S. federal solar power tax credit:

  • If a homeowner qualifies, the cost of their solar power system can be reduced by 22% as of 2021.
  • There’s a rollover feature that allows you to utilize any unused portion of the 22% tax credit in future years.
  • There’s a “sunset date” that the solar work has to be completed by for the homeowners to receive any tax credit.

In addition to the federal incentives, some states have their own tax benefits for solar work. Be sure to study up on the laws in the state that you’re operating in and educate your clients so they can take full advantage of these programs.

Licensing Requirements

Like many other trade careers, there are state-by-state licensing requirements for solar installers. At the very least, you need on-site training to work in the field.

In many states, you don’t need any dedicated solar technician certification to install a panel system. These include Alaska, Arkansas, Georgia, Illinois, Indiana, Iowa, Kansas, Mississippi, Montana, Nebraska, North Dakota, Oklahoma, Oregon, and Wisconsin.

In some cases, you may need to be certified in another field to perform solar installation work or be assisted by a licensed professional.

Here are those states and their requirements:

  • Kentucky and Maryland require a licensed electrician for some aspects of the process, but the actual installer doesn’t need a license.
  • Maine, Massachusetts, New Hampshire, North Carolina, South Dakota, Tennessee, Texas, Washington, West Virginia, and Wyoming require an electrical license to install solar panels.
  • Nevada, New Mexico, Ohio, Rhode Island, and Utah require state contractor licenses.
  • Some states, like Colorado, Michigan, and Missouri, follow different rules. There are county-specific licensing requirements in Colorado and Missouri, while Michigan requires its own state-specific certification.

Some states have more stringent licensing requirements. State governments rely on a couple of primary licensing agencies, namely the North American Board of Certified Energy Practitioners (NABCEP) and the Solar Rating Certification Corporation (SRCC), to certify local contractors.

Here is a list of the states that require certification along with their preferred agencies:

  • Alabama requires NABCEP or SRCC certification.
  • Arizona requires solar contractor certification but doesn’t specify an agency.
  • California requires a state solar contractor license or an A/B general building contractor license on top of education.
  • Connecticut requires any solar installation business to have at least one NABCEP certified employee and a PV-1 or E-1 licensed contractor.
  • Delaware law states that a NABCEP certification is preferred to qualify for rebates.
  • Florida requires a solar contractor license.
  • Hawaii requires a solar energy systems contractor license.
  • Idaho requires certification from NABCEP or a similar agency, as well as an Idaho photovoltaic license.
  • Louisiana requires a license from an approved agency
  • New York requires NABCEP certification or special training.
  • Pennsylvania requires certification from NABCEP or another approved agency.
  • Vermont requires a solar partnership.
  • Virginia requires alternative energy systems certification.

Check your state government’s website for all of the details regarding licensing and certification so you can be properly prepared to start contracting and build your business.

How do you get started?

If you’ve studied up on the above factors and feel that solar installation is right for you, your next step is to develop a business plan. For a growing industry like solar energy, you’ll need to make smart choices to outcompete other contractors and set yourself up for long-term success.

Research Your Market

Now that you know a bit of background on the industry, you’ll need to narrow your focus and start researching your local market. While solar installation is a smart choice for a new contracting business due to increasing interest in alternative energy, there will be plenty of other contractors hoping to serve the same area that you’re based in. You’ll need to find ways to stick out and show clients that your business is the superior option.

To do this, look up other nearby solar installation businesses online. Read what their clients are saying about their pricing, performance, and customer service. As you develop your business model, think about the feedback that other businesses’ clients are providing them and use those tips to your advantage. As with any other business, you’ll succeed if you can fill a gap or solve a problem that customers have identified with their local providers.

Further, use other businesses to determine your target audience. Perhaps the businesses in your area tend to market more heavily toward commercial clients. In that case, you may want to center your business platform around serving homeowners and residential clients. This way, you could have less direct competition and specialize your services to better serve your chosen client base.

Service Specialization & Strategic Marketing

On that note, you may want to specialize in a particular service to stand out to your clients. Within a sea of contractors, you have to find ways to differentiate your business from your competitors and highlight your best services at the same time. You can do this by finding a niche within the solar installation field.

For instance, you may want to market solar ground mount installations as your featured service over the more familiar roof mounts. Why? Maybe you live in a more rural area and there is ample space for ground mounts, which are easier to align for maximum sun exposure. You could develop a marketing campaign that educates potential clients on this type of mount to encourage them to contract your business for this service.

Alternatively, you could advertise roof mount setups for clients in closer-knit residential areas who still want to get on board with renewable energy. Know how to appeal to your target audience based on location, comparable offerings, and appropriate tech for their space. If you find a niche that serves you well, you can become the area’s leading provider for that particular service.

Find Reliable Suppliers & Necessary Equipment

After you get an idea of which services you’d like to center your business around, you’ll need to get a hold of the correct tech supplies and machinery to complete your contract projects. As your business grows and you take on more and more projects, you’ll want to develop a positive relationship with a reputable supplier to ensure that you always have the appropriate materials to serve your clients.

Solar energy tech is relatively new and it’s changing all the time, so knowing which products and vendors are best will depend on customer experiences and upfront benefits. Aim to work with suppliers who display testimonials and reviews from other customers, clearly represent their product stats, and offer promising warranties.

Further, you’ll want to ensure that your business has all of the typical contracting equipment needed to pull off large-scale jobs like panel installations. You’ll need to invest in expensive machinery and tools to do your job right, so try to make responsible choices in other areas. For instance, you can rent commercial trucks to transport materials and workers rather than buy them. This will allow you to save on some maintenance costs while maximizing your productivity.

Hire Qualified Employees

Next, you’ll need to hire qualified, hard-working employees to help you realize your vision for your business. Remember to keep the outlined licensing requirements in mind when you take on new workers and ensure that everyone on your team is properly trained.

Since solar energy is a younger and more adaptive industry than most other trades, your job as an employer is even more complicated. You’ll need to get new workers up to speed with constantly changing tech and installation practices, educate them on industry standards, and stress product maintenance more than you might in other specialized construction fields.

While this could be a heavy burden on a business owner, you’re training a new crop of workers who will help make the larger switch over to renewable energy happen in the long run. You and your business are laying the groundwork for some very important changes.

The value and promise of the solar energy industry make solar installation a wise choice for your new business. The proximity to new tech, options for specialization, and compelling tax benefits for clients make it a rigorous and rewarding field of work.

 As long as you stay on top of licensing requirements and reliable sourcing, solar installation offers opportunities for you to serve your clients and the environment while growing a business with limitless potential for growth.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

About the author

Alice Instone-Brewer

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