How to start a solar company: your launch plan

Starting a solar company is a rewarding venture that combines technical know-how with sharp business savvy. The industry is valued at tens of billions of dollars, driven by steady demand for solar installations across residential, commercial, and agricultural sectors.

This guide will take you through the practical steps of validating your business concept, securing funding, and obtaining the necessary licenses to help you launch a successful solar company in the U.S.

Step 1: Validate your business plan

Start by researching your local market. Use the Solar Energy Industries Association (SEIA) and National Renewable Energy Laboratory (NREL) websites for national and state-level trends. For hyper-local data, check your county’s permit office records to see the volume and type of solar installations.

With that data, you can analyze direct competitors. Use Google Maps and local directories to find other solar installers in your area. Note their services, customer reviews, and service areas. This helps you find a gap in the market you can fill.

Estimate your startup costs

Initial capital is a significant consideration. Expect to invest between $50,000 and $90,000. This covers essential tools and safety gear ($15,000-$30,000), a reliable work vehicle ($25,000-$45,000), and initial insurance premiums ($5,000-$10,000).

Many new owners make the mistake of buying cheap equipment, which often backfires with breakdowns and project delays. Invest in quality from the start. Also, factor in about $1,000 to $3,000 for certifications like those from NABCEP.

Here are 3 immediate steps to take:

• Research solar installation permits issued in your county over the last 12 months.
• Create a list of five local competitors and document their primary services and customer ratings.
• Draft a startup budget with line items for equipment, a vehicle, and insurance.

Step 2: Establish your legal entity and secure licenses

Most new solar businesses register as a Limited Liability Company (LLC). This structure protects your personal assets from business debts and allows profits to pass directly to you without double taxation. You can file for an LLC through your state’s Secretary of State website.

Navigate licensing and permits

With your business entity formed, your next focus is licensing. Requirements vary by state. Many states require a general contractor license, while others, like California, have a specific C-46 Solar Contractor license. Check your state’s contractor licensing board for details.

For each installation, you will need to pull electrical and building permits from the local Authority Having Jurisdiction (AHJ). These typically cost between $400 and $600 per project and can take two to six weeks for approval. A frequent hurdle is underestimating these timelines, so build a buffer into your project schedules.

Here are 3 immediate steps to take:

• File for an LLC with your Secretary of State.
• Check your state contractor board’s website for solar licensing rules.
• Contact your local building department to confirm permit fees and average wait times.

Step 3: Secure insurance and manage risk

Protect your business with the right coverage

You will need several policies to operate safely. General liability insurance, typically with $1 million to $2 million in coverage, is the foundation. It protects against third-party property damage and injuries. Also plan for commercial auto insurance for your work vehicle.

As you grow, add professional liability for design errors and workers’ compensation as soon as you hire your first employee. Annual premiums for a comprehensive package often range from $5,000 to $12,000, so it is smart to budget for this expense from day one.

You might want to work with insurers who know the solar industry, like The Hartford, Hiscox, or Next Insurance. They understand specific risks, such as accidental roof damage during installation or electrical faults, which a general agent might overlook in a policy.

Many new owners select the cheapest policy, only to find it has gaps. For example, your policy might not cover damage to expensive panels during transport. A specialist agent will help you avoid these gaps and ensure your coverage is complete.

Here are 3 immediate steps to take:

• Request quotes for a $1 million general liability policy from three different insurers.
• Ask potential providers about their experience covering solar installation contractors.
• Make a list of job-site risks, like falls or equipment damage, to review with an agent.

Step 4: Set up your workspace and buy equipment

You do not need a large office at first. Look for a small commercial or light industrial space, around 500 to 1,500 square feet. This gives you room for a desk and secure storage for panels and gear. A cheap lease is no bargain if your truck cannot easily load panels.

When you talk to landlords, ask for a shorter lease term, like one to two years. This provides flexibility as you grow. Also, confirm you can make minor modifications, like installing shelving for inventory management. Good vehicle access is a must-have.

Gear up for the job

Quality equipment prevents costly delays. Budget for a fall protection kit ($200-$400), a 32-foot extension ladder ($300-$500), and a professional-grade drill set ($250+). You will also need solar-specific items like a conduit bender and wire strippers.

You can source this gear from solar distributors like Greentech Renewables or BayWa r.e. They can bundle tools with panel orders. This is often more efficient than making separate trips to a hardware store, as they know what a new installer needs for a typical job.

Here are 3 immediate steps to take:

• Identify two potential locations with commercial zoning and good vehicle access.
• Price out a complete equipment kit from a solar distributor.
• Ask a potential landlord about their policy on a 1-2 year lease.

Step 5: Set up your payment processing

Define your payment structure

Establish clear payment terms in your client contracts. A common solar industry model is a three-part payment: 10% at signing, 50% upon equipment delivery, and the final 40% after the system passes inspection. This structure helps manage your cash flow throughout the project.

When you choose a payment solution, look closely at the fees. Many processors charge 2.5% to 3.5% per transaction, plus monthly fees and hardware costs. These expenses can add up quickly and eat into your profit margins, especially on large projects.

For solar companies that need to accept payments on-site, JIM offers a streamlined solution. With JIM, you can accept debit, credit, and digital wallets directly through your smartphone. Just tap and the payment is done. It is particularly useful for collecting deposits immediately after a client signs a contract.

At just 1.99% per transaction with no hidden costs or extra hardware needed, it presents a clear advantage. Your money is available on your JIM card as soon as the sale is complete, which removes the wait for bank transfers.

• Get Started: Download the JIM app for iOS.
• Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
• Access Funds: Your money is available right on your JIM card as soon as the sale is done.

Here are 3 immediate steps to take:

• Draft your standard payment terms for client contracts.
• Calculate the potential savings of a 1.99% flat rate versus a 2.9% + $0.30 fee on a typical deposit.
• Outline a script for explaining your payment process to a new customer.

Step 6: Secure funding and manage your finances

Find the right funding sources

The SBA 7(a) loan is a popular choice for new solar businesses. You can often secure $50,000 to $150,000 with a solid business plan and a credit score over 680. Interest rates typically range from Prime + 2.75% to 4.75%.

Also, look into programs like the USDA’s Rural Energy for America Program (REAP). It offers grants and loan guarantees for renewable energy projects in eligible rural areas. Equipment financing through your distributor is another direct route to get your gear without a large upfront cash payment.

Manage your working capital

Plan to have at least $20,000 to $40,000 in working capital for your first six months. This buffer covers payroll, fuel, and marketing before payments from initial projects arrive. Many new owners get into trouble by not accounting for payment delays.

Remember that permit approvals can take weeks, holding up your final 40% payment. Having enough cash on hand prevents this common hurdle from stalling your entire operation. It gives you the breathing room to manage project timelines without financial stress.

Here are 3 immediate steps to take:

• Review the SBA 7(a) loan requirements on the official SBA website.
• Check your eligibility for the USDA REAP program if you serve rural areas.
• Calculate your estimated operating expenses for the first six months to determine your working capital needs.

Step 7: Hire your team and set up operations

Build a qualified crew

Your first hire will likely be a Solar Installer to handle panel mounting and system connections. Plan for a salary between $45,000 and $60,000. You might want to look for candidates with at least one year of construction or electrical experience.

For qualifications, prioritize installers with a NABCEP Associate certification and an OSHA 10 safety card. A frequent misstep is hiring cheaper, uncertified labor, which can result in failed inspections, costly rework, and safety issues on the job site.

Set your financial and operational systems

As you build your team, a good benchmark to follow is aiming for $200,000 in annual revenue per field employee. This metric helps you scale your hiring sustainably. It prevents you from taking on too much payroll before the revenue supports it.

To manage your projects, use a solar-specific platform like Scoop Solar or JobNimbus. Trying to run operations with generic spreadsheets often leads to scheduling mix-ups and poor client communication. These systems keep everything organized in one place.

Here are 3 immediate steps to take:

• Draft a job description for a Solar Installer that includes NABCEP certification as a preferred qualification.
• Research local OSHA 10 safety training options for your first employee.
• Request a demo from a solar project management software to see its features firsthand.

Step 8: Market your business and get customers

Build a local presence

Start with door-to-door canvassing in neighborhoods where you see existing solar arrays. Homeowners there are already familiar with the concept. You can also partner with local roofers and home inspectors for referrals. Offer them a finders fee, perhaps $250-$500, for each signed contract.

Many new owners ignore these grassroots efforts. They build trust and generate your first projects with a very low acquisition cost. Your goal is to get yard signs up, which are powerful, passive advertisements.

Focus on digital marketing

Set up a Google Business Profile with photos of your work. Then, register for Google Local Services Ads. This puts you at the top of search results for local queries. Leads from this source often cost between $50 and $150.

Also consider platforms like EnergySage to bid on qualified leads. Expect your total Customer Acquisition Cost (CAC) to be around $3,000 per project when you factor in all marketing expenses. This is a standard industry figure.

A strong referral program is your best long-term strategy. Offer existing customers a significant incentive, like a $500 cash bonus, for every new client they send your way who completes an installation.

Here are 3 immediate steps to take:

• Create a Google Business Profile and upload photos of your equipment and team.
• Draft a simple partnership agreement for local roofers that outlines your referral fee.
• Outline a customer referral program with a specific cash incentive.

Step 9: Price your services and create proposals

Set your pricing strategy

Your pricing model directly impacts your profitability. Most solar installers use a cost-per-watt model. For residential projects, this often falls between $2.50 and $3.50 per watt. This price should cover equipment, labor, and overhead while securing a healthy profit.

Aim for a gross profit margin of 25% to 35% on each project. This means your equipment markup should be around 20% to 30%. Many new owners make the mistake of only marking up hardware, forgetting that soft costs like permits and insurance can be 50% of the total job cost.

Create winning proposals

A professional proposal can make or break a sale. Use software like Aurora Solar or HelioScope to generate accurate system designs and financial projections. Your proposal should clearly outline the total system cost, expected energy savings, and available financing options.

To understand what homeowners are seeing, you can review competitor bids on platforms like EnergySage. This gives you insight into market rates and helps you position your offer competitively. A strong proposal justifies your price with clear, data-backed value.

Here are 3 immediate steps to take:

• Calculate your all-in cost-per-watt, including hardware, labor, and soft costs.
• Build a proposal template that details system design, total cost, and projected savings.
• Analyze competitor pricing by reviewing sample bids on a platform like EnergySage.

Step 10: Implement quality control and scale your operations

A formal quality control process prevents costly return visits. Create a post-installation checklist that covers everything from racking integrity to wire management. This simple step helps you avoid failed inspections and ensures every job meets your standards from day one.

To measure quality, you can track your system performance ratio (PR), which compares actual to expected energy output. Aim for a PR of 80% or higher. Also, a good goal is to have fewer than one service call per 10 installations for non-warranty issues.

Know when to grow

Use the benchmark of $200,000 in annual revenue per field employee to guide your hiring decisions. Once your project backlog consistently exceeds six weeks, it is a strong signal that you should add another installation crew to meet demand without sacrificing quality.

A frequent mistake is to delay investment in operational software. Managing multiple crews with spreadsheets often leads to scheduling errors and poor communication. You might want to use a platform like SiteCapture to standardize photo documentation, which helps you manage quality remotely as you grow.

Here are 3 immediate steps to take:

• Create a 20-point quality control checklist for every installation.
• Calculate your current project backlog in weeks to assess your hiring needs.
• Request a demo from a photo documentation platform like SiteCapture.

Starting a solar company is about more than just panels and wiring; it's about building trust with each homeowner. Your reputation for quality work will be your greatest asset. You have the roadmap, so take that first step with confidence. The market is ready for you.

As you start to sign clients, you'll need a simple way to get paid. JIM turns your phone into a card reader, letting you accept payments on the spot for a flat 1.99% fee with no extra hardware. Download JIM and get ready for your first sale.