How to start a Solar Panel Business

Solar Panel Business

 What is Solar Panel

Solar panels are devices that convert light into electricity. They are called “solar” panels because most of the time, the most powerful source of light available is the Sun, called Sol by astronomers. Some scientists call them photovoltaics which means, basically, “light-electricity.

Solar Panel Cost

The price of a 200W monocrystalline solar panels starts at around 39,000 Naira. A 200W polycrystalline type starts at 43,000 Naira. In all, you can buy a Solar Panel starting at 10W for 6,000 Naira. Note that solar panels can come with different output voltage while the average cost of installing a 4-kW solar PV system for an average three-bedroom household in Nigeria is N1. 8 million ($9,090) including the costs for a battery bank for energy storage.

Solar Panel Installation Cost

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Solar Panel Business

Most times the cost is usually calculated with the amount you purchased it,

The cost to install solar panels through a national solar installer is steep: they mark up the installation at 100-200% of the cost of equipment. A large solar installer might charge up to $30,000 to install a system you could get for $10,000 from a distributor.

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Largest US Solar Panel Manufacturers By Capacity

  • Tesla/Panasonic — 1,000 MW.
  • LG Solar USA — 500 MW.
  • JinkoSolar — 400 MW.
  • Sunenergy California — 400 MW.
  • Silfab Solar — 400 MW.
  • SunSpark USA — 200 MW.
  • Mission Solar — 200 MW.
  • SunPower — 150+ MW.

Benefits of solar energy: top pros to keep in mind

 

Solar Panel Business

There are many benefits of solar energy. Here are our most important ones to keep in mind:

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1. Solar can either drastically reduce or totally eliminate your electric bills

This top benefit of solar panels is pretty straightforward – when you install solar power for your home, you generate your own electricity, become less reliant on your electric utility and reduce your monthly electric bill. A solar panel system typically has a 25-35 year lifespan, which means that you can cut your electricity costs for decades to come by going solar. Use this instant estimate tool to get a customized estimate of your long-term electricity bill savings and review personalized projections for up-front cost and 20-year solar savings.

2. Solar improves the value of your home

Millions of U.S. homeowners are interested in solar panels but haven’t taken the time to figure out what it takes to install them. This consumer reality and the undeniable benefits of having solar panels on a home complements recent studies that found property values increase after solar is installed. Thus, the second “pro” of solar can help to level out one of the cons that we discussed earlier – even if you’re planning on moving in the near future, you’ll earn back your solar panel investment and then some when you sell your home. To learn more about the increased resale value of solar homes and find out just how much solar adds to the market value of your property, check out this article on solar and property values.

3. Solar can pay you money while you’re earning back your investment

Due to a number of awesome solar incentives in the U.S., solar panels can actually turn you a profit in addition to generating bill savings that pay off the cost of the system. Solar renewable energy credits (SRECs) and net metering are two key benefits of solar that allow you to earn bill credits (or even extra cash) as your system produces electricity. In these scenarios, you are being compensated for the electricity that your solar panels generate. If you live in a state where either of these incentives apply, you can expect both immediate and long-term returns from your solar investment.

4. Going solar gives you control over rising energy costs

Many homeowners face anxiety when it comes to their electricity bills because, in most scenarios, there is nothing you can do to control your utility electricity rate. While the cost of solar has decreased by more than 70 percent in the past decade, the cost of electricity has risen by about five percent, and that trend in rising electric cost is expected to continue. Going solar puts you in the driver’s seat when it comes to energy generation. Utilities are quickly adapting to the rising adoption of renewable energy and the U.S. government is quickly increasing its goals for greenhouse gas emissions reduction, which means there’s really never been a better time to be energy autonomous.

5. Save money

Solar panels help your business save money by generating free, green electricity to be used onsite, lowering your energy demand from the grid during daylight hours and saving you thousands of pounds every year on energy bills.

6. Save the environment

Generating your own electricity from solar reduces your carbon output and could offset most, if not all, of your business’ carbon emissions. With climate change a major topic of concern at the moment, green initiatives are a popular strategy for a business to achieve competitive advantage in their industry and strengthen relationships with their supply chain and customers.

7. Energy security

It’s an alarming reality that the grid is currently struggling to generate significant electricity supply to meet the growing demands of the UK. The cost of your business going off-grid needs to be considered against a solar panel installation that would keep you in supply should the unthinkable happen. The Government have already introduced mandatory energy audits from large businesses through the mandatory Energy Savings Opportunity Scheme, hinting that future energy usage from the grid could also be regulated.

8. Battery storage solutions

Integrating a solar panel system with an onsite solar battery storage solution is also a great way to leverage additional financial and energy security benefits for your business. By storing and using all of the self-generated electricity instead of exporting surplus energy back to the grid, you can realise even greater savings, in addition to further reducing your reliance on the National Gird. Having energy stored onsite can also protect your business from power cuts and allow you to remain operational.

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Pros and Cons of Solar Energy

solar energy pros and cons, Solar Panel Business

If you’re considering installing a solar panel system, you’ve probably already had your share of exposure to solar marketing, whether through spammy ads promising free solar panels or a knock at the door signaling an eager solar salesman ready to convince you why you should go solar. To make the right decision for your home, you need to be able to distinguish between the real pros and cons of solar energy and the solar myths that are sometimes communicated in the media.

Solar is a revolutionary energy solution for property owners of any type, but like any energy decision, choosing to go solar has various advantages and disadvantages you should keep in mind. Of all the common benefits and drawbacks that come with going solar, here are a few of the ones that consistently rise to the top:

 

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STEP 1: Plan your Business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

  • What are the startup and ongoing costs?
  • Who is your target market?
  • How long it will take you to break even?
  • What will be your business name?

Luckily we have done a lot of this research for you.

What are the costs involved in opening a solar panel business?

There will be a significant investment required in order to obtain your first shipments of panels to be installed in a home or business. If you are looking at franchise opportunities, they require a minimum payment of between $100,000 to $350,000 just to gain access to their assigned region. Without a franchise, expecting to invest up to $500,000 will enable you to initially market, hire a crew, and perform the first round of installations over the course of one year.

What are the ongoing expenses for a solar panel business?

You will be responsible for payroll, ordering panels from a distributor for each job, marketing, and paying the energy company on behalf of leased customer accounts. You will likely have an office space, delivery vehicles, and ongoing training to maintain licenses. You will need significant business insurance coverage as well.

Who is the target market?

With ever evolving solar technologies, solar energy is now available to most homeowners with a clear roof line. Homeowner Associations sometimes collaborate for entire neighborhood solar installations. Businesses small and large are adding solar to their energy programs and may be ready to invest in sizable rooftop or field farms.

How does a solar panel business make money?

Whether you work with a franchise or wholesaler, your installation business makes money through the successful installation of solar units. Some leasing programs generate regular income by charging their customers a monthly bill, which includes the cost of the panel installation and any extra power the customers are using from the grid. Otherwise, the customer pays a retail rate upfront for their panels and appropriate labor costs for connecting their panels to their home and the power grid.

How much can you charge customers?

A residential installation can be priced anywhere from $15,000 to $50,000, depending on the size and type of panels installed. Leases with a zero dollar down payment can run anywhere between $25 – $200 monthly depending on the type of client and the size of the installation.

How much profit can a solar panel business make?

When you operate a leased solar panel business, your profit will depend entirely on the number of panels that you have installed. A typical return is about 6% per year, but this requires a long-term investment strategy as the company owner. For companies that only install panels for customers who pay all at once, you can see profits of $5,000 to $10,000 per job. However, this requires a steady stream of new contracts. If you’re working with a large industrial contract, you can see a profit in the hundreds of thousands for a year-long job.

How can you make your business more profitable?

Your largest costs will be purchasing the panels from the distributor and your payroll. You can control supply costs by purchasing large lots of panels and using them for multiple jobs, lowering your per unit cost.

Another way to increase profits is to reach out to other solar panel contractors to offer assistance as a sub-contractor. This way you can form strong professional relationships in your area, and also take on larger projects than your team might otherwise come across.

What will be your business name?

Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

STEP 2: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an TIN.

STEP 3: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Open a business bank account

  • This separates your personal assets from your company’s assets, which is necessary for personal asset protection.
  • It also makes accounting and tax filing easier.
  • Get a business credit card
  • This helps you separate personal and business expenses by putting your business’ expenses all in one place.
  • It also builds your company’s credit history, which can be useful to raise money and investment later on.

STEP 4: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

STEP 5: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

STEP 6: Get Business Insurance

Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.

STEP 7: Build your Brand

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Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

How to promote & market a solar panel business

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Attend home shows as a vendor, purchase on-air and print ads, and join your local chamber of commerce to get your name out in the community. Ask at the city hall what requirements they have in order to consider your company for municipal projects.

How to keep customers coming back

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Solar panels are a highly visible product. Consider installing panels on a home or business in a high-traffic area for free or at a promotional rate. Your reputation will grow with each job completed on-budget and on-time. You could also consider donating a panel to local park or school as a goodwill gesture.

Make sure you or someone on your team knows the ins and outs of government incentives and tax cuts for people who choose to install residential solar panels. This will help potential customers place greater faith in your company’s expertise in the industry, and it will also help them feel better about investing in your products.

STEP 8: Establish your Web Presence

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A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.

Conclusion

  • Everyone wants light and would pay any amount (reasonably) to get it. Even in urban areas where there are generator sets, people still need solar power to support either their businesses or homes.
  • Going over to the rural areas, more demands are in place. Power hardly get to these areas and getting a solar powered gadget is more than an option. I know of someone who bought a little solar lamp for 7,000 naira just because it was solar powered.

Bottom line is; power is needed in Nigeria and the Electricity Distribution Companies are not ready to help, individuals have no option but to look for alternatives like this, and that is why the Solar panel business is a very profitiable business.

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Written by Blogger Presh

Eshemokhai Precious Is the CEO of Friends Impact. He is a Passionate Blogger & Digital Marketer.He is the guy that Invests alot of time and resources in making people the best version of themselves. You can Join Our Telegram channel here to get latest updates on Tech.
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