How Much Do I Need To Start A Solar Energy / Inverters Battery System Installations and Sales In Nigeria
If you’re an environmental protection enthusiast, this is exciting news. More people going solar means less environmental pollution. And if you’re an entrepreneur, herein lays an opportunity to make good profits.
Firstly You Develop Your Knowledge of Solar Panel Energy and Inverter System
The first step to starting a successful business is to develop a decent knowledge of the product or service you want to offer. You don’t want a customer catching you off-guard with a question you have no answer to.
In our case, you need to enhance your knowledge of solar panels. How do they convert sunlight into electricity? What are the different types of solar panels? What affects their prices?
It’s also essential to learn about the various solar industry trends, regulations, and forecasts. For instance, learn how the solar investment tax credit works for businesses and homeowners.
Choose Between Residential and Commercial Solar Installation
Do you want to provide installation services to homeowners or business owners?
Both market segments have their pros and cons, so it’s important to research and identify the best niche for you. One factor you should consider is local demand. If the vast majority of potential customers are homeowners, then you need to choose residential solar installation.
There are two main reasons why you should start a solar business in 2019. The first is that we are currently confronted with a worldwide climate crisis and, as such, we must all pitch in for a more sustainable future for our planet and our children. The second is that, in Nigeria, the solar sector has never been more welcoming than it is today. The pros and cons of solar energy tip heavily in favor of the pros.
With more and more people turning to renewable energy for their homes and businesses, starting a solar business is a relatively sound investment that is guaranteed to have a promising future, if done right. In what follows, we’ve put together the basic information you need to learn how to start a solar company and how to develop it further once you’ve set it up.
Why Do I Need To Start A Solar Energy Business?
The solar energy industry in Nigeria has experienced nothing short of a boom following 2006 and it does not look like things will slow down any time soon. In fact, quite the opposite is the case. But let’s talk some numbers and see why starting a solar business is one of the best investments at present. To begin with, the Solar Investment Tax Credit (ITC) has helped a great deal with industry stability and growth. It basically showed private investors that the government is committed to renewable energy and to supporting solar businesses long-term.
As a result, the American solar industry has grown by a whopping average of 60% every year, for ten years straight, from 2006 to 2016. As of 2018, over 240,000 Nigerians were employed by solar businesses, while the year 2017 saw an impressive $17 billion contribution to the U.S. economy from solar energy alone. Falling market prices, the rise in consumer social responsibility, as well as an extension of the ITC have led market researchers to predict that the national PV panel market size will grow to about $23 billion by 2025.
Understand The “World” of a Solar Energy Business Person?
Before you find out how to start a solar company, you might want to gain a better understanding of what goes on during an average day at work. Your typical day might start with a new installation. This means that you or one of your crews will have to head out to the location (which has to be previously inspected by an engineer) to install or continue installing solar panels. Other teams might be wrapping up additional locations, so they might be looking at installing battery systems or connecting the solar system to the electricity grid. While this is happening, your PR people are contacting, discussing, and engaging with potential customers.
Offering a free initial survey and model of long-term cost savings will bring you an edge when starting a solar business. You or a designated operations manager will likely be solely responsible with finding and securing appropriate federal and state grants, while evaluators will most often be out in the field, calculating solar energy potentials for various locations. In addition, you’ll be tasked with providing maintenance (and, if stipulated, repairs for already installed systems). Obviously, there will be payroll procedures that you’ll have to abide by and you’ll have to stay on top of your crews’ schedules and installation timeframes.
Is Starting a Solar Company Right for You?
If there was ever a right time to starting a solar company, it’s yesterday or right now, at the latest. There’s no secret formula to help you find out how to start a solar company. Much of the work is quite similar to other businesses. You’ll need a good initial feed, you’ll want to hire knowledgeable, reliable professionals to help you grow. Afterwards, you just have to find the customers (or help them find you) and offer them the best possible service. The greatest ace up your sleeve is that the industry in buying, selling, and leasing solar equipment is simply bound to grow immensely in the next 5 years and there’s a high chance that you’ll also grow with it.
It definitely helps to have previous managing experience. Even SMEs can be tough to handle to begin with. As a relatively small team of less than 20 people to begin with, the culture you establish will pretty much give the rhythm of the entire group. They’ll look towards you for guidance and leadership. Possibly the greatest skill you can have is the one that also made Google what it is today: hone your ability to find and hire people that are smarter than you.
How to Start a Solar Business in 3 Steps
Now that you have more information about solar businesses, you’re ready to carefully consider whether starting one is the right course of action for you. If so, then you might want to take into account the following steps as you plan your investment.
Step 1: Plans and Paperwork
Any business must be based on a solid plan in order to succeed, and solar businesses are no exception. As such, the first step to starting a solar business is to come up with a good plan. When you research other business plans online, you’ll find a number of things that your project should deal with regardless of the sector you intend to operate in. These include the initial cost to start the company, the target market the company products and/or services are addresses to, and the amount of time it will take for you to recover your investment and turn a profit.
Next, you must establish a legal business, preferably in the form of an LLC (limited liability company), which can protect your personal property in case your business is sued. Several federal and state taxes might apply, depending on where you intend to operate, so make sure you register for them before you offer any services to your customers.
Finally, you’ll need a business bank account to help you keep your finances organized and add an additional layer of professionalism when dealing with clients. Consider keeping your own accounting or assigning this task to a professional accountant, as records of your expenses and income are paramount to understanding whether or not your business is successful.
Step 2: Certification and Insurance
Some (though not all) states require you to obtain a license, permit, or both in order to install solar PV panels and solar energy systems. Starting a solar business is therefore also a matter of acquiring the right documents to be able to operate within legal boundaries. To avoid large fines and even the risk of closing down your business, research the specific requirements for solar businesses in your state and ensure that your company has the right license or permit before you install any systems.
Since the solar sector is relatively new, starting a solar company does not necessarily mean you have to get certified. Certification (as a PV installer, for instance) is, at this time, voluntary, but it is a great way to stand out from the competition and ensure your potential clients that your professional ability has been judged and found adequate. You can get certified by the North American Board of Certified Energy Practitioners following an application process (some courses and experience required) and an examination.
So long as you are working alone, business insurance is not mandatory, but it is highly recommended because it can protect both your company and your clients. Once you hire employees, depending on the state you’re in, you might be legally required to provide workers compensation insurance.
Step 3: Branding and Advertising
Though you might initially perceive it as less important than the services you provide, your company’s brand is actually fundamental to its success. Your brand expresses (or should express) everything you stand for as a company and, more often than not, it is what your clients have access to when they first come in contact with your business. Whether or not they like what they see can determine whether they choose to trust you with the solar power system for their homes or businesses.
This is why creating a powerful brand is one of the first things you should do when starting a solar company. Next, it becomes equally important to generate an online presence for your company through both a website and social media. Online, you’ll have the opportunity to say more about who you are, what the story of your solar business is, and why someone should choose your services over those of the competition.
To get customers to come back and recommend your services to others, your first priority should be to offer quality installation and maintenance for solar PV panels. Each time you complete a job on time and on your assigned budget, your reputation will benefit from your progress. To obtain more visibility, you can offer to install solar power systems at high-traffic locations for reduced fees, donate an installation to a local school or park, but also inquire about the conditions your business must fulfill to be considered for municipal projects.
Should You Have a Team or Work Alone?
Once you’ve learned more about how to start a solar company, you might want to consider whether you’ll be working alone or in a team. To a large extent, this depends on the experience you have with solar panel installation and maintenance. If you are a skilled electrician with knowledge of solar energy, then you might be able to operate the business on your own. Otherwise, it’s a good idea to consider the formation of a team that can assess properties and handle PV installations for you.
Even if you do decide you’re ready to work alone, however, starting a solar business can be an intimidating and stressful task. Eventually, you might want to hire a personal assistant to manage your schedule and you might want to assign your financial records to a personal accountant. If you’re just doing small jobs though, like installing solar camping panels, you may wish to work alone.
How Much Can You Earn with a Solar Business?
It is important to start your solar business with the thought that this industry is growing. If you want a sizeable share of the market, you have to go out there, meet people, and get it yourself. Having said this, the price of your typical installation can vary quite a bit, anywhere from around 100,000. ( One Hundred Thousand Naira ) to 10,000,000.00 ( Ten Million Naira ) and even more depending on things such as battery walls, size, and remoteness. Lease options can, therefore, vary from 30,000 Thirty Thousand Naira to 90,000 ( Ninety Thousand Naira ). The reason why it’s important to get out there is because your profit is proportional to the amount of installations you do every year.
For an installation that’s paid up front, your profit can range from 20,000 – 2,000,000 to an upwards after expenses. Your largest costs will be, by far, purchasing the photovoltaic panels. If you want to obtain better margins, your best option is to buy more panels. However, in order to do this effectively, you also need a steady stream of clients – and other businesses are the best ones to sign. Furthermore, don’t be afraid to collaborate with other solar businesses in your area. You can act as a subcontractor for them or the other way around, depending on your needs.
Ultimately, if starting a solar business is on your agenda, you should gather the necessary data, make your business plan, outline a strategy, and talk to some local investors. The market is growing and expanding, the government is offering major subsidies, and mid-to-long-term predictions are nothing short of stellar.
Click here to get the complete guide on the above business plan Click Here
Uses of this Business Plan (PDF and Word)
This business plan can be used for many purposes including:
• Raising capital from investors/friends/relatives
• Applying for a bank loan
• Start-up guide to launch your business
• As a business proposal
• Assessing profitability of the business
• Finding a business partner
• Assessing the initial start-up costs so that you know how much to save
• Manual for current business owners to help in business and strategy formulation
Contents of this Business Plan (PDF and Word)
This business plan include:
• Marketing Strategy
• Financial Statements (monthly cash flow projections, income statements, cash flow statements, balance sheets, break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortization)
• Industry Analysis
• Market Analysis
• Risk Analysis
• SWOT & PEST Analysis
• Operational Requirements
• Operational Strategy
• Why some people in this business fail, so that you can avoid their mistakes
• Ways to raise capital to start your business