10 Top Business Plan Strategies for Solar Contractors Posted on Oct 18, 2023
What strategies should solar contractors include in their business plans to protect against some of the top risk factors involved in running a solar contractor business?
Strategy #1: A Plan for Monitoring & Staying Involved at the Political & Regulatory Levels. Changes in government policies, incentives, or regulations can impact the solar industry. Contractors should have a plan to monitor and be involved on regulatory issues to stay on top of how such changes will affect their business. Include policy goals of creating increased public awareness and education about the benefits of solar energy to generate more demand for solar installations. Policies promoting clean energy and sustainability, along with carbon reduction targets, can create a favorable environment for the solar industry.
Strategy #2: Plan Ahead to Protect Against Supply Chain Disruptions.
Solar panels and equipment often come from various manufacturers worldwide. Disruptions in the supply chain, such as those caused by the COVID-19 pandemic, can impact project timelines and costs. Plan to ensure sustainable supply chains for solar components and equipment to ensure the availability of quality products.
Strategy #3: Plan for Competition.
The solar industry is competitive, and contractors will lose business to other companies or new entrants if they don’t have a plan for handling the competition. Solar contractors can incorporate resilience features in their installations, such as microgrids, to differentiate their business and an enhance their company’s long-term viability.
Strategy #4: Develop Strategies for Working Around Weather and Natural Disasters.
Weather events can damage solar installations. Solar contractors should be prepared for the impact of storms, wildfires, or other natural disasters on customer project viability and contractual deadlines.
Strategy #5: Stay Up to Date on Technology Advancements.
Rapid advancements in solar technology can make existing installations obsolete. And, advancements in solar technology, energy storage, and monitoring systems can enhance the efficiency and effectiveness of solar installations. Solar contractors should have methods in place to ensure that their company and employees stay up to date with the latest innovations. This includes attending trade shows and having training programs and initiatives in place to develop a skilled workforce.
Strategy 6: Develop Partnerships to Enable Financing and Cash Flow Both for the Company Itself & to Offer Customers.
Securing financing for projects and managing cash flow are critical concerns for solar contractors. Delays in payments or issues with project funding can be worrisome. Solar contractors should plan ahead by developing partnerships with bank representatives and companies that provide affordable financing options, such as solar loans or Power Purchase Agreements (PPAs), that make solar installations more accessible to a broader customer base. For internal cash flow, an existing line of credit to tap can make or break a solar contractor.
Strategy #7: Prioritize Customer Satisfaction.
Customer satisfaction is essential for referrals and repeat business. Solar Contractors should ensure the employees at every level of their business know the important of meeting customer expectations and providing high quality service. Training and internal procedures are especially important as the business grows. Not only can this increase business revenue, but also it can prevent a costly lawsuit.
Strategy #8: Plan in Place for Periods of Labor Shortages.
Finding and retaining skilled labor can be challenging, especially during peak demand periods. A plan should be in place to prepare for periods of labor shortages to prevent and minimize project delays and increased costs.
Strategy #9: Internal & External Procedures Should Be Constantly Refined to Navigate Ongoing Regulatory Requirements.
Government and utility interconnection approvals are part of the solar installation process. Every successful solar contractor has key personnel and procedures place that know how to navigate the solar permitting processes. The lack of standardized regulations at the state and local levels require knowledge and expertise to reduce administrative burdens and project costs. Solar contractors should also take advantage of local and state opportunities to collaborate and share best practices that can help the industry grow and improve the constantly evolving regulatory requirements.
Strategy #10: Implement Written & Legally Compliant Safety Procedures.
Safety is a top priority in the solar industry, and contractors should have written plans and ongoing training that ensures the well-being of their workers and the public during installations.
Solar contractors should customize each of the above business strategies based on the specific market, location, and size of their business.