HeatSpring Solar Startup Guide

Version 2

Published - December 1st, 2014

Author: Chris Williams
Solar Startup Accelerator:
https://www.heatspring.com/courses/solar-startup-accelerator
$300 Discount Code: “solarstartup”

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

Why This Guide?
In 2012, I published a basic “Solar Startup Guide” for professionals
who wanted to expand a business into solar or start a new solar
installation. The purpose was to provide some very basic questions
that would efficiently lead professionals to material that were trying
to research.
The guide was really successful. Over the past 2 years, we’ve had
700+ downloads.

It would be impossible with a single blog post to teach someone

everything that they need know to start a solar contracting business,
but the goal was to give a general direction and provide some
specific articles that were tailored to their situation that could
help start the research process. My thought was that if I could
reduce  research time by a few weeks or months that would be an
incredibly valuable to our readers.

Since we’ve published the first guide, we’ve added about 30

additional free resources for professionals to use in their research on
starting a new solar business or expanding a business into solar.
Our new guide includes technical design tools, commercial PPA
tutorials, project management Gantt charts, and many useful
reference articles.

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

Here’s how the guide will be structured:

1. I’ve outlined the three types of businesses in the solar

installation supply chain that are actually responsible for
installing equipment. I’ve provided examples of the types of
firms and what these firms need to be good at to stay in
business. These examples are not meant to be an exhaustive
list. Rather, these are firms I remembered off the top of my
head. They are listed to serve as a jumping off point, so, as you
research, you can see who they are and how they talk about
themselves.
2. I’ve outlined the four types of the most common new business
scenarios. Each scenario has advice on where those types of
business should focus their research, the skills that one might
need to acquire, and some free research material.
3. Lastly, I go over the material that I didn’t cover in this article
that is important to a business after it has made its first few
sales.
A few assumptions and caveats about the article and the four
scenarios.

1. I won’t make an assumption about your background or current

skills. If I did this, the number of permutations I would have to
create a decision tree would make the article impossible.
However, you should be able to keep your current skill set in
the back of your mind to find the most useful content.

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

 2. The second assumption is that you have a clear goal within the
solar industry. By identifying your goal and knowing
your existing skills, it will be easier to point you in the
direction of the research that you need to start research.
3. If you have any questions, please leave them in the comment
section and I’ll help you out.
4. This is an extremely long article. If you want to download this
article for future reference, please click here.
5. If you’re looking to start a solar business, or expand an existing
solar business, check out our 7-week Solar Startup Accelerator

Three Places in the Supply Chain

When looking at installing solar, there three main parts of

the supply chain that are actively installing equipment.

• Developers
• EPCs
• Subcontractors
There are a few other primary players in the solar supply chain that
we will not discuss in this article.

• Support services. This includes accountants, lawyers, and

supporting engineers. Especially in commercial solar, these
services are part of the supply chain, but I won’t discuss them
in this article.

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

 • Manufacturers. This includes the manufacturers of all of the
equipment that is installed. Yes, there are opportunities to
bring new products into the market, but that’s beyond the
scope of this article.
• Distributors. Distributors provide low volumes of equipment
and support services. This is mainly to the residential and light
commercial market.

A Solar Developer 

A solar developer is typically responsible for all elements of a

project except for designing and building the array. This can include
finding land, getting site control, identifying investors, identifying
and finding an EPC, negotiating and signing a PPA with the off-
taker and the investor.

A developer makes money on the spread between the cost per watt
that an investor buys the cost per watt for an EPC to build the
project. If a developer can sell a 1MW project to an investor for $2.00
and they can have an EPC build it for $1.70, they make $0.30 per
watt.

However, developers take on a lot of risk early in the life of a project.

They’re responsible for doing any feasibility studies that the utility
may require, getting site control, and performing initial engineering
work to get the interconnection finalized.

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

The word “developer” tends to be used only for commercial and
utility projects. In residential project, you’re simply selling to a
residential homeowner.

A developer must be well-versed in many area of project

development including:

• Investor relationships. The developer tends to be the point

person bringing all of the parties together to make a project
happen. This is heavily dependent on identifying and getting
project investors interested in buying projects.
• Local solar policy and legal aspects. Local incentive structures
and legal rulings can have a significant impact on the ability to
develop solar projects. A solar developer must be extremely
knowledgeable about policies and precedents in their region.
• Interconnection policy and land access laws. Getting site
control is the most important aspect of developing a solar
project. Grid interconnection is also required to develop a
project. Developers need to understand all of the processes
required to gain site control and get a project connected to the
grid.
• Communication, negotiation, and planning. A large component
of a developer’s job is simply communicating and managing all
of the parties involved in the transaction.

Examples

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

 • SHR Energy
• Solventerra
• Blue Wave Capital
• Southern Sky Renewables

A Solar Engineering, Procurement and Construction Firm (EPC)

EPC stands for engineering, procurement, and construction. A solar

EPC is responsible for designing, building, and commissioning an
array. It’s common for a developer to sign a contract with an EPC to
build their array. The relationship between EPCs and developers can
also be somewhat vague. EPCs often want to start developing
projects; developers will also occasionally offer EPC services. I
provide a few examples below.

Here are the skills of a good EPC. These skills are true for
residential, commercial, and utility projects. However, utility and
commercial skills are more in-depth.

• Bidding. The key to an EPC job is that they can win bids
effectively but also deliver the a high-quality project profitably.
• Engineering. EPCs are typically responsible for designing a
project. This can include the structural or civil engineering of
the project, electrical engineering, and equipment selection.

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

 • Project Management. When the project begins, the EPC is
responsible for construction project management. Project
management is critical in solar construction.
• Construction. Lastly, the EPC is responsible for the actual
construction of a project. Some EPCs have their own
installation staff of electricians and contractors. However,
some EPC firms will bid, design, and manage the project and
subcontract out all of the labor.
• Commissioning. The EPC is responsible for proper
commissioning of a project.
Examples

• Boston Solar
• Aldon Electric
• Beaumont Solar
• Gehrlicher
• Nexamp. (Nexamp is part-EPC and part-developer.)
• American Capital Energy. (ACE is part-EPC and part-
developer.)

Subcontractor

A subcontracting firm performs a portion of the construction

work needed to complete a solar job.

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

Subcontractors are commonly responsible for the the labor to build
the project. It’s common for an EPC to simply hire the skilled labor
required to build the project. An EPC will often complete the
engineering work, purchase the necessary solar equipment, and
subcontract the construction work. Sometimes a subcontractor will
provide  equipment in addition to labor.

The skills required by a subcontractor:

• Bidding. A subcontractor must be skilled at creating effective,

competitive bids. Most jobs from EPCs will be put out to bid.
• High-quality, code-compliant work. A subcontractor must be
able to work quickly but perform high-quality and code-
compliant work.

Examples of Subcontracting.

• JM Electrical 
• Bonner Electric 

Four Scenarios for Starting a Solar Business

Now that you understand a little bit about the supply chain and the
types of services that are required to identify a site, get financing,

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

and build a project, I’ll present four different types of the most
common scenarios of folks starting a new solar business.

Let’s start with a few common backgrounds. For all of these, I’m
going to assume that your current background and skills is what
you’ll leverage and use with your new solar business. This won’t
always be true because you may not want to, but it’s an assumption I
have to make to lay out a methodology.

The goal of this guide is just to help you down the path of
identifying the research and skills you need to build to get your first
solar job. It will not focus on growth after that job.

Scenario 1. You own an existing contracting business focused on

residential clients.

This includes electrical, general, and roofing contractors. You want

to start selling solar to your existing customers.

This can be one of the easiest ways to enter the solar industry.

Step 1. Will you be selling to property owners or other contractors?

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

If you’ll be selling to property owners, there are two things you
should focus on:

• Do you have customers asking for solar right now in your

current business? If you already have customers asking about
it but you’ve turned people away, this is a great sign. If this is
the case, skip to question two around technical design. By
understanding the technical design of a system, you’ll have the
knowledge to a quote a system confidently.
• Have you surveyed your past customers? If you don’t have
customers asking about it but you have an existing book of
business, you should survey your past customers. Simply ask
folks if they’re interested in lowering their electrical bill with
solar and get a yes, no, or we want more information response.
Your only goal here is to gauge interest of your existing
customers; it’s not to sell the technology yet.

If you’ll be selling to other contractors and firms in the supply chain,

you’ll need to build relationships with contractors, architects or
engineers that are selling solar and need to have work
subcontracted. Here is where you can go to find other solar
contractors to call them and see if they need any subs. Everyone in
the industry is complaining about skilled labor, so firms that are
growing quickly will be looking for more folks to work with.

• Find your Local SEIA chapter and go to meetings.

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

 • Find your local USGBC chapter and go to meetings.
• Google “solar [insert your state or city]” and call the top 5
companies that come up on Google. The strategy here is to act
like a homeowner who wants solar.

Free Reading Resources

• How to Build a Renewable Energy Division in an Existing

Construction Company
• Create a Workshop and Have Customers Come to You
• Designing a Sellable Solar Company
• How to Create a Sales Presentation for a Homeowner
Workshop
• 5 Key Items to Writing a Solid Solar Sales Proposal
• How to Overcome the Top 5 Objections when Selling Solar
• 3 Things You May Not Know About Solar PV Sales
• Top 5 Ways to Spot a Bad Solar Roof

Step 2 Do you know how to design and install a solar array from
start to finish?

If you already know the technical side of solar, focus on step 1 and
then step 3 to get your business going.

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

If you don’t know how to perform a site visit, design a system, or
install a system, you’ll need to invest in technical training. A
technical understanding of all of the equipment will be key to
understanding how much a system will cost to install, how much
energy it will produce, and how much that energy is worth. Those
three elements are the foundation of selling homeowners, quoting
jobs, communicating the benefits of financing, or hiring other
technical folks within your business.

If you need to learn how to design, install or quote a residential solar

array, these resources will jump-start your learning.

Here’s what you need to understand about design and installing

residential solar arrays:

• The equipment involved in an installation.

• The price of equipment and what a good and bad deal look like.
• How to perform a site visit and determine the best equipment.
• Project management best practices.
• The interconnection process.
• Electrical code and how this impacts solar design.
• What’s required to submit and complete a job.

Free Research Resources

• How to Design a Solar PV System 101: The Basic Terms 

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

 • How to Design PV – A Walkthrough of How to Size a Solar
Array and Estimate Power Production
• How to Design Grid-Connected Solar PV Inverters, Strings,
and Conductors
• How to Use Solar Subcontractors
• 30 Minute Video Lesson on How to Install Solar PV Modules
• How to Get the NABCEP Certification
• Photo Guide: Installing Solar on Flat Roofs in NYC
• Free Class: Solar PV Design Basics, Code, Economics, Site
Visits, Sales
• The Solar Interconnection Process 101
• 9 Things You Must Know to Become a Solar Designer
• What Licenses Do You Need to Install Solar
• Free Tool: Project Management Gantt Chart
• Live Lecture: Residential Sales Optimization

Step 3. Do you know how to communicate and sell solar to

homeowners? Do you know the difference between solar leases,
solar loans, and cash sales, and can you sell them equally?

Residential solar is sold many different ways these days. You’ll need
to learn all of them, even if you don’t offer them. While a cash sale
was what drove the solar industry before 2007, leases have
dominated since then. However, leases are now in decline and solar
loans will be picking up.

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

Here’s what you need to understanding about solar sales.

1. How much solar can fit on a roof.

2. How much it costs to install a solar array.
3. How much energy an array will produce.
4. How to calculate the value of the energy that will be produced.
5. The returns of a solar array for a cash investment.
6. The returns for a solar loan sale and how to communicate that.
7. How to communicate the benefits of a solar lease.

Free Reading Resources

• Finance 101 For Renewable Energy Professionals: http://

blog.heatspring.com/renewable-energy-financing-101/
• Finance 101 For Solar PV Professionals: http://
blog.heatspring.com/solar-project-financing/
• The Impact of SREC Assumptions on Project IRRs: http://
blog.heatspring.com/the-impact-of-srec-value-assumptions-on-
commercial-solar-pv-project-irrs
• Are SRECs Taxable? http://blog.heatspring.com/are-solar-
renewable-energy-credits-taxable/
• Free Tool: Solar PV Loan Calculator: http://
blog.heatspring.com/admirals-bank-solar-loan/
• Solar PV Site Visit Checklist: http://blog.heatspring.com/solar-
pv-sales/

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

Scenario 2. You’re looking to start a new business focused on
residential clients. 

This is very similar to the first scenario but different because you’re
starting from scratch.

Focus on getting customers. The name of the game in residential

work is customer acquisition. You also need to know the technical
side and be able to install projects profitably.

A few pieces of advice on getting your first few jobs. The most
effective strategy I’ve see is for folks to become very active in their
community and introduce themselves as solar installers. By
becoming active in parts of the community that care about
environmental issues, you’ll likely bump into potential customers.

1. Ask friends and neighbors

2. Join your local environmental group
3. Join your local 350.org chapter
4. Join your local chamber of commerce to get access to local
business owners.

The technical side is a challenge, but it’s easier than commercial

property so you’ll be able to learn it quickly. If you have customers
who are really interested in solar, you’ll be able to figure out the
technical details.

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

There are a number of distributors that provide equipment and can
also help connect you with the installers who buy from them.

Scenario 3. You own an existing contracting or service-based

business focused on commercial clients and you want to enter and
focus on commercial clients.

The decision tree for commercial clients is similar to residential.

However, commercial solar finance, design, and installation is
harder than with residential projects.

If you’re looking to expand into existing commercial business into

solar, there are a few things you need to focus on.

1. You know your trade and have access to customers. You need
to learn what the difference is about selling, designing, and
installing solar.
2. If you’re selling directly to property owners, you’ll need to learn
about solar finance and how to communicate a large
investment. If you’re going to be a subcontractor, you won’t
need to know much about finance, but you’ll still need to have a
firm grasp of the technical side of the business.

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

 3. If you’re going to be a subcontractor, you’ll need to get
confident at bidding, designing, and installing commercial
solar projects.

Step 1. Survey existing customers about interest in solar.

If Selling to Property Owners

If your plan is to sell to directly to property owners who are existing

or past clients, start by calling them to see if they’re interested in
solar. Without much knowledge about solar, you should be able to
gauge a general interest. All you need to know is if they’re interested
in lowering their electric bills by investing in solar.

If you’ve found that customers are interested, go to step two and

three start investing in technical and financial training. By investing
in technical and financial training, you’ll have the skills to find and
understand if a potential site and client will be a good fit for solar or
not.

Becoming a Subcontractor

If your plan is to become a subcontractor to other solar providers,

you need to connect with these contractors and see if they need

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

solar work completed. If they do, you’ll need to heavily invest in
training on solar code, products, design, and NABCEP certification.

All solar jobs require a few key components. It’s rare for a single
organization to be able to complete all the necessary tasks, so it’s
common for companies to subcontract the work that they cannot do.

All solar projects require:

1. Electrical engineering and design.

2. Structural design for roof-mounted projects
3. Civil engineering for ground mount projects
4. Roof installation for roof-mounted projects.
5. Earth work for ground mount projects.
6. Electrical work.

If you already provide roof contracting, contact complementary

solar service providers to see if they need contractor partners to
perform roofing work. Likewise if you provide electrical engineering.

In order to find existing contractors there are a few places you can
go to start your research.

• Local SEIA chapter

• Local USGBC chapter
• Your local IBEW will do solar work but only the electrical
aspect. They might need help with other aspects.

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

 • Commercial Roofing Association
Step 2. Invest in technical information, product training, code
training, and NABCEP Certification

If you’re going to be selling and installing solar, technical training is

required. If you’re going to only be subcontracting work from other
contractor, you won’t need to know the finance section but you’ll still
need to know the technical aspects.

Here is where you can go for training.

Product Training

• Inverter training. The inverter training likely be the most

beneficial for larger projects.
• Racking training. If you’re going to focus on roof-mounted
projects, it’s very important that you and your team understand
how to integrate solar without breaching the roofing
membrane.
• Local distributors offer training on a number of their products.
Yes, they want you to buy from them. Yes, it’s still valuable.

Certifications

Check these certifications out. You aren’t likely to need them right
away, but you will want them eventually.

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

 • RISE Certification
• NABCEP Certification
• UL Solar Certification

Free Design, Installation, and Commissioning Resources

• Commercial Solar Commissioning Checklist

• Free Tutorial on Data Acquisition Systems 
• Free String Sizing Tool 
• Using Sub-Contractors to Install Solar
• Batteries for Solar 101 
• 22-Minute Free Lesson on Battery-Based Solar PV 
• 13-Minute Lesson on NEC grounding 
• Off-Grid Solar in Downtown Boston 

Step 3. Invest in Solar Finance Education

If you’re going to be selling solar to property owners, you need to

become an absolute master at financial analysis and communicating
the financial implications of solar to both property owners and
investors.

You’ll need to master:

• Local policy
• SREC pricing and pricing volatility

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

 • Installation costs and the difference between gross and net
installed costs
• Pre-tax and post-tax returns
• Discounted cash flow analysis

This is just for selling commercial solar in a cash sale.

If you plan on working with investors to offer PPAs, you’ll need to do

even more research.

• How to set the PPA price

• The best legal structure to use when setting up a solar project
• How to identify project investors and communicate the returns
to them

Luckily, in the past few years, we’ve created a lot of excellent content
that can help you with research on financing commercial solar
projects.

• Community Solar 101 

• How to Handle Unknown Risks to Increase Solar Project
Success 
• Why Performance and Not Price is the Most Important Factor
for Finding Solar Project Investors
• Lessons on Developing Bankable Projects 

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

 • Modeling Solar Production Risk 
• The Most Common Solar Modeling Mistake, the Fix, and a Free
Tool
• How to Price Cash Equity vs. Tax Equity in a Partnership Flip 
• How to Calculate the Buying Price of a Commercial Solar PPA 
• How to Finance Any Non-Profit Solar Project Under 50kW 
• Interview: SREC Markets Will Grow in a Post-ITC World
• 50 minutes of Video Answering 5 Questions About Finding
Tax Equity Investors
• Advice from a $20MM Solar Investor
• 50-Minute Presentation About Commercial Solar Due
Diligence
• How to Understand Pre-tax vs Post-tax Returns 
• 60 Minutes of Video Answering 7 Questions on Commercial
Solar PPAs 
• How We Financed a 13Kw Solar Church Project
• “If Banks Only Understood Solar, My Commercial Solar
Business Would Grow” 
• The Impact of SREC Assumptions on Project IRRs
• Free Tool: Solar Leverage Model 
• A List of Everything You Need to Understand to Finance
Commercial Solar Projects  
• Are SRECs Taxable?
• Finance 101 for Solar PV Pros
• Finance 101 For Renewable Energy Projects
 

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

Scenario 4. You want to start a new business focused on
commercial clients. 

Starting a new business focused exclusively on commercial clients is

likely the hardest choice of them all. The hardest aspect will be
getting access to decision makers of commercial property. Not only
do commercial property owners tend to be more difficult to get in
front of, but the technical design and installation of commercial
applications is harder and you’ll need more training on the financial
aspects to sell such a large investment. Because the size of the
project is larger, there’s also more risk in making an incorrect
decision.

The technical and financial training you might need to do for

starting a new business focused on commercial is the same as
expanding a new businesses. What’s different is that you might
not have the technical or financial background, which will take you
longer to learn.

It’s really hard for me to say how exactly to get access to commercial
property owners. You’re going to need a huge amount of hustle to
get in front of commercial property owners.

Here are a few ideas for getting access to commercial property

owners.

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

 • Start spending time with local property owners’ association.
Here are a few examples around Boston. http://spoa.com/
andhttp://www.naiopma.org/
• Make a list of the business owners that you know. Contact
them and see if they own the property and if they’re interested
in solar.
• If you know friends who are working on a business that leases
space, talk with them and get them name of the landlord.

In order to communicate and sell to commercial property owners

you’ll need a strong technical and financial background to gain their
trust. Luckily, we have a lot of information on both commercial
design and installation and financing. See above in this article for
free resources on both technical and financial information.

If your goal is to focus on commercial property owners, it will likely

be too time-consuming to learn the technical design, installation,
and commissioning side and the financial and sales side.

 What is Not Addressed in the Guide

This guide is focused on providing you enough information on the

technical and financial aspects of solar so that you can identify
interested parties and get your first job. We didn’t go into all of the

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator

elements required to go from a single job to dozens or hundreds per
year.

There are a number of elements that we didn’t talk about that are
important to creating a sustainable business.

1. Pricing
2. Getting access to customers in a standardized and repeatable
manner
3. Cash management
4. As your grow, how to hire and pay sales people
5. As your grow, how to structure your business to optimize
efficiency and productivity

Get Advanced Training

If you’re looking to start a solar business, we’ve created the perfect

training for you. In our Solar Startup Accelerator, you’ll write your
solar business plan in 6 weeks with expert guidance. The course will
condense 6+ months of research into 6 weeks by providing you
access to an expert who has done it before.

HeatSpring Solar Startup Accelerator: https://www.heatspring.com/courses/solar-startup-accelerator