Solar energy is a rapidly growing industry, and the benefits of residential solar panel installations for consumers are huge. In addition to saving money on their utility costs over the long term, residential customers who install solar panels on their homes are making a green choice that can help to save the planet and ensure a better future for their children. One great way to become a pivotal part of this revolution is to operate your own solar panel installation company, like Alternative Power Solutions of Colorado. If you have the technical skills and business knowledge, this is a great way to earn a living while also doing your part for humanity's future.

Like any business, however, there are unique challenges to the residential solar industry. Keep some of these tips in mind while drafting your initial business plan.

Licensing Requirements Are Varied

The solar panel installation industry is still relatively young and licensing requirements vary from state to state. If you already perform general electrical contracting work, then it is possible that you already meet your state's licensing requirements. Some states, however, require specialized licenses for solar panel installers while other states have no licensing requirements at all.

In addition to licensing required to legally operate in your state, you should consider whether there are any special state or federal incentives that may be valuable to your potential customers. In many cases, residential customers will only qualify for these incentives if they are working with certified or licensed contractors. Without proper licensing or certification, you will be unable to offer these benefits to your customers.

Consider Franchising

There are several national or regional solar panel installation companies that offer franchising opportunities. If you qualify to apply for a franchise, then it may be seriously worth considering. Although upfront franchising costs can often be expensive, they can be worth it to have access to proprietary technology and the resources of a larger company.  Franchising costs for many solar companies are less than $100,000, although in most cases there will be additional net worth or liquid asset requirements in order for your application to be considered.

Be Aware of Your Initial Investment

Performing solar panel installations will generally require a substantial investment of initial capital. In addition to your early marketing costs, you will also have to consider the cost of the panels themselves as well as the wages of your installation crew. You can help to reduce these costs by shopping around for wholesalers that can provide you with the best possible deals, but you should still expect your early capital expenditures to be in the mid to high six-figures. Your business plan should account for all of these expenses so that you can secure proper funding and protect yourself against any potential shortfalls.