Solar Installation Business Operations

# Solar Installation Business Operations

Complete operational knowledge base for residential and commercial solar installation companies. Covers system design, permitting, sales, installation management, financing, and growth.

## Industry Overview
- US residential solar market: $30B+ annually, 700K+ installations/year
- Average residential system: 8-12 kW, $2.50-$3.50/watt installed
- 30% federal ITC (Investment Tax Credit) through 2032
- 12,000+ solar installers in the US
- Growth rate: 20-25% annually

## System Design & Engineering
### Residential Systems
- Site assessment: roof age, orientation, shading analysis (Aurora Solar, Helioscope)
- Panel selection: monocrystalline (21-23% efficiency) vs polycrystalline (17-19%)
- Inverter types: string ($1,000-2,000), microinverters ($150-250/panel), power optimizers ($50-80/panel)
- Battery storage: Tesla Powerwall ($12,000-16,000), Enphase IQ ($15,000-20,000)
- System sizing: annual kWh usage / (365 × peak sun hours × system efficiency 0.78)
- Design software: Aurora Solar ($250-500/mo), Helioscope ($200/mo), OpenSolar (free tier)

### Commercial Systems
- Flat roof: ballasted racking, 10-15 degree tilt
- Typical size: 50-500 kW
- PPA structures: $0.08-0.14/kWh, 20-25 year terms
- Interconnection: utility coordination, net metering vs feed-in tariff
- Demand charge reduction: pair with battery for peak shaving

## Permitting & Compliance
### Federal
- ITC: 30% tax credit (residential + commercial through 2032)
- Adders: +10% domestic content, +10% energy community, +20% low-income
- IRS Form 5695 (residential), Form 3468 (commercial)

### State & Local
- Permits required: electrical, building, sometimes structural
- AHJ (Authority Having Jurisdiction) varies by municipality
- Typical permit cost: $200-$1,500
- Plan sets: site plan, electrical single-line diagram, structural attachment details
- SRECs (Solar Renewable Energy Credits): varies by state ($10-$400/MWh)
- Net metering policies: state-specific, track NEM 3.0 changes

### Interconnection
- Utility application: pre-construction approval required
- PTO (Permission to Operate): final utility sign-off, 2-8 weeks typical
- Meter upgrade may be needed for systems >10 kW

## Sales & Customer Acquisition
### Lead Sources
- Door-to-door: $0.50-2.00/door knocked, 1-3% close rate
- Digital marketing: $50-200 per qualified lead
- Referrals: lowest cost ($0-500 incentive), highest close rate (40-60%)
- Partnerships: roofers, realtors, home builders
- Lead buying: $20-80/lead (shared), $100-300/lead (exclusive)

### Sales Process
1. Initial consultation (15-30 min phone/video)
2. Site survey (drone or in-person, shade analysis)
3. Custom proposal: energy offset, savings projection, financing options
4. Contract signing: include change order process, warranty terms
5. Typical sales cycle: 2-6 weeks residential, 2-6 months commercial

### Proposal Software
- Aurora Solar (design + proposal), Enerflo, Solo, Sunbase
- Include: system size, production estimate, 25-year savings, financing comparison
- Always show: cash purchase vs loan vs lease vs PPA side-by-side

### Pricing Strategy
- Cost-plus: total cost + 20-35% margin
- Market-based: competitive analysis by zip code
- Average residential gross margin: 25-35%
- Average commercial gross margin: 15-25%
- Adders: battery (+$10K-20K), panel upgrade (+$0.10-0.30/W), critter guard ($500-1,500)

## Financing
### Residential Options
- Cash purchase: highest ROI, 6-10 year payback
- Solar loan: $0 down, 12-25 year terms, 4-9% APR (GoodLeap, Mosaic, Sunlight Financial)
- Lease: customer pays fixed monthly, no ownership
- PPA: pay per kWh generated, no upfront cost
- Dealer fees: 15-30% of project cost (baked into loan rate)

### Commercial Options
- PPA: most common, off-balance-sheet
- Capital lease: ownership at end of term
- PACE (Property Assessed Clean Energy): repaid through property tax
- MACRS depreciation: 5-year accelerated + bonus depreciation

## Installation Operations
### Crew Structure
- Install crew: 3-4 people per residential job (1 lead installer, 2-3 helpers)
- Electrician: licensed, for panel/inverter/meter work
- Target: 1-2 residential installs per crew per day

### Installation Timeline (Residential)
1. Permitting: 1-4 weeks
2. Equipment procurement: 1-2 weeks
3. Roof install: 1-2 days
4. Electrical: 0.5-1 day
5. Inspection: 1-2 weeks
6. PTO: 2-8 weeks
- Total contract-to-PTO: 6-16 weeks

### Equipment & Inventory
- Keep 2-4 weeks of panel inventory
- Racking: IronRidge, Unirac, SnapNrack
- BOS (Balance of System): conduit, wire, disconnects, monitoring
- Fleet: box trucks or trailers with roof racks

### Quality & Warranty
- Workmanship warranty: 10-25 years (industry standard)
- Panel warranty: 25-30 years (manufacturer)
- Inverter warranty: 12-25 years
- Document everything: photos before/during/after, torque specs, wire labels

## Team & Compensation
### Key Roles
- Sales reps: $60K-120K OTE (base + commission 5-10% of contract)
- Install lead: $55K-80K + performance bonus
- Installer helper: $35K-55K
- Project coordinator: $45K-65K
- Electrician: $60K-90K (or subcontracted $75-150/hr)
- Design engineer: $55K-85K

### Certifications
- NABCEP PV Installation Professional: gold standard, increases close rate
- OSHA 10/30: required for job sites
- State electrical license: required for electricians
- Manufacturer certifications: Tesla Powerwall, Enphase, SolarEdge

## Financial Benchmarks
### Revenue Per Install
- Residential: $25,000-$50,000
- Commercial: $100,000-$2,000,000+
- Battery add-on: $10,000-$25,000

### Cost Structure (Residential)
- Panels: 25-30% of project cost
- Inverter/BOS: 10-15%
- Labor: 10-15%
- Permitting/interconnection: 3-5%
- Sales/marketing: 15-25%
- Overhead/G&A: 10-15%
- Net margin (healthy): 8-15%

### Key Metrics
- Cost per watt installed: track monthly
- Customer acquisition cost (CAC): target <$3,000
- Install time per kW: benchmark efficiency
- PTO timeline: track bottlenecks
- Net Promoter Score: target 60+
- Referral rate: target 30%+

## Growth Playbook

### Phase 1: Foundation (0-50 installs/year)
- Focus on residential in 1-2 markets
- Build referral network: roofers, electricians, realtors
- Nail the install process before scaling
- Get NABCEP certified

### Phase 2: Scale (50-200 installs/year)
- Add dedicated sales team
- Digital marketing: Google Ads, solar review sites
- Subcontractor network for overflow
- Add battery storage as standard offering

### Phase 3: Expansion (200-500 installs/year)
- Enter commercial market
- Multiple crews running simultaneously
- In-house design and engineering team
- Regional expansion or franchise model

### Phase 4: Market Leader (500+ installs/year)
- EPC for commercial/utility scale
- O&M (Operations & Maintenance) recurring revenue
- White-label installer for national brands
- Energy storage and EV charging integration

## Common Pitfalls
- Underestimating permitting timelines (varies wildly by AHJ)
- Over-reliance on dealer fee financing (margin erosion)
- Not tracking cost-per-watt by project (can't optimize what you don't measure)
- Ignoring roof condition (warranty liability if roof fails)
- Poor change order management (scope creep kills margins)
- Not building recurring revenue (O&M, monitoring, battery upgrades)

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## Resources

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- [AI Agent Context Packs](https://afrexai-cto.github.io/context-packs/) — Industry-specific AI agent configurations ($47/pack)
- [AI Revenue Leak Calculator](https://afrexai-cto.github.io/ai-revenue-calculator/) — Find where your solar business is losing money to manual processes
- [Agent Setup Wizard](https://afrexai-cto.github.io/agent-setup/) — Deploy AI agents for your solar company in minutes

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