Building a Resilient Solar Future

Operational and Financial Strategies for a Successful Solar Business

BY ERIN JOHNSTON

The past few years have been a front-row seat on the "solar coaster." Our industry’s wild ride has forced solar sales organizations and installers to brace themselves, much like a child experiencing a rollercoaster for the first time—excited yet equally terrified.

Opportunities for a thriving residential solar business abound, but they come alongside a perfect storm of challenges: rising operational costs, global banking turbulence, and shifting utility policies. While some companies have managed to climb back to success, others have faced plunges, leaving many simply clinging on for dear life.

But here’s the good news: success is within reach.

You’re about to discover actionable strategies to help build a strong operational and financial foundation for 2025 and beyond. From investing in people to mastering your numbers and building strategic partnerships, these steps will empower your business to thrive, even in an unpredictable market.

As we kick off 2025, let’s prepare for another ride on the solar coaster by focusing on what truly matters. The residential renewable energy market has barely scratched the surface of its potential, and success will come to those who lay a strong foundation.

Here’s how to set the stage for operational and financial excellence.

Investing for True Success

All successful businesses are built on strategic investments. These investments come in many forms: financial, time, energy, and even personal sacrifices.

But true success in the residential solar industry requires reframing our understanding of where these investments should be directed. Buying leads, purchasing a new truck, or expanding your install crew may seem like obvious steps to scale your business.

While these are essential in some cases, the most impactful investment you can make is in people.

Customers: The Lifeblood of Your Business

Without customers, there is no business. It’s essential to treat them accordingly. Those of us who have been in the industry for years have witnessed the fallout from orphaned systems and frustrated homeowners left in the lurch.

Remember, for most Americans, spending $35,000 on solar is one of the largest purchases they’ll ever make, second only to buying a home.

Shift the focus from simply “selling savings” to positioning solar as an investment in home efficiency and long-term value. Every customer deserves to feel like they’re your only customer. Abandon the “sign-and-go” approach to sales.

Post-installation, send a handwritten thank-you note or a small gift, and check in regularly to maintain the relationship. Not only does this improve customer satisfaction, but it’s also a prime opportunity to generate referral business.

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Employees: Pay for Experience, Not Just Time

Great businesses are built by great employees. Pay your team for their experience and results, not just their hours. An efficient, highly skilled employee earning an above-industry wage is more cost-effective than an inefficient worker simply clocking hours.

Consider restructuring compensation plans for sales teams. Residential solar remains one of the few trades where commissions are uncapped. Rather than leaving pricing decisions to external sales reps chasing high redlines, employ in-house estimators who understand ethical pricing and ensure profitability for all stakeholders.

Finally, embrace the golden rule: hire people smarter than you. The best leaders surround themselves with talent that challenges and elevates the company.

Partners: Align Values and Standards

Partnerships are critical to scaling your solar business, but they should be chosen wisely. Vet potential partners as rigorously as they vet you. Avoid accepting deals from any sales organization, lender, or equipment supplier without ensuring alignment in values and business practices.

Maintain open communication with distributors, suppliers, and financial partners. Schedule quarterly check-ins, even if you’re not actively conducting business together.

Building long-term, mutually beneficial relationships will create stability and consistency in an ever-changing market.

Knowing Your Numbers: Beyond P&L Statements

Understanding your financial health goes far beyond reviewing Profit & Loss Statements or Balance Sheets. These tools provide a snapshot, but they don’t reveal the whole story. Dive deeper into project-specific costs to determine which ones were priced correctly and which were not.

Keep your books on an accrual basis rather than a cash basis. This approach, combined with a Cost of Goods Sold (COGS) model and job costing, gives a detailed view of your per-project expenditures.

Most accounting software platforms allow customization to track soft costs, hard costs, and general business expenses. The insight gained will help you ensure your redlines are competitive and profitable in your market.

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The People-Centric Foundation of an EPC

Owning an Engineering, Procurement, and Construction (EPC) business comes with immense responsibility—to your customers, employees, and partners.

The common thread among all of these stakeholders is people.

From the sales reps knocking on doors to the project managers coordinating behind the scenes, and from the installers braving rooftops to the suppliers ensuring materials arrive on time, every person plays a critical role in your success.

Bad actors can drive up overhead, damage your reputation, and harm relationships, stunting your ability to scale effectively. Conversely, good actors can lower costs, enhance your reputation, and foster organic business growth.

Choose wisely, invest strategically, and treat people well. Your operational and financial success depends on it.

About The Author

Erin Johnston

Erin Johnston is a Solar Business Consultant based in Northern California. With over a decade of experience in residential home improvement—including HVAC, plumbing, and solar—Erin specializes in home performance and energy efficiency. A UC Davis graduate, she is actively involved in her local Chamber of Commerce and also coaches high school softball.

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