How Can I Start a Solar Panel Manufacturing Facility in the United States?
The solar energy demand has seen a 59% increase in sales annually over the last 10 years.
If you are interested in starting a solar business, now is certainly the time. In the last 5 years alone, solar power has come in first or second place in electric capacity additions, doubling MW (megawatts) from 5,000 MW to 11,000 MW annually. These numbers are specific across the United States as the price of solar is becoming affordable, and more companies are striving to get a share of the market.
It’s not just residential markets. Many businesses are tapping into much-needed ecologically friendly solar power energy. Walmart, Target, and Apple are just a few. New tariffs on imported solar panels have created a much-needed demand for solar panels manufactured in the USA.
But where do you start? Here’s how entrepreneurs can become solar panel manufacturers.
But where do you start?
How to start a solar company
Choose and register your business name
Your solar panel manufacturing facility should have a unique name, so make sure what you’ve chosen isn’t already taken. You can contact the Secretary of State’s office where you intend to set up your manufacturing facility to be sure your business name is not being used or too closely resembles another company.
You should also check with the USPTO to ensure your trademark is available. If you plan to incorporate, consult your lawyer to file the proper paperwork.
Open a business banking account
You will need to process payments, pay for vendors, pay employees and maintain operating costs. A reputable financial institution through which you handle your finances will help establish credibility with the licensing board. Be certain they can also handle online transactions.
Obtain your business tax identification number
Solar manufacturing companies located in the US and its territories can apply for an EIN (Employer Identification Number) through the Internal Revenue Service.
Locate and secure the facility for your solar panel factory
You may choose to purchase a structure that is already built or choose to build your own. Contact local governments to confirm that there are no legal issues regarding the manufacture of solar panels at the location. Also, ensure that the location fits well with your supply chain, as the solar panel manufacturing industry relies on imports from many sources.
Apply for your solar panel manufacturing business license
Each state has various certifications, licenses, and fees. The first step is to consult your local and state government to determine which certifications you will need. Some states like New York and Pennsylvania can take up to two years to get approval. It’s a good idea to start this process as quickly as possible.
Purchase required insurance for your manufacturing facility
Local and state governments will require you to obtain and maintain a level of insurance to cover unforeseen and sudden issues.
Online presence for your US made solar panel company
Every successful business has a website for potential customers to learn about your company. A solar panel manufacturer is no different. You’ll need to purchase your business domain name and contract a developer to build out your site with what your company offers, payment capabilities, coupon codes, and pertinent information about your solar panel brands.
Create a Business Plan
A proper business plan should include all of the various challenges that will be addressed when starting a solar business. This document is important to investors, banks, and potential customers. It also holds value in the company as a guideline or template for ethical business processes.
Some of these would include:
- The location of your manufacturing facility and what products you intend to produce (solar cell and/or solar panel production)
- Which materials you intend to use for PV module production (ex., thin film solar panels, crystalline silicon panels, etc.)
- The business goals and aspirations-becoming a leader in the solar panel power manufacturing process
- Employee protocols regarding previous experience, training, and certification
- Business ethics in relationship to the customers you serve-accountability
- Brief about the owners and founders’ previous experience-their intent to compete with other leading solar panel manufacturing plants in the United States of America
- Quality assurance team to provide guarantees of top-notch products leaving the plant
- Nationwide and global goals: Spell out your company’s goals regarding your solar panel manufacturing plant growth in the US and globally.
- Vision and mission statement-Notate the standards you will uphold, what your company’s intent is and how you will maintain integrity.
Business Structure
Chief Executive Officer – Recruits, hires, trains, disciplines, adheres to company values, develops incentives, establishes the manufacturing plant’s climate, reports to the board, and signs contracts. The CEO should know how to start a solar company.
Plant Manager – Manages projects and goals through the plant and maintains smooth operation of the plant. Experience in US-made solar panel construction would be a plus. Find some good solar panel makers to help improve panel efficiency and solar technology.
Administration Manager/Human Resources – Describes and submits for recruitment, training, evaluations, and new hire training.
Sales and Marketing Executive – Adept at creating and increasing sales. Can motivate sales. Negotiates prices with customers. Directs the sales team to reach goals. Can do market research on solar panels manufactured in the USA.
Accountant or Comptroller – Previous experience with starting a solar business is helpful but not required. Internal audits of cash management, financial forecasting and reporting, general ledger, budget development, and handling of all financial transactions.
Plant Technicians – Follow the lead of the plant manager. Experience with the solar panel manufacturing process will be an advantage.
Customer Services Professional – Maintains a level of excellence when interacting with customers by email, phone, text, social media, walk-in, or any other communication.
Insight Into Your Solar Panels Manufacturers Features
Strengths – What strengths does your organization have, and how will you leverage them into demand for your services?
Weaknesses – Honestly review what problems your company may face internally and in the market.
Opportunities – Where do you see growth potential?
Threat – What adversities may be encountered? (Current market trends, another solar panels manufacturer, increasing material costs, or other competition)
Market Analysis – Thoroughly analyze the market to determine areas of demand.
Trends – Where do the analytics determine the market is heading?
Target Market – List customers who will need your services, such as solar panel installation companies, etc.
Competitive Advantage – List customers who will need your services, such as solar panel installation companies, etc.
Marketing and Sales Strategy
You will need an exceptional sales team to show products to an interested audience. Your local Chamber of Commerce can be a great place to make contacts. Devise a strategy to find more contacts from there.
Income Sources – What products are you manufacturing for sale to generate income?
Intended Market – Who is going to need your product?
Sales Forecast – Where do your analytics say the market is going, and what percentage of sales do you intend to take?
Publicity and Advertising Strategy – How do you plan to promote your solar panel business? Which branding strategies will generate customers?
Pricing Strategy – Do you intend to offer competitive pricing compared to other solar panel brands?
Payment Options – Which methods of payment will you use? (cash, check, etc.)
Bundling – Bundle solar products together to make more sales. For example, homeowners switching from fossil fuels to clean energy may want add-ons with their photovoltaic panels, such as batteries, inverters, and generators.
Financial Projections and Costing
List all financial costs associated with the start up of the manufacturing plant such as:
- Fees and budget for license, permits, and liability insurance
- Purchase of an adequate facility
- Costs of getting the office up and running
- Amount needed for solar panel manufacturing process machines
- Methods for effective but cheap solar manufacturing
- Cost of software to run the business
- Website costs
- Two to three months of cash flow to pay employees and bills
- Advertising costs, business cards, advertisements, promotional material
As is the case with any new business, many variables are involved in starting a solar company from scratch. Solar module manufacturers have their work cut out for them, but the solar industry is a successful, time-tested enterprise. If you follow a set course of action, though, you will make your solar panel manufacturing business a success and become a leader in your field.
