Solar Energy Business Plan

A Complete Guide on How to Start a Solar Energy Business

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With a growing focus on sustainability, solar energy is becoming more prevalent in India. With the Central Government’s aim to meet 50% of India’s energy needs through renewable sources, the solar energy industry has got a boost. Solar energy accounts for 13.22% of total power capacity installed in India during the first quarter of 2022.

This behavioural change has led many people to integrate solar energy solutions with their commercial as well as residential facilities. In fact, the focus on renewable energy sources has made starting a solar energy business an attractive option. However, this business requires you to have skilled staff and follow a structured strategy.

So, if you are planning to start this business, you need to have a robust solar energy business plan in place. Read on to find out more about how you can structure your solar power business plan and make it a success in the short and long term.

Types of Solar Energy Companies

Based on the operations that your company performs, there can be different types of solar energy companies:

Solar Power Plant Installation Business: Certain companies provide solar power plant installation services because these plants need high technical know-how. Estimates suggest that you may need capital of ₹4 Lakhs and above to start this business.
Solar Power Plant Manufacturing Business: Some companies also focus on manufacturing solar panels and other components like the batteries used in a solar plant. You will require an initial investment of around ₹5 Lakhs to start this business.
Solar Power Plant Sales Business: Certain companies only engage themselves with the sales of solar power plant components. To start this business, you may require a minimum of ₹1 Lakh.
Solar Power Plant Maintenance Business: Solar plants require timely maintenance to perform at optimal levels. Some companies are focused on providing this service. You can start a maintenance business with as little as ₹50,000.

A Step-by-Step Guide to Starting a Solar Energy Business

If you wish to start a solar energy business, it is advisable to have a business plan before delving into any other aspect. Following a solar panel business plan can outline the path to success for your business.

So, here is a step-by-step guide to creating a solar system business plan for your company.

1. Draft Up a Business Plan

Your solar power business plan must contain the details about all the necessary components:

Business background
Budget requirements
Funding prospects
Location
Staff requirements
Equipment and machinery
Raw materials

Charting out a solar energy business plan also helps in securing funding for your business from financial institutions.

2. Research & Analysis

Understanding your competitor and the market is key. Market and competitor analysis provides you with insights about how other players are faring. This can reduce the chances of failure and can help steer clear of potential pitfalls.

Market analysis can also help you in determining the following for your business:

Raw materials and supplies
Equipment and machinery
Contractors
Price point
Infrastructure
Marketing and hiring strategies

3. Registering the Business

The next step of your solar system business plan is to get your business registered. You can register your business as a company under the Companies Act of 2013 as either of the following:

Public Company
Private Company
One-Person Company
Proprietorship
Limited Liability Partnership
Partnership

Each of these forms of companies performs different functions. So, it is important to determine your company’s role and function even before you register it. Moreover, you need the company’s name when you are registering it. A good name can go a long way in establishing authority and building the brand image.

4. Tying up with the Electricity Department

Both Central and State governments are onboarding private players in the renewable energy sector. So, it is important to stay aware of the government’s legislation regarding solar energy businesses.

You will also need to tie up your solar panel business with the state government’s electricity department.

5. Choosing the Location

Another important component of your solar panel business plan is choosing the right location for your business. In a solar energy business, the environment plays a pivotal role and thus, you must find a location where your business can sustain itself.

Offering services in a locale or region with minimal sun exposure will affect your chances of success. Furthermore, choosing the right location helps get better reach and aids in easy transportation of solar equipment. Before you finalise a place, make sure you have prospective buyers willing to invest in your products.

6. Finances

For the growth and success of any business, finances are the most important factor. So, you need to have a clear estimation of your expenditures, revenue streams, etc. It is advisable to chalk out your finances in the solar panel business plan at the start.

In case you lack the required funds, you can also avail of a business loan facility to run your business smoothly.

7. Hiring Employees

A solar energy business requires highly skilled staff to run optimally. So, it becomes important to select and choose staff that are well-versed with the technical knowledge needed in a solar business.

Apart from staff with technical expertise, you will also need to hire a managerial team. Employees to maintain the company’s accounts are also key for business.

8. Key Machinery

The next component of your solar energy business plan is the procurement of equipment and machinery.

You will require the following engineering elements to run your business efficiently:

Mechanical: These elements deal with the mounting procedures and the module installations
Electrical: Electrical elements refer to electrical aspects of solar installation, like the installation of inverters, power generators, wiring, etc.
Civil: These elements safeguard the module-mounting platform

9. Marketing the Business

Having a clear marketing strategy is important for all businesses as it helps them reach their target audience. So, when you hire a team, make sure that you employ someone for the marketer’s role as well.

Comparison of Interest Rates Offered by Various Banks/NBFCs

If you have decided to start a solar energy business plan but do not have the required funds, you can go for a business loan. The following table presents the interest rate you can get on business loans from partner lenders on Bajaj Markets.

Lending Partners	Interest Rate Range	Maximum Tenure
Lendingkart Finance Limited	15% onwards	36 months
KreditBee	15% onwards	9 months
FlexiLoans	12% onwards	36 months
IIFL Finance	18% onwards	60 months
AYE Finance	28% onwards	36 months
Indifi	18% onwards	36 months
InCred	20% onwards	48 months
Ambit Finvest	20% onwards	36 months

Disclaimer: The interest rates mentioned in the above table are subject to change at the lender’s discretion.

Eligibility Criteria for a Business Loan to Start a Solar Energy Business

To avail of a business loan for your solar energy business, you will need to fulfil the following requirements:

You must be an Indian resident or an NRI
You must be between 25 to 65 years of age
You must be a self-employed individual with a regular source of income
Your solar energy business needs to be a sole proprietorship, partnership, limited liability partnership, or a private limited company

Documents Required for a Loan to Start a Solar Energy Business

You will be required to submit the following documents to a financial institution for a solar energy business loan:

PAN card, Voter’s ID card, passport, or driving licence as an identity proof
Aadhaar card, passport, lease agreement, or utility bills as an address proof
Bank statement for the last 6 months
ITR form
Balance sheet, and Profit and Loss (P&L) statement for the last 2 years
Business strategy
Map of the business’ location
Copy of licenses, permits, and registration certificates
Proof of partnership agreement/Sole Proprietorship Declaration (if any)
Certified copy of Memorandum and Articles of Association (if any)

How to Apply for a Solar Energy Business Loan at Bajaj Markets

You can apply for a solar energy business loan online by following these simple methods:

Step 1

Click on the ‘Apply Now’ button
Step 2

Fill in the loan application form with details such as your name, address, phone number and check for a loan offer
Step 3

You will now be navigated to a new page where you can compare the lenders and select the preferred one after entering additional details
Step 4

Select the loan amount and repayment tenure that best suits you
A representative will contact you to take your application further once you have completed the steps provided above.

Dos and Don’ts While Availing a Business Loan for a Solar Energy Business

1. Dos

Keep important documents handy: To avail of a solar energy business loan, you will need to submit a solar energy business plan and other documents to your bank. So, keep them ready even before you apply for it.

Research the market: Many banks and NBFCs offer business loans. Compare the loan features and interest rate before you finalise the lender.
Know your need: Based on your solar energy business plan, determine the quantum of loan that you need for your business. Choosing the right repayment tenure is equally important when you avail of a business loan as you may not wish to pay excess interest.

2. Don’ts

Avoid multiple applications: Do not apply for business loans from multiple lenders as it will lower your credit score.
Fail to check all charges: While you compare the lenders, do not just look at their interest rates. You must check if there are any additional charges levied on your business loans.
Never borrow without a clear plan: It is important that you clear your dues on time, so that your repayment schedule does not affect your business operations.