The solar business is a promising alternative energy sector with huge opportunities and equally good profits. With even the government backing up solar energy, more and more people are choosing it over perishable fuels. Sensing the potential of this industry, many start-ups as well as established businesses have ventured into this field and made considerable investments. If there is a right time to enter the solar biz, then the time is now. Starting in this industry will require tremendous persistence along with some financial support and good acquaintances. Rest assured, it is a profitable business no matter how small of an investment you make.
When you think of starting a solar business, you might be clueless about what you should do or where to look for information. A solar business is not a single entity, but a group of sub-businesses, each working on its own terms. Some require you to have deep technical knowledge about the working and principles of a solar panel, while others only require you to have marketing skills to convince people to go solar.
For starters, there are two main divisions in the solar industry: solar PV and solar thermal. Solar PV is used to convert solar energy into electric energy, which can be further used to operate lights, fans, etc. Solar thermal mainly deals with using the heat energy from the sun’s rays to heat water. Each kind of business will require people to work on various subsections like engineering, manufacture, and distribution.
No matter what kind of business you want to start, it is difficult to establish small businesses in this competitive era. Instead, choosing to freelance in collaboration with an established company can give you the exposure and financial support you are looking for. And the icing on the cake, you can also use this as an opportunity to build a loyal customer base.
Why should you choose the solar business?
India is a tropical country, which means it receives sunlight throughout the year. According to the Indian Ministry of Renewable Energy, our country’s land area receives about 5000 trillion kWh of solar energy, with an average of 4-7 kWh per sq. m. per day in most parts. To fulfill the growing energy needs of our country, the Indian Government is encouraging people to go solar. As of 2019, India ranks fifth in the world in terms of solar power and has plans to increase its solar power harvesting capacity to 175 GW by 2022. Moreover, increasing awareness among the general public about clean renewable energy is making more and more people convert to solar energy. This simply means a plethora of opportunities is opening up for solar business in the near future.
From a business point of view, the solar industry is an industry that can give high returns on minimum investment, if done right. It also means there will be a lot of competition, and if you want to be ahead, you have to plan and execute accordingly.
How to start a solar business in India?
As stated above, proper planning and execution are your keys to be ahead of your competitors in this industry. You can apply the below step-by-step guide to any kind of solar business you want to start, which includes the investment as well as the profit margin in the solar business in India.
- Make a business plan: Having a detailed business plan is the most crucial step for starting a business. Most of your decisions should also be taken in this step. How much money will you invest in this business? Who will be your customers? What kind of solar business should you start? You should have a well-researched answer for all these questions, before venturing into the actual business. Research the recent market trends to find the ideal solar business, one which gives you more profit while keeping the risks to a minimum.
- Clear the legal hassles: There are different types of certifications available depending on the type of business you want to start. You should keep documents like company registration certificate, GST registration, sales tax, and TIN numbers, etc.
- Financial Planning: Every business needs a capital investment amount. This should cover the costs of infrastructure, machinery, land, and maintenance. Always remember to invest only so much that you can afford to lose.
- Hiring workforce: This is the last but important step of setting up a solar business. Can you handle the business alone or do you want more people to be involved? Decide on how many more people you are going to hire, their duties, and how much you are going to pay them
After completing all these steps, you are ready to start a solar business. So, let us know more about the different types of business ideas in the solar industry.
Types of solar business ideas in India:
As stated earlier, the solar business comprises a bunch of sub-sections, each having its own working area. Below, we have compiled a list of ideas along with the investment, overall work, and profit margin in the solar business in India.
1) Solar Business Associate:
A solar business associate in the face of the company in front of the public. They are crucial to generate awareness and refer more customers to the company. It is one of those business ideas that require minimum investment with the time of work and profit all being in your hands.
Requirements: There is no special requirement for this business. You don’t need to set up a shop or even spare any land to start earning. All you need is a single sample model that you will use to demonstrate the working to potential customers.
Investment: Your investment can range from 30,000 rupees for a single demo product to 1-2 lacs rupees for the whole demo kit.
Profit Margin: There is no repeated cost that you have to pay to keep this business running, which means, after covering your investment amount, anything you earn over it will be net profit. It can range anywhere from 50,000 to 1 crore rupees, one lac rupees being the average.
The Best Company in India for Solar Business Associate and other types as well is Loom Solar.
2) Solar Installation Business:
The activities of a solar installation business are not limited to installing solar panels on rooftops. It also involves doing an on-site inspection for finding an optimum plan to install the solar panel, along with regular maintenance.
Requirements: You will need to buy at least a few solar panels along with other components and battery systems. There is no need to set up a shop, but you will need to hire a few people to help with installation and maintenance.
Investments: Investment in the solar panel business in India depends on the scale you want to work at. For a 10kW project, you will need about 4 lac rupees in the capital. As the scale of projects increases, your investment will also increase. Basically, your capital covers the cost of all the components and also the labour charges.
Profit Margin: Depending on the size and scale of the project, and how much you charge your customer for the installation, you can earn anywhere between 10,000 to 1 lac rupees per project.
3) Solar Parts Business:
Thousands of rupees worth of solar parts such as solar panels, solar lights, cooling systems, etc.. are sold every year in our country. Essentially, you act like a middle-man for the sale of solar products. It does not require any technical knowledge about the working of solar products.
Requirements: You have to stock all kinds of solar parts that people around you buy. You might need to set up a shop to display your goods and attract more customers to buy from you.
Investment: Your investment will be towards renting or owning a shop, and also buying all the required items for sale. You can buy the products by paying half the price upfront and buying the other half on credit. Then, you can repay for only those products that you have managed to sell.
Profit Margin: It depends on how much profit you want to make on every product. By studying recent market trends, you can set a price for the products and decide on the profit.
4) Solar Business Franchise:
You can get a solar business franchise by reaching out to top solar companies in India. By getting a franchise, you become eligible to sell the products of that company not only to customers but also to other retailers. You will also be managing any installation and maintenance of that company. This is one of the most profitable solar businesses you can start.
Requirements: You will require quite a bit of space for storing the solar parts. Also, bagging a franchise from a reputed company requires a lot of effort.
Investment: Your initial investment will be about 10-30 lac rupees. This will include inventory cost and labour expenses.
Profit Margin: A franchise from the right solar power company can give you lots of profit. The customer base is already established, so there is no doubt your services will be regularly engaged and you will also get regular income.
One of the top solar companies you can get a franchise from is TATA Solar Power. With over 29 years of experience in this field, you can be assured of profits. You can apply on their official website by filling a form that will ask for details such as Name, Contact number, etc. After that, the company representatives will call you, and if everything is successful, you will get an ‘Authorized Dealer’ certificate.
How to start a solar farm business in India?
Building solar farms is also one of the solar business entrepreneurship opportunities in India. Solar farms constitute large-scale installation of solar PV panels. They are also called solar parks or solar power plants. Investing in solar farm business has many benefits such as:
- On completion, it can earn excellent profit.
- It has predictable revenue and the profits are less volatile.
- High demand for solar power means you won’t run out of business anytime soon.
A solar farm requires huge investments in terms of money and space, but it also provides good returns on investment. Instead of generating power for personal use, solar farms generate a lot of power that you can sell to other companies. A small size farm will require land of a few acres. Similar to other solar businesses, you will need to have a proper business plan by conducting thorough research of the market. You will also need legal permissions from the government and a capital investment of at least 1 crore rupees, to build a solar farm of a considerable scale.
After that, you can reach out to well-known solar companies to collaborate with you for providing materials to build the solar farm. Generally, solar farms are built by a team rather than an individual. Multiple investors might be required to cover the cost of investment, and so your profits will also be divided. Most states provide high subsidies as a way to invite more people into the solar energy sector. Alternatively, you can also lease your land to a company to build solar farms. Make sure that your land is close to a centralized electricity unit.
- Investors: For an initial investment, you can either raise debt or reach out to multiple investors to cover the cost.
- Land: The ideal land for such a project will be the cheapest one you can get in a remote place. But not every land is suitable for such plants. Your land needs to be close to a power station so the power generated in your plant can be evacuated.
- Execution: The entire project will need good planning to make optimum use of the space available and also keep the project within your budget. There are many individuals and companies who specialize in these aspects.
- Buyer: If you do not have someone to buy the power you generate, your power plant will stand useless. Find companies that buy solar power and situate your plant as close to their power station as possible.
The solar biz in India has a bright future. With a population of over 1 billion, the issue of energy shortage is ever-growing in our country. This is an opportunity for investors and start-ups to start a business in solar energy, as it has good prospects. By knowing about the different solar business ideas, you can invest in the one that you find most suitable. Remember, the right plan and execution can put you way ahead in this solar energy race.