How to Start Solar Panel Business in India 2024

Imagine being a solar entrepreneur in 2024, an era when India is on the verge of renewable energy goals and government incentives. It is not just a profitable venture but it is a chance to contribute to a cleaner and greener future. You may wonder how to start a solar panel business in India?

This blog will try to cover a few comprehensive steps to harness solar energy for a sustainable business focusing on key areas like reducing upfront costs, ensuring efficient energy use, and securing returns on investment.

It is the right time to begin a solar business in India as it aligns with the country’s target of achieving 500GW of renewable capacity by 2030 with solar energy playing a major role in this vision. Increasing advancement in solar technology has propelled businesses and households to adopt solar solutions enhancing energy security and economic growth by creating jobs, attracting investments, fostering innovation etc.

Example of government policies and incentives - Key government policies like PM-KUSUM and subsidies are driving solar energy adoption in India. PM-KUSUM supports farmers with solar pumps and power plants.

Overview of Solar Panel technology : Understanding the Solar Industry in India

Let us understand what solar panels are. Solar panels are essentially a cluster of photovoltaic cells which can convert solar energy i,e, sunlight into electrical energy or electricity. The process of extraction of electricity directly from sunlight is known as the photovoltaic process. This process is pollution free and noiseless and you would be surprised to know that the idea of producing electricity gained fame only in recent times even though the concept is a hundred years old. 

The solar panel business in 2024 is observing robust growth and dynamic trends, driven by technology and increasing demand for clean energy. A few reasons for the growth of solar business in India are discussed here:

• Widespread surge in Solar Energy usage

The push from the governments and organisations are leading to more renewable energy goals and thereby increase in solar businesses in India is expanding the capacity to meet zero carbon emission targets.

• Price drops in solar panels 

Innovations and increased manufacturing has brought down the price of solar panels steadily. This trend is gradually making solar energy and the solar plant business more accessible to both residential and commercial users, further driving market growth. 

• Newer Technologies

• • Bifacial Solar Panels: These highly efficient panels are capable of capturing sunlight on both sides.
  • Perovskite Solar Cells: These increase the efficiency and their production cost is lower as compared to traditional silicon-based cells.
  • Solar Storage Systems: Storage of solar energy is being enhanced and this is being backed by improved battery technologies lowering dependence on grid electricity.

To be a popular solar panel distributor in your area, it is crucial to know the latest technology trends in the solar energy dealer market.

A few pointers to set up Solar Panel Business

To set up a Solar Panel business in India, we need to take care of some strategies like:

• Begin with Market Research to analyse the target audience, competitors and the demand for solar panel industry in India.
• Design a robust Business Plan to map a structure on how to set up a solar power plant , goals, solar plant investments, and financing details.
• Acquire the necessary approvals from local and government bodies for all your Licensing and Permits
• Supplier and Manufacturing Partnerships: Engage reliable suppliers to set up manufacturing facilities and forge the right partnerships for your solar electricity business.

Ways to arrange finances for your solar electricity business

Proper financing is going to shape your solar panel business ideas. The lifeblood of any business, finance can be arranged in a couple of ways like:

• Self-finance: Your solar farm business initiative can be entirely funded by your savings, assets or income. Being the cheapest and easiest way of financing a business, self finance is a great option. However, looking at big finance projects you need more funds sometimes. For example if you wish to know how to get Tata solar dealership, you need to arrange finances accordingly.
• Debt finance: To fund your solar plant business, you may borrow business loans from institutions also. Availability of debt finance can be an option but it comes with interest costs and repayment hassles.
• Equity finance: For the solar panel industry in India, equity finance would mean raising money from investors, in exchange for a share of ownership or products in your business. While it is an attractive and scalable funding option, it would somehow dilute your control and ownership of business.
• Grants and subsidies: It is good to receive money from government or agency incentives for your solar plant business , While they are non repayable and beneficial, on the flip side, they are very competitive and condition bound.

Select Your Solar plant business Model: 

Once you have decided on funding your solar plant business, it's time to choose your business model . Essentially there are three types of companies in the solar energy sector like:

• Installation and Maintenance Services: this produces accessories and items for the solar panel industry in India.
• Sales and Marketing: This normally is the NBD area creating demand, leads and conversion into sales through digital platforms and this also facilitates website building.
• Services: In this services like installation, maintenance, repairs and other services are available for the solar plant business.

An elaborate plan of How to start a Solar Business

Among many businesses, a solar energy business is a great way to save the environment while earning a decent profit margin. To know how to make solar energy, let's look at these steps to get started:

1. Make a business plan

A good business plan will streamline all your processes categorically and help you be ever ready for a successful implementation of your dealership business.

• Managing Investments
• Sourcing Raw Materials:
• Team Arrangement 
• Training employees 
• Business Strategies 
• Marketing Strategies
• Sales Techniques
• Equipment Assembling
• Contacting Manufacturers/Suppliers

2. Conduct a strong Market Research

Market research related to different field-related components and aspects is essential before setting up a solar electricity business.

• Field-Related Components.
• Equipment
• Marketing Strategies
• Infrastructure
• Hiring Need
• Competitor Analysis
• Contractors
• Suppliers

3. Legitimising and Authorising Business

• There are some basic licences required for your solar farm business plan. In order to legitimise your solar business, register it under the Companies Act 2013 as a proprietorship, LLP, partnership, or private/public limited company. Apply for an Employer Identification Number (EIN) for tax registration, obtain a Certificate of Occupancy for your physical location, and secure business insurance to protect against potential losses.

Given is a list of documents, licences, and certificates required for a company’s registration:

• GST registration
• Company or LLP registration certificate
• Company’s PAN and bank account number
• Sales Tax and TIN numbers
• Certificate of Commencement 
• Article of Association (AoA) & Memorandum of Association (MoA)
• Shop and Establishment Act License

4. Find A Suitable Location

A suitable location shall impact your business success largely. To be the best solar franchise in your area, a strategic location is very important that has ample sunlight. Besides, this some other factors that need to be kept in ind are :

• Accessibility
• Proximity to Suppliers
• Target Market
• Regulatory Environment
• Land Availability
• Utility Connections

5. Streamline Finance Management

Managing finances for a solar franchise is a crucial aspect for business. You can make a checklist of factors to make an estimate of the solar franchise costs involved in the following:

• Infrastructure
• Land or space
• Machinery, tools, and equipment
• Staff and employees
• Maintenance 
• Marketing 
• Training 
• Raw materials
• Legal expenses

6. Hire the Perfect Team

• Workers are the key asset of a company. Hire skilful and efficient workers to produce the desired results. Since solar energy is still a new concept in India, you must train them to use the equipment safely and efficiently.
• To become the best solar franchise in India, your key asset is your team of workers who need to be very skillful and efficient. While the solar panel industry in India is still growing, your leadership in training your personnel is of utmost importance be it marketing and sales to equipment handling, to installation to servicing et al. 

7. Know the Engineering Segments

• To be a professional solar dealer, you need to be proficient with the engineering segments that involve your business. The segments involved are essentially :

• Electrical Engineering: Involves protection, inverter, cabling, solar panels, and switchgear
• Civil Engineering: Handles cement blocks to support the module mounting structures
• Mechanical Engineering: Deals in module mounting str

Conclusion 

To establish a successful solar panel business a thorough planning and market research is crucial besides a strategic location and compliance to legal requirements. As a solar dealer you need to address these vital factors and also be updated with the latest industry trends. To aim at being the best solar franchise in India and cater to the growing demand of renewable energy, you need to position your business as a reliable and sustainable energy provider for the burgeoning markets.

FAQs

Q1. How many solar panels approx. are needed to run a business?

Ans. The number of solar panels for an office differs based on energy consumption and location. Roughly, considering the average residential setup of 20-25 panels (6-7.5 kW), an office might require a system ranging from 10-20 kW or more.

Q2. How much does a solar panel farm approx, cost in India?

Ans. On average, the cost of a 1MW solar power plant in India ranges between Rs 4 – 5 crores. There are several other factors that influence the initial solar investment. The key component making up a solar power plant is the solar panel which comes in various forms.

Q3. What is the solar industry outlook for 2024 in India?

Ans. India has achieved a great milestone in its solar energy sector, registering record installations of approximately 15 GW during the first half of 2024, according to a report by Mercom Capital. This surge in capacity marks a 282 percent increase compared to the 3.89 GW installed in the same period in 2023.