How does a solar installation company make money?

If you are looking at a solar installer, start with where the money actually comes from. The owner’s summary may blend several kinds of work into one revenue line, and each kind has its own rhythm, risks and staffing. Ask for the books to be broken out by type of work so you can see what repeats and what has to be sold again every month.

Install projects

Most revenue comes from design and installation jobs. These are won one at a time, so the question is how the company wins them: referrals, advertising, partnerships or a sales team. Ask how deposits and progress payments are recorded, and whether revenue is booked when work is signed or when it is finished. The answer shapes how you read any single month.

Service, monitoring and maintenance

Some installers also sell inspections, repairs, cleaning or system monitoring. This work can be steadier than new installs, but only if customers have signed up for it. Ask for the list of customers on an ongoing arrangement, what they are billed and how many calls are warranty work done at the company’s own cost, since that is a cost rather than income.

Add-ons and customer mix

Ask whether batteries, backup generators and electrical upgrades are sold alongside the panels. Check whether these are a real line of business or an occasional extra, and whether they depend on a supplier relationship. Then compare residential and commercial work. Commercial jobs tend to be larger and slower to pay, so ask about receivables and how the two types are staffed.

Your accountant can help you read the statements, and how to check a business before buying it sets out the wider review.