What should I check before buying a solar installation company?
Check five things beyond the general buying checklist: which workmanship warranties are still running on past installs and who stands behind them, what the equipment supplier and distributor terms allow after a sale, how much signed work is not yet installed, how much the business leans on a few crews, and what is driving demand.
A solar installer looks like other trades companies on paper, but it carries obligations that stretch years past each job. Panels, inverters and batteries are installed once and then expected to run for a long time, and customers will call the installer when they do not. A buyer who only reads the financial statements can miss most of that, so build your questions around what the company has promised and what it still owes.
Warranties still running on past installs
Ask for a list of past installations that are still inside a workmanship warranty, with the terms the company gave each customer. Then ask how warranty calls have been handled in practice: who attended, what it cost and whether the manufacturer covered the equipment. Ask your lawyer how those promises are treated in the type of purchase being discussed.
Supplier and distributor terms
Ask which suppliers or distributors the equipment comes through. Read the agreements, and ask whether pricing, credit terms or certified-installer status stay with the company after a sale or need the supplier’s consent. A relationship that lives only in the owner’s phone is worth understanding before you commit, because losing it can change how the business buys and what it can offer.
Backlog, crews and what drives demand
Ask how much signed work has not been installed yet, what deposits are held against it and what the contracts promise on timing. Then look at who does the work: employees, subcontractors or the owner. Finally, ask the owner what brings customers in. If demand has leaned on outside incentives or a few referral partners, ask what the pipeline looks like without them.
- A list of installs with warranty terms and open service calls.
- Supplier and distributor agreements, with any consent clauses flagged.
- The signed backlog, deposits held and promised dates.
- Crew and subcontractor arrangements, and who holds key customer relationships.
The general steps in what to check before buying a business still apply, and how to find a business to buy covers the search.
Related reading
15 pages on the same subject, grouped by topic.
Buying
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- Expert answerHow do I check the quality of a solar installer’s past roof installations?
Financing
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
- 03Business Development Bank of CanadaGovernmentBuying a business? How to protect yourself from potential liabilities
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