Solar energy business contains huge opportunities with larger profits that can be earned with sheer patience and persistence. Solar being one of the largest renewable sources of energy, a lot of experienced businessmen and start-ups have already ventured into solar energy business. To start a solar energy business, entrepreneurs or businessmen should have sound backup of financial support, as well as political acquaintance, if required.
There are two major divisions of the solar industry that are flourishing and expanding, such as Solar PV and Solar Thermal. To get assistance regarding solar energy projects, there are several government institutions and commercial organizations. Further, let’s discuss the process of starting a Solar Energy Business with its types and segments.
Process to Start a Solar Energy Business
1. Creating a Business Plan
Writing a detailed business plan is the most important task before starting any business. Business plan should contain all the necessary details like business background and detailed information related to budget, working capital investment, workers, strategies, techniques, location, equipment, raw materials, etc. Business plan further helps in getting funding support from lending institutions like private and public sector banks, NBFCs, Regional Rural Banks, Small Finance Banks and Micro Financial Institutions, whenever required during the business tenure.
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2. Market Research
Another essential task before starting a solar energy business is performing thorough research of almost every component involved in the business. More the research, less are the chances of business failure. Research could be related to solar projects, equipment, parts, infrastructure, marketing, hiring, and finding customer base, suppliers, contractors, etc.
3. Legalising Business
The next important step is to legalize the business entity by forming a company by undertaking company registration. Under the Company’s Act 2013, a business can be registered as a company under various forms, such as sole private or public limited, proprietorship, partnership firm, Limited Liability Partnership, etc.
Following documents, registration certificates and licenses are required to be obtained by business to get registered as a company:
- Company/LLP registration certificate
- Company’s bank account number and PAN
- GST registration with Identity Proofs of Directors/Owners/Partners
- Sales Tax and TIN numbers
- Article of Association (AoA) & Memorandum of Association (MoA)
- Shop and Establishment Act License
- Certificate of Commencement
- Other licenses, if required
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4. Acquainted with Government’s Electricity Department
It’s vital to maintain good connections with the electricity department that comes under the respective State Government, wherein the solar plant is about to be set up. It helps business owners in getting over with various complex or lengthy documentation processes in less time and also making it easier to get approvals.
5. Finalizing Location
Location decides the fate of the business whether it will be a success or failure. Moreover, considering the nature of this business, it is highly important. Solar energy plants need to be set up considering the density of sunlight. Locations need to be chosen wherein there is high density of sunlight to capture maximum sunlight for more storage and future usage.
6. Financial Actions
Business owner also needs to prepare a rough budget of his/her spending that shall include various business divisions as follows:
- Infrastructure
- Land/Space
- Logistics
- Machinery/Equipment
- Maintenance
- Manpower/Workers
- Marketing/Advertising
- Office premises
- Raw materials’ purchase
- Tax payments
7. Hiring Workers
One of the key steps in making business a success is hiring efficient and skillful workers or employees. For Start-ups, even more hardworking and competitive employees are required. Efficient workers may start delivering results in the initial stages of the business and shall lead ahead in making solar energy companies into a profitable venture in much lesser time.
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Types of Solar Energy Companies
Solar energy sector is divided into 3 types of companies that include:
1. Solar EPC Company: Solar Engineering, Procurement and Construction Company is a type of company that manufactures solar panels that are used in capturing sunlight.
2. Solar Inverter Manufacturers: Companies that manufacture solar inverters that help in the conversion of Direct Current (DC) into Alternate Current (AC).
3. Energy Storage System (ESS) Manufacturers: Companies that develop batteries and energy backup solutions that can be attached with solar energy systems.
Types of Engineering Segments
Solar energy sector is further divided into 3 major engineering segments:
Civil: Cement blocks for supporting the module mounting structure
Electrical: Cabling, inverter, protection and switchgear and Solar Panels
Mechanical: Module Mounting Structure
Solar Energy business can be started considering various types of business divisions like manufacturing, distribution, consulting, installation, sales, parts & accessories, contractor, financer, R&D, maintenance, trading, execution and training. All these divisions contain a lot of scope with multiple opportunities for business to grow, expand and earn profit.
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If in case, any financial assistance or funding support is required during the business tenure or before starting a business, business owners can simply visit paisabazaar.com to check and compare from various business loan deals offered from leading financial institutions at competitive interest rates with flexible repayment options.