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  • Writer's pictureSarah Lozanova

Common Hurdles to Growing a Solar Company

Updated: Nov 17

The solar industry is booming in the United States. Solar energy has had an average annual growth rate of 24% over the last decade, according to the Solar Energy Industries Association. But despite record-breaking solar system installations, some solar companies are going bankrupt due to mismanagement and inability to scale.

PV companies face a variety of hurdles that can hurt the bottom line and hinder growth. Read on to learn about the top hurdles and how to overcome them.

1. Regulatory and Policy Changes That Impact Solar Companies

Government policies and incentives for solar energy have evolved significantly in recent years due to a growing emphasis on clean energy. These policies aim to promote renewable energy adoption, reduce greenhouse gas emissions, and promote domestic solar panel manufacturing.

Solar industry and regulations include:

Solar Incentive, Policy, and Regulatory Challenges

The regulatory environment can vary widely by state, town, and utility company, creating challenges for businesses and homeowners looking to invest in solar power. These policies can also have complex implications and be difficult to understand. For example, solar incentives and policies in New Mexico differ from those in North Carolina and Florida.

Frequent solar policy changes and variations in clean energy incentives can create uncertainty for potential solar customers. These changes may disrupt project planning, increase administrative costs, and affect the overall cost-effectiveness of solar installations. Additionally, the complexity of regulations may deter potential customers and increase the time and effort required for compliance.

Solar Industry Regulations & Compliance Solutions

It's crucial to stay current on the latest solar policy developments at the local, state, and federal levels. This may involve regularly checking government websites, subscribing to industry newsletters, learning about changes in permitting requirements, reading the GreenLancer blog, and engaging with solar advocacy groups.

Develop flexible project plans that can adapt to changes in solar policies. For example, consider the potential impact if state rebate funding is exhausted or adjustments to net metering programs. Develop strategies for meeting all new building and electrical code requirements impacting your solar system installations.

2. Talent Acquisition and Solar Workforce Development

The solar industry is growing quickly, and solar companies must keep on top of staffing issues to scale up operations.

Solar Industry Workforce Challenges

The dramatic growth in the solar energy industry has put significant pressure on the labor market because there is a noticeable skills gap within the industry. Attracting and retaining top talent can be challenging due to the specialized nature of the work and the lack of a trained workforce.

Skilled solar professionals are in high demand, and recruiting the right people can be competitive. If your solar company is short-staffed or lacking needed skills, it will decrease your ability to complete projects, provide good customer service, and result in decreased company profits.

PV Workforce Solutions

To attract and retain top talent, solar companies can work with local trade schools that teach applicable skills. Some community colleges and universities offer certifications or degree programs for solar installers, electricians, and solar energy professionals.

Solar installation companies can offer competitive salary packages, health benefits, retirement plans, and other perks to make your company more attractive to prospective employees. Creating a positive work environment that values employee safety, encourages innovation, and fosters a sense of purpose in the transition to clean energy can be beneficial in attracting talent.

Also, offering new employee training, safety, and mentorship programs is critical for hiring unskilled workers. Likewise, providing opportunities, including certifications, workshops, and access to the latest industry knowledge, is essential to advance the skills of existing employees.

Partnering with GreenLancer as a permit drafting and solar engineering resource can help regulate and improve your workflow. It allows you to expand your capabilities at scale without hiring in-house solar designers and engineers. Likewise, our services bring specialized expertise to the table, which can be beneficial for complex solar projects, addressing specific skills gaps, or expanding into new solar markets.

Solar engineering and design services like GreenLancer can also be a valuable resource for handling peak workloads and ensuring projects are completed efficiently and on time. This scalable approach can help you meet deadlines without overburdening your in-house teams, while avoiding layoffs during downturns.

3. PV Tech Advancements and Innovation

Staying current on solar technological advancements and new solar technology is paramount for successful PV companies. It enables your businesses to remain competitive by offering cutting-edge solutions that are more efficient and cost-effective.

Solar Technology Advancement Challenges

Keeping pace with technological innovations is essential for meeting customer demands. Staying informed about new solar and energy storage technologies can provide your company with a significant edge in securing projects and expanding into new markets.

However, adopting new solar technologies can present its share of challenges. The initial costs of integrating innovative technologies and upgrading existing systems can be substantial. Employees may require training to adapt to new solar technologies, and the transition can temporarily disrupt operations and workflow.

How to Promote Innovation Within Solar Companies

Ensuring the compatibility of innovations with current infrastructure can be complex. Effective planning, resource allocation, and a strategic approach to solar technology adoption are vital for overcoming these challenges and realizing the benefits of technological advancements in the PV industry.

Fostering innovation within a solar company is a key strategy to navigate these challenges and harness the advantages of PV tech advancements. Start by creating a corporate culture that encourages and rewards innovation and learning is crucial. Employees should feel empowered to share new ideas and contribute creative solutions.

Next, dedicate time to researching, testing, and implementing new PV or energy storage technologies to stay at the forefront of ever-changing innovation. Many solar manufacturers offer webinars and training sessions on new products, and numerous trade publications and websites highlight innovations.

4. Renewable Energy Supply Chain and Resource Management

The solar energy supply chain involves a complex network of components, from the production of solar panels, storage batteries, and inverters to the installation and maintenance of solar systems.

Solar Supply Chain Challenges

In recent years, global supply chain disruptions, shipping bottlenecks, and resource constraints have become prominent challenges in the solar industry. Factors such as the COVID-19 pandemic, trade tensions, and shortages of critical materials have underscored the importance of a resilient and flexible supply chain. In addition, human rights concerns in sourcing minerals and in the manufacturing of solar panels with forced labor are increasing.

Solutions for Overcoming Solar Equipment Supply Disruptions

Companies operating in the solar sector must carefully monitor and adapt to supply disruptions to ensure an uninterrupted flow of solar panels and components. Perhaps this means procuring solar equipment from various suppliers, using different brands of solar panels and batteries when necessary, or making purchases in advance of project timelines.

Supply chain constraints are diminishing, and increased investment in domestic solar manufacturing investment should start improving solar module supply issues in the next few years. Also, sustainable resource management is crucial to the long-term viability of the solar energy sector.

Given that many resources are finite, such as rare earth materials used in solar panels, companies must embrace sustainable practices. This includes recycling and reusing materials, solar panel manufacturers reducing waste in the production processes and exploring alternative materials that are more readily available.

5. Solar Company Market Competition and Differentiation

Because the solar industry is booming, there are more solar installation companies in operation – everyone wants a piece of the pie.

Solar Market Competition Challenges

Numerous solar installation companies have declared bankruptcy in recent years. High costs of operations can erode profits, especially if customer acquisition costs are high. If companies don’t have a large financial backing to keep them afloat while their profit catches up, they can run into trouble.

PV Companies Branding Solutions

Many companies vie for market share, so it is critical to differentiate your solar business to stand out. One way to achieve this is by building a solid brand and solar marketing presence to generate more high-quality solar leads.

Effective branding and marketing convey your company's unique value proposition, whether it's exceptional customer service, cutting-edge technology, or a commitment to sustainability. A compelling brand story and consistent messaging across various platforms can help you resonate with customers, earn trust, and differentiate your solar company in a crowded market.

To capture new market segments in the solar industry, consider diversifying your offerings. Expanding into emerging niches like community solar projects, off-grid solar, or innovative energy storage solutions can help you reach untapped customer segments. In addition, aligning your services with government incentives and subsidies can open doors to new markets.

Solar Company Adaptability Is Critical

The PV industry is booming, and many solar installers want to grow their businesses, but they have to be aware of the hurdles that come with this complex industry. Addressing these is critical for boosting company revenue and staying competitive.

The biggest roadblock many solar installers face when scaling up is design and engineering. GreenLancer has a qualified network of partners who can seamlessly fit into your existing workflow to fulfill solar permit drafting and engineering to eliminate red tape for getting your projects to PTO.

Sign up for free and get the support of an entire team to help you navigate every tricky AHJ you work with.

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