How to start a solar installation company

This guide covers opening a residential solar installer in the US in 2026: the tax rules after the homeowner credit ended, state licenses and the newer rules on solar sales, interconnection, financing, safety and the first customers. The fact that changes most plans: the 30% homeowner credit is gone for systems installed after December 31, 2025, while Texas began requiring solar sellers to register with TDLR on September 1, 2026, so both the pitch and the paperwork have changed.

By Niomi AscotUpdated October 3, 202616 min read

Homeowner credit: Section 25D is not allowed for systems whose installation was completed after December 31, 2025
Leases and PPAs: The 48E business credit ends for solar placed in service after 2027 unless construction began by July 4, 2026
Texas: Solar retailers and salespeople register with TDLR from September 1, 2026; installs need a licensed electrical contractor
California: C-46 Solar or C-10 Electrical license; CPUC guide Version 4 for contracts signed from December 15, 2026
Market: 995 MWdc of residential installs in Q2 2026, the lowest quarter in five years (Wood Mackenzie and SEIA)
NABCEP PVIP: Voluntary: 58 hours of training, 6 project credits and OSHA 10; valid three years

What a residential solar company sells, and the models

California’s C-46 license states the work: a solar contractor “installs, modifies, maintains, and repairs thermal and photovoltaic solar energy systems,” and may not take on other building trades “except when required to install” the system (California CSLB, C-46).

The business models, from what we see in the trade:

Installer that sells direct, for cash, on a loan or as the installer for a lease or PPA provider.
A sales company that subcontracts the install. The CFPB found that “Solar salespeople commonly make their first contact with potential customers via a door-to-door introduction,” and that salespeople, installers and solar lenders often have agreements that put an instant loan offer on the same tablet as the contract (CFPB, solar financing). Texas now regulates this model by name.
Subcontract installer for national lease and PPA providers.
An electrical contractor adding solar and storage. In Texas and Minnesota a licensed electrical contractor has to perform the install anyway, which makes this the shortest path for an electrician.

How homeowners pay has been shifting. The same CFPB report found cash bought just 19 percent of the at-home residential market in 2023, loans 58 percent and third-party ownership 23 percent, and cited an average installation cost of “approximately $25,000.” Since the homeowner credit ended, Wood Mackenzie reports installers “shifting from cash and loans sales to third-party ownership” (Wood Mackenzie, September 2026).

The market in 2026, pay and the labor pool

You would be opening into a contraction. Wood Mackenzie and SEIA put new residential installations at 995 MWdc in the second quarter of 2026, “the segment’s lowest quarterly total in five years,” and expect a 23 percent drop for the year (Wood Mackenzie, September 2026, above). Wood Mackenzie expects residential recovery in 2027, “supported by third-party ownership models, rising retail electricity rates, and safe-harbored project pipelines” (Wood Mackenzie’s June 2026 outlook, listed in the sources). The EIA forecasts average residential electricity at 18.20 cents per kWh in 2026 and 18.59 in 2027, up from 17.30 in 2025 (EIA Short-Term Energy Outlook), and with the credit gone, the bill is the case for buying.

Census has no solar business code, so no clean count of competing installers exists. O*NET’s Solar Photovoltaic Installers profile shows a 2025 median of $25.55 an hour or $53,140 a year, 28,600 employed in 2024, growth of 7 percent or more projected for 2024 to 2034 and 4,100 openings. That growth comes off a small base and includes utility-scale and commercial work. Crew leads and field supervisors fall under Solar Energy Installation Managers, where O*NET reports the parent group’s 2025 median of $79,920.

Federal tax rules after the homeowner credit

25D is over. The IRS says the Residential Clean Energy Credit “is not available for any property placed in service after December 31, 2025” (IRS, 25D). Paying early did not save it: “If installation is completed after December 31, 2025, the expenditure will be treated as made after December 31, 2025,” which prevents the claim (IRS FAQs on Public Law 119-21). Customers whose systems went in during 2025 claim it on Form 5695 for the year of installation (IRS, 25D).

48E, the business credit behind leases and PPAs, has a deadline. IRS Notice 2025-42 ends the 45Y and 48E credits for a solar facility “placed in service after December 31, 2027” when construction begins “after July 4, 2026” (IRS Notice 2025-42). Construction is shown by the “Physical Work Test,” and the five percent safe harbor survives only for a low output facility of no more than 1.5 megawatts AC. The notice does not discuss residential leases; the point that third-party-owned home systems rely on this credit comes from industry analysis such as Wood Mackenzie’s.

Which leases a newer bar reaches is a reading, not guidance. The Form 3468 instructions say that for tax years starting after July 4, 2025, no credit is allowed for property described in section 25D(d)(1) or (4) “if the taxpayer rents or leases such property to a third party” (IRS, Form 3468 instructions). In the statute, (d)(1) is solar water heating property and (d)(4) small wind, while solar electric property is (d)(2) (26 U.S.C. 25D). The research behind this guide reads the two together as barring the credit on leased solar water heaters and small wind but not on leased rooftop panels. That is one researcher’s reading of two documents, not an IRS ruling on residential leases, so a tax adviser must confirm it before it shapes a product, a price or an ad.

On financing, the CFPB found dealer fees that “can increase the loan principal by 30 percent or more above the cash price” and criticized credit pitches made “with a presumption of universality” (CFPB, above). Minnesota’s attorney general alleged in 2024 that customers of four solar lenders paid “up to 36% more” for financing (Minnesota AG complaint).

Licensing and certification

No federal license covers solar installers. States license the work through a solar classification, through electrical licensing or both, and more of them now regulate the sale separately from the install.

State licensing and sales rules for solar

State	Who issues it	What you need	Key requirements, as the agency states them
California	Contractors State License Board	C-46 Solar or C-10 Electrical	Jobs needing a permit or reaching $1,000; four years of journey-level experience; asbestos open-book exam; $25,000 bond; every salesperson registered
Texas	Department of Licensing and Regulation	Electrical contractor license to install; solar retailer and salesperson registration to sell	Contracts since September 1, 2025 name the licensed electrical contractor and allow five business days to cancel; registration from September 1, 2026
Florida	Construction Industry Licensing Board	Certified or registered solar contractor, or another license whose scope covers the work	Four years of experience with one as a foreman; FICO 660 or a 14-hour course; $100,000 public liability and $25,000 property damage
Arizona	Registrar of Contractors, under A.R.S. 44-1762	Solar contractor license plus the general license suited to the device	Exam where the registrar has adopted one; statutory warranties; installer answers for roof damage it causes
Minnesota	Department of Labor and Industry	Residential building contractor or remodeler license to sell; licensed electrical contractor to install	Required since July 1, 2023, which lets homeowners claim against the Contractor Recovery Fund

Fees and dates are as of October 2026. Solar rules move faster than most trades’, so confirm each one with the agency in its row before you sign customers, and ask the local building department which permits a rooftop system needs.

California. A C-10 electrical contractor may “perform any solar projects that generate, transmit, transform, or utilize electrical energy” (CSLB Solar Smart, above), and the C-10 definition names “solar photovoltaic cells” (CSLB, C-10). Either license needs four years of experience in the class, up to three of which can come from training (CSLB experience), applicants 18 or older and the asbestos exam (CSLB, before applying). The fee schedule lists $450 to apply, $200 or $350 for the two-year initial license and $49 in fingerprint processing, plus a $25,000 bond (CSLB, issuing your license). The license number belongs in “all forms of advertising” (Cal. Bus. & Prof. Code 7030.5).

California regulates the sale in three more ways:

Salespeople register. Anyone selling home improvement contracts for a licensed contractor registers with CSLB “regardless of the dollar amount of those contracts” (CSLB, HIS registration), at $200 per application.
The disclosure document. Before a sale, financing or lease closes, the company provides the Solar Energy System Disclosure Document, “printed in boldface 16-point type” on the front page of the contract and covering costs, anticipated savings and the assumptions behind them; contract and disclosure are written in the language principally used in the sales presentation, and CSLB posts versions for 3-day and 5-day cancellation rights in English and Spanish (CSLB Solar Smart).
The CPUC guide. Providers connecting customers of PG&E, SCE, SDG&E, Bear Valley, PacifiCorp and Liberty collect the customer’s initials and signature on the California Solar Consumer Protection Guide, in the language of first contact, and applications with contracts “signed on December 15, 2026, or after, must include Version 4” (CPUC consumer protection guide).

CSLB received 2,263 solar complaints from July 2022 to June 2023; of 1,625 investigated, 1,232 concerned workmanship or abandonment and 323 misrepresentation or fraud, and its solar restitution program no longer accepts new claims (CSLB Solar Smart).

Texas. The Residential Solar Retailer Regulatory Act, Occupations Code Chapter 1806, took effect in stages (TDLR, September 2025). Since September 1, 2025, sale and lease contracts must state that a licensed electrical contractor will do the installation and give that contractor’s “name and license number,” say who obtains permits and the utility’s interconnection approval, require an affiliated or referred lender to cancel the loan if the agreement is cancelled, and allow cancellation “on or before the fifth business day.” Since September 1, 2026, people selling or leasing most residential systems, and their companies, must hold a TDLR registration. Electrical contractors and their employees are exempt from registering but must comply with most of the act. TDLR’s program page showed no registration fee when the research was done, so check it there. The state’s consumer brochure tells homeowners not to hire “an unlicensed solar installer or unlicensed electrician” (TDLR consumer brochure).

Florida. A solar contractor installs, repairs and replaces “solar panels for potable solar water heating systems, swimming pool solar heating systems, and photovoltaic systems,” and other certified or registered contractors need not hold the solar license for work within their own scope (Fla. Stat. 489.105). Eligibility includes four years of experience with one as a foreman, or a degree route (Fla. Stat. 489.111); solar contractors carry $100,000 and $25,000 in liability coverage (R. 61G4-15.003); and a score under 660 FICO means a 14-hour course (R. 61G4-15.006). The license number goes on every offer, bid, contract and ad (Fla. Stat. 489.119).

Arizona. Beyond the solar contractor license, an installer needs “the general license that is appropriate to the type of solar energy device” (A.R.S. 44-1762). The same statute requires a warranty of at least two years on collectors, storage and installation, or an energy production guarantee, and at least one year on the rest. Before a roof install the contractor evaluates the roof and recommends an inspection by a licensed roofing contractor, and by installing is “deemed to have accepted the roof surface” and must repair damage the installation causes. Agreements allow rescission for at least three business days and before installation, and disclose “all current tax incentives and rebates” used in the price (A.R.S. 44-1763). Arizona’s license class codes and fees could not be verified for this guide; get them from the Registrar of Contractors.

Minnesota. Since July 1, 2023, companies contracting with homeowners to install solar PV “must be licensed as a residential building contractor or remodeler,” and “The actual installation of the solar PV system must be performed by a Minnesota-licensed electrical contractor” (Minnesota DLI).

NABCEP certification

NABCEP “issues voluntary credentials.” Its PV Installation Professional certification requires at least 58 hours of advanced training, 40 of them with an accredited provider, installations worth at least 6 project credits and OSHA 10 for construction, and it is valid for three years (NABCEP handbook). Newer installers can start on the Board Eligible pathway.

Interconnection

Every grid-tied system needs the utility’s approval. In California, Rule 21 sets interconnection, operating and metering requirements, and each investor-owned utility “maintains its own version of the rule” (CPUC, Rule 21); new applications since April 15, 2023 go on the Net Billing Tariff, which the CPUC says “financially incentivizes customers to install battery storage” (CPUC, Net Billing Tariff). Florida sorts systems into tiers, and for Tier 1, 10 kW or less, investor-owned utilities may not require liability insurance or charge extra fees, and inverter-based systems are exempt from the manual disconnect switch unless the utility pays for it (Fla. Admin. Code R. 25-6.065).

Setting up the company

Entity and tax ID. The SBA says an LLC protects personal assets “in most instances,” and an EIN from the IRS is free.

Insurance. Employers carry workers’ compensation, unemployment and disability insurance (SBA, business insurance), and Google’s Solar energy contractor screening asks for general and professional liability (Google Local Services requirements). Every install puts holes in a roof, so in our experience completed operations coverage deserves a close read when you buy the policy.

Workers’ compensation: California requires it with even one employee, and neither C-46 nor C-10 is on the list that must carry it with none (CSLB workers’ compensation); Florida makes a construction business with one employee an employer (Fla. Stat. 440.02); Texas leaves most private employers to choose (Texas Department of Insurance).

Sales reps. Solar reps are often paid by commission, and the IRS can hold a company liable for employment taxes on a worker treated as a contractor with no reasonable basis. In California and Texas the rep’s registration status is now part of hiring.

Equipment, software and suppliers

What a new installer usually needs, from experience rather than a published list:

Access and safety: ladders, a hoist or lift for modules, roof anchors and harnesses, and electrical PPE.
Roof and electrical: attachment and flashing kits, conduit and wire stock, and test meters.
Software: design and production modeling, proposals that show the cash price beside any financing, permit and interconnection tracking, and monitoring for service calls.
Suppliers and partners: a solar distributor for modules, inverters and batteries, and one or more lenders or lease providers.
Paperwork kits by state: the California disclosure and CPUC guide, the Texas contract terms and five-day notice, Arizona’s warranty and roof evaluation.

Pricing, financing and cancellation windows

No public source with a stated method gives solar startup costs or a typical price per watt, so none appears here; the SBA’s startup cost checklist lists the categories. In practice systems are priced by size in watts, with adders for roof type, main panel upgrades and batteries.

The FTC tells homeowners their options “include buying a system, leasing a system, or signing an agreement to buy solar power,” that a system “is designed to stay on a home for at least 20 years,” and that PACE financing places “a property tax lien” on the home (FTC, solar power for your home). On loans, the CFPB found terms “typically range from 8 to 25 years” while loans are usually repaid in 7 to 9 years through prepayment, and that lenders “commonly file UCC liens on the solar panels” (CFPB, above). Show the cash price next to every monthly figure.

Cancellation windows decide when you can order equipment and start work:

Federal: until midnight of the third business day after an in-home sale, with “Two copies of a cancellation form” (FTC Cooling-Off Rule).
Texas: five business days after the agreement is executed (TDLR).
Arizona: at least three business days, and before installation (A.R.S. 44-1763).
California: CSLB tells consumers not to let construction begin during the three-day rescission period (CSLB Solar Smart), and home improvement down payments are capped at $1,000 or 10 percent, “whichever amount is less” (Cal. Bus. & Prof. Code 7159.5).

Hiring and keeping crews safe

On O*NET, 37 percent of PV installers surveyed said a post-secondary certificate is required and 34 percent a high school diploma. Where an electrical contractor must perform the install, as in Texas and Minnesota, the hiring plan starts with a licensed electrician. A registered apprentice logs at least 2,000 hours on the job, with 144 hours of yearly instruction recommended (29 CFR 29.5).

Electrical and fall hazards. OSHA lists “arc flashes (which include arc flash burn and blast hazards), electric shock, falls, and thermal burn hazards,” and says grid-connected solar employers may need the safe work practices and training of the power generation standard, 29 CFR 1910.269 (OSHA, solar).
Six feet. Residential construction workers 6 feet or more above a lower level need guardrails, nets or personal fall arrest (29 CFR 1926.501(b)(13)), and fall protection topped OSHA’s citation list in fiscal year 2025, with construction ladders third (OSHA top 10 cited standards).

Finding the first customers

Google Business Profile. A virtual office is not eligible (Google Business Profile guidelines), and a service-area installer can list up to 20 areas within about two hours’ drive (Google, service areas).

Local Services Ads. “Solar energy contractor” is a US category whose description covers “solar system installation, repair, and monitoring.” Screening asks for general and professional liability insurance, state business and owner licenses where they apply and background checks for select users, and averages 3 to 4 weeks (Google Local Services requirements, above). Solar was not named in the first phase of Google’s move of these ads into Google Ads, which began in August 2026 (Google Ads, Local Services migration).

Financing ads. Google bars age, gender, parental status, marital status and ZIP code targeting for consumer finance ads such as loans in the US (Google Ads policy), so a solar loan campaign may be held to the same limits.

Incentives. Before advertising a rebate, check it in DSIRE, run by the N.C. Clean Energy Technology Center at NC State, then confirm it with the utility or agency.

Reviews and referrals. BrightLocal’s 2026 survey found 47 percent of consumers will not use a business with fewer than 20 reviews (BrightLocal Local Consumer Review Survey 2026), and the FTC’s 2024 rule bans rewards tied to a positive review. The FTC also tells homeowners never to deal with a company “that pressures you for a quick decision” (FTC, solar power for your home), so a patient proposal is a sales tool. In our experience the best early referrers are customers whose first lower bill has arrived, electricians, and roofers, whom Arizona’s roof inspection recommendation already puts in the conversation.

When the company is open, our page on marketing for residential solar installers covers the pitch after the credit and the channels that install. Local search and review requests are where a new installer starts.

What trips up new solar companies

Selling a credit that ended. 25D does not cover systems installed after December 31, 2025, and the business credit belongs to the lease or PPA owner, never the homeowner.
Workmanship and abandonment. They made up 1,232 of CSLB’s 1,625 investigated solar complaints, and its restitution fund is closed to new claims.
Hidden financing cost. Dealer fees of 30 percent or more drew CFPB criticism and a Minnesota lawsuit.
Old paperwork. A California contract signed on or after December 15, 2026 needs Version 4 of the CPUC guide, and a Texas seller without a TDLR registration is out of compliance.

Questions people ask before starting a solar installation company

What license do you need to install solar panels?

It depends on the state: California accepts a C-46 Solar or C-10 Electrical license, Florida a solar contractor license or another license covering the work, Arizona a solar contractor license plus the matching general license, and Texas and Minnesota require a licensed electrical contractor to do the install. Minnesota also requires the selling company to hold a residential building contractor or remodeler license.

Can homeowners still get the 30% solar tax credit?

No, not for a system they buy that was installed after December 31, 2025, when section 25D ended. Lease and PPA owners may claim the 48E business credit for solar placed in service by December 31, 2027, or later if construction began by July 4, 2026, and a tax adviser should approve any credit wording.

Do solar salespeople need a license in Texas?

Yes, since September 1, 2026, people who sell or lease most residential solar systems, and the companies they work for, must register with TDLR. Electrical contractors and their employees are exempt from registering but must follow most of the law.

Is NABCEP certification required?

No, it is voluntary. The PV Installation Professional credential requires 58 hours of advanced training, 6 project credits and OSHA 10, and lasts three years.

How long do solar customers have to cancel?

Three business days under the FTC rule for in-home sales, five business days in Texas, and at least three business days and before installation in Arizona. California’s disclosure document comes in versions for 3-day and 5-day cancellation rights.

What does California require when a solar contract is signed?

The CSLB disclosure document on the front page in 16-point bold type, in the language of the sales presentation, and for customers of the large utilities a signed and initialed CPUC Consumer Protection Guide. Contracts signed from December 15, 2026 need Version 4 of the guide.

Sources

Checked on October 3, 2026. Rules and fees change, and many are set state by state or city by city: confirm the current requirements with the agency that issues them before you apply.

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