How to Start a Renewable Energy Company

Renewable energy comes in many forms, from solar energy to wind energy to bioenergy. It’s also grown into a huge industry worth more than $1 trillion globally. If you’re interested in helping reduce the use of fossil fuels and CO2 emissions, you could start your own renewable energy company in a variety of ways.

But first, you need to understand the business behind renewable energy. Fortunately, this step-by-step guide details all you need to know to power up your own renewable energy company.

Step 1: Decide if the Business Is Right for You

Pros and cons

Renewable energy industry trends

Industry size and growth

• Industry size and past growth – The global renewable energy industry was worth $1.1 trillion in 2022.((https://www.grandviewresearch.com/industry-analysis/renewable-energy-market))
• Growth forecast – The global renewable energy industry is projected to grow 16.9% annually through 2030.

Trends and challenges

Trends

• Green hydrogen as a source of energy is expected to be one of the next big trends.
• AI is projected to have a major impact on improving energy efficiency. 

Challenges

• Prices for renewable energy solutions are still high, which is a barrier to their widespread adoption.
• Many renewable energy sources require significant land which can be hard to come by.

Demand hotspots

• Most popular states – The most popular states for solar energy specialists are Connecticut, Alaska, and Vermont.((https://www.zippia.com/solar-energy-specialist-jobs/best-states/))
• Least popular states – The least popular states for solar energy specialists are South Carolina, Louisiana, and Montana.

What kind of people work in renewable energy?

• Gender – 27% of solar energy specialists are female, while 73% are male.((https://www.zippia.com/solar-energy-specialist-jobs/demographics/))
• Average level of education – The average solar energy specialist has a bachelor’s degree.
• Average age – The average solar energy specialist in the US is 47.4 years old.

How much does it cost to start a renewable energy business?

The costs of starting a renewable energy company obviously vary based on the type of company you plan to start. Here we’ll discuss starting a solar panel installation company. 

Startup costs for a solar panel installation company range from $90,000 to $170,000. Costs include equipment and an inventory of solar panels.

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$100 - $500	$300
Business licenses and permits	$100 - $300	$200
Insurance	$100-$500	$300
Website	$500 - $1,000	$750
Equipment	$5,000 - $10,000	$7,500
Inventory of solar panels	$50,000 - $100,000	$75,000
Truck	$30,000 - $50,000	$40,000
Space rental	$5,000 - $10,000	$7,500
Total	$90,800 - $172,300	$131,550

How much can you earn from a renewable energy business?

Again, we’ll use a solar panel installation company as an example. 

You’ll charge an average total price of about $15,000 for a residential solar panel system installation. Your profit margin after the costs of materials and labor should be about 10%. 

In your first year or two, you might do five installations a month, bringing in $900,000 in revenue. This would mean $90,000 in profit, assuming that 10% margin. 

As you gain traction, you and your crew might do 15 installations a month. With annual revenue of $2,700,000, you’d make a tidy profit of $270,000.

What barriers to entry are there?

There are a few barriers to entry for a renewable energy company. Your biggest challenges will be:

• Funding the startup costs
• Having the knowledge and skills required

Step 2: Hone Your Idea

Now that you know what’s involved in starting a renewable energy, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research could give you the upper hand even if you’ve got the perfect product. Conducting robust market research is crucial, as it will help you better understand your customers, your competitors, and the broader business landscape.

Analyze your competitors 

Research renewable energy companies to examine their products and services, price points, and customer reviews.

• Make a list of renewable energy companies that offer similar products or services. 
• Review your competitors’ products – their features, pricing, and quality – and marketing strategies.
• Check out their online reviews and ratings on Google, Yelp, and Facebook to get an idea of what their customers like and dislike.
• Identify your competitors’ strengths and weaknesses. 

This should identify areas where you can strengthen your business and gain a competitive edge to make better business decisions.

Why? Identify an opportunity

You’re looking for a market gap to fill. For instance, maybe the local market is missing an energy efficiency consulting company or a wind energy company.

What? Determine your products or services

Your products and services will depend on the niche you choose in the renewable energy market. 

Here’s a list of opportunities for renewable energy companies:

1. Solar Panels: Convert sunlight directly into electricity using photovoltaic cells.
2. Wind Turbines: Harness wind energy to generate electricity.
3. Energy Storage Solutions: Batteries and other systems that store excess renewable energy for later use.
4. Smart Grid Solutions: Advanced energy management systems that integrate renewable sources into the grid efficiently.
5. Microgrid Systems: Localized grids that can operate autonomously from the main grid, often powered by renewables.
6. Green Hydrogen Production Equipment: Systems that use renewable energy to produce hydrogen from water.
7. EV Charging Stations: Infrastructure that provides electric vehicle owners with the power to recharge, ideally sourced from renewables.
8. Offshore Wind Installations: Wind turbines specifically designed to operate in maritime environments.
9. Project Financing Services: Financial services tailored for the development and expansion of renewable energy projects.
10. Consultancy and Advisory Services: Expert guidance on renewable project feasibility, design, installation, and maintenance.
11. Training and Certification Programs: Courses and certifications for professionals in the renewable energy sector.
12. Recycling and Disposal Services: Solutions for the responsible end-of-life management of renewable energy infrastructure.
13. Renewable Energy Software: Software for monitoring, managing, and optimizing renewable energy installations.
14. Bioenergy Systems: Equipment and technology for generating energy from organic materials.
15. Tidal and Wave Energy Installations: Technologies that capture energy from ocean tides and waves.

How much should you charge for renewable energy products and services?

Your prices should be based on market prices for the products and services you offer, but also on your costs.

Once you know your costs, use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will also be based on your niche. Millennials tend to be most interested in renewable energy, so you should likely focus your marketing on sites like Instagram and Facebook.

Where? Choose a location for your renewable energy business

Choosing the right location for a renewable energy business is a critical decision influenced by the specific niche of the enterprise. For instance, a business focused on harnessing solar energy should prioritize regions with consistent sunlight, ensuring optimal energy generation.

On the other hand, a wind energy venture would thrive best in areas known for sustained wind speeds. Tidal and wave energy operations necessitate proximity to the ocean, while bioenergy companies benefit from being close to raw material sources like agricultural areas.

Conversely, businesses focused on sales, consulting, or software solutions for renewable energy may prioritize accessibility to major commercial centers or tech hubs to cater to a broader clientele and tap into talent pools.

Regardless of the niche, it’s also important to consider local regulations, incentives, and the overall business environment of a potential location, as these factors can significantly impact operational costs and success.

Step 3: Brainstorm a Renewable Energy Company Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “renewable energy” or “energy efficient”, boosts SEO
• Name should allow for expansion, for ex: “Green Horizon” or “Eco Expand” over “Solar Sage” or “Wind Wise”
• Avoid location-based names that might hinder future expansion
• Use online tools like the Step by Step Business Name Generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead and reserve your business name with your state, start the trademark registration process, and complete your domain registration and social media account creation. 

Your business name is one of the key differentiators that sets your business apart. Once you pick a name, reserve it and start with the branding, it’s hard to switch to a new name. So be sure to carefully consider your choice before moving forward. 

Step 4: Create a Renewable Energy Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• Executive Summary: Provide a concise summary of your renewable energy business plan, outlining its goals, target market, and expected environmental impact.
• Business Overview: Describe your renewable energy venture, including the type of renewable energy sources (solar, wind, hydro, etc.) you will focus on, the geographic scope of your operations, and your commitment to sustainability.
• Product and Services: Detail the renewable energy products and services you offer, such as solar panel installations, wind turbine maintenance, energy consulting, or green energy certification.
• Market Analysis: Analyze the renewable energy market, including current demand, growth prospects, government incentives, and the shift toward clean energy solutions.
• Competitive Analysis: Identify key competitors in the renewable energy sector and highlight your competitive advantages, such as cutting-edge technology, cost-efficiency, or superior customer service.
• Sales and Marketing: Explain your strategies for selling renewable energy solutions, including sales channels, marketing campaigns, partnerships with environmental organizations, and educational initiatives.
• Management Team: Introduce your team members, emphasizing their expertise in renewable energy technology, project management, or environmental policy.
• Operations Plan: Describe the day-to-day operations of your renewable energy business, including project development, installation processes, maintenance, and quality control.
• Financial Plan: Present financial projections for your renewable energy business, including startup costs, revenue forecasts based on project contracts, pricing models, and expected profitability.
• Appendix: Include supporting documents such as project case studies, environmental impact assessments, certifications for renewable energy installations, and references from satisfied clients.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to renewable energy companies. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your renewable energy company will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts. Here’s how to form an LLC.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation. Read how to start a corporation here.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have. 

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Venture capital: Venture capital investors take an ownership stake in exchange for funds, so keep in mind that you’d be sacrificing some control over your business. This is generally only available for businesses with high growth potential.
• Angel investors: Reach out to your entire network in search of people interested in investing in early-stage startups in exchange for a stake. Established angel investors are always looking for good opportunities. 
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a renewable energy business. You might also try crowdfunding if you have an innovative concept, or you may be able to attract angel investors or venture capital. 

Step 8: Apply for Renewable Energy Business Licenses and Permits

Starting a renewable energy business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your renewable energy business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.  

Field service management software, such as ServiceTitan, Jobber, or Field Nation, will enable you to manage your field service crew and oversee client management, scheduling, invoicing, task allocations, payroll, and re-organizing.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Create a website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

Your customers are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. 

Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Schedule Now” or “Order”. This can sharply increase purchases. 

Marketing

Here are some powerful marketing strategies for your future business:

1. Educational Content Marketing: Develop content that educates your target audience about the benefits of renewable energy, including blog posts, infographics, and video tutorials, to position your company as an authority in the field.
2. Community Partnerships: Forge partnerships with local community organizations, schools, and environmental groups to sponsor events or workshops, fostering goodwill and increasing brand visibility.
3. Government Incentive Awareness: Stay updated on government incentives and subsidies for renewable energy projects, and actively promote these opportunities to potential customers to drive interest and accelerate conversion.
4. Social Media Challenges: Create engaging challenges on social media platforms, encouraging users to share their sustainable practices and experiences, helping to build a community around your brand and increase organic reach.
5. Testimonials and Case Studies: Collect and showcase success stories from your renewable energy projects, emphasizing cost savings, environmental impact, and overall satisfaction to build trust and credibility.
6. Mobile Exhibits: Invest in a mobile exhibit showcasing renewable energy solutions and technologies, allowing you to take your products directly to potential customers at events, fairs, and community gatherings.
7. Strategic Alliances: Form alliances with complementary businesses, such as construction firms or home improvement services, to create bundled offerings that provide customers with a comprehensive renewable energy solution.
8. Leverage Influencers: Collaborate with influencers and thought leaders in the sustainability space to promote your brand, leveraging their credibility to reach a wider audience and gain trust.
9. Green Certification: Obtain and prominently display certifications for eco-friendly and sustainable practices, assuring customers that your company is committed to environmental responsibility.
10. Interactive Workshops: Host interactive workshops or webinars to demonstrate the practical aspects of renewable energy solutions, allowing potential customers to experience the benefits firsthand and ask questions in real-time.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your renewal energy company meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your renewable energy business could be: 

• Powering the future sustainably with innovative renewable energy solutions
• Unlocking the potential of clean energy for a greener tomorrow
• Harnessing nature’s power to create a cleaner and brighter world

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a renewable energy business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in renewable energy for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in renewable energy. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

Building a team for a renewable energy company is an intricate process, deeply rooted in the specific type of business and its operational model. Different segments of the renewable sector necessitate distinct expertise and roles.

For instance, a solar panel installation business will require skilled technicians familiar with solar systems, while a bioenergy firm might need experts in biochemistry and agricultural processes. An offshore wind energy venture would seek marine engineers and workers accustomed to offshore conditions. In contrast, a renewable energy consulting firm would emphasize hiring analysts, market researchers, and industry experts.

However, despite these niche requirements, there are several common roles across the renewable energy spectrum:

1. Project Managers: Professionals who oversee the completion of projects, ensuring they are on time, within scope, and within budget.
2. Engineers: Depending on the specific industry, this could include electrical engineers, mechanical engineers, and civil engineers.
3. Technicians: Hands-on workers trained to install, maintain, and repair renewable energy systems.
4. Research and Development Specialists: Innovators focused on improving current technologies or developing new solutions.
5. Sales and Marketing Professionals: Those responsible for promoting the company’s services or products and forging relationships with customers.
6. Environmental Consultants: Experts who ensure that projects comply with environmental regulations and are sustainable.
7. Financial Analysts: Professionals who handle budgets, forecasts, and the financial viability of projects.
8. Regulatory and Compliance Officers: Individuals who understand the complex landscape of energy regulations and ensure company adherence.
9. Operational and Maintenance Staff: For day-to-day functioning and upkeep of installations.

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a a Renewable Energy Company – Start Making Money!

Renewable energy is the future, with the industry taking off as efforts increase to slow climate change. If you want to have a positive impact on the environment, you could start a renewable energy company in whatever niche you choose. In an industry worth $1 trillion and counting, you’ll also reap financial rewards. 

You understand the business now, so you’re ready to develop your concept and get your renewable energy company going!