How to Sell a Solar Installation Company: Preparing Buyers and Their Lenders
Many buyers of a solar installer finance part of the purchase, so a sale depends not only on finding the right buyer but also on that buyer’s lender being comfortable with the business. Owners who want to sell a solar installation company can improve their chances of a smooth closing by preparing the financial records, backlog details, warranty history, licensing plan and team that buyers and lenders will want to review.
This article is general guidance for owners of existing, operating solar installation and service companies. Every sale is different, and sellers should work with qualified attorneys, accountants, tax advisors and, where appropriate, business brokers or valuation professionals. Nothing here is legal, tax or financial advice.
Start Preparing Early
Time allows an owner to clean up records, document results across different market conditions, reduce dependence on themselves and address issues that could concern a buyer or lender.
Organize the Financial Records
- Several years of tax returns and financial statements that reconcile with each other
- Revenue and gross profit by segment: residential, commercial, storage and service
- Receivables aging and collection history
- Documentation for any personal or one-time expenses you expect a buyer to add back
- A complete schedule of existing debt
Clean, consistent records help buyers and lenders verify earnings. Our guide to solar installation company valuation explains how those earnings are evaluated.
Document the Backlog and Deposits
Prepare a current list of signed contracts with status and deposits collected, reconciled to bank records, along with cancellation history. Buyers will want to understand how deposits will be handled at closing.
Organize Warranty and Service Records
Buyers will ask about warranty terms, callback logs, roof leak claims and monitoring commitments. Organized records reduce uncertainty. See our article on solar workmanship warranties.
Plan for the Licenses
If the company’s contractor or electrical license depends on you, buyers and their lenders will want to know how it will be handled after you leave. Options may include a licensed buyer, a licensed employee or a transition period during which you remain involved, where permitted. See our article on solar installer licensing.
Review Supplier and Program Relationships
Distributor accounts, manufacturer installer-program status and consumer financing arrangements may require consent or new applications after a sale. Identifying those requirements early helps buyers plan.
Reduce Owner Dependence
Buyers place more confidence in a business that can run without its owner. Steps that may help include developing a manager, documenting sales and installation processes and building a stable team of installers and electricians. See our guide to solar installer crew retention.
Prepare for Due Diligence
Buyers will examine financial records, contracts, warranties, licensing, sales practices, crews, insurance and claims. Gathering these materials in advance can reduce delays. Our solar installer due diligence checklist shows what buyers typically request.
Understand What Lenders Need From the Seller
The buyer’s lender may ask for information only the seller can provide, such as tax returns, financial statements, backlog data and licensing details. Some loan programs also have rules about the seller’s continuing involvement after closing. Responding completely helps keep financing on track, though timing depends on the lender and the transaction.
Consider Deal Structure and Seller Financing
Sellers should consider whether they would accept part of the price over time or terms tied to backlog completion or performance. A seller note can help a buyer complete financing. See our article on solar installer seller financing and earnouts.
Protect Customers and Staff During the Sale
Confidentiality matters. Premature news of a sale can unsettle crews, sales staff and customers waiting on installs. Many sellers share information under confidentiality agreements, announce the sale when closing is near and then personally help introduce the new owner.
US Professional Funding helps qualified buyers finance the acquisition of existing, operating solar installation companies, which can help sellers reach a closing. Learn more about our solar business acquisition financing.
