Solar installers do not usually fail for lack of work. They fail because the money goes out before it comes in. Panels, inverters and wages are paid early, the customer’s balance arrives late, and the STC value sits in the middle waiting for a claim to clear. Here is where to look.
Map the gap
For one typical job, write down the dates: when you pay for stock, when the crew is paid, when the customer pays, and when the STC money lands. The distance between the first outflow and the last inflow is your working capital requirement. Multiply by the number of jobs in flight. Most installers are surprised by the answer.
Deposits and stage payments
Take a deposit when the contract is signed, a second payment when stock arrives or the install starts, and the balance at completion. State rules cap or regulate deposits on residential building work, so check your own. The customer’s STC discount is built into the contract price, so the structure of stages should reflect the discounted figure. See solar installer deposits and the risk to customers for how customers think about it.
Supplier terms
Ask distributors for 14 or 30 day terms once you have a trading history, and early payment discounts if they offer them. Buying in smaller, more frequent batches reduces what you hold. Do not stretch terms past your own receipts, because suppliers react quickly to late payment. Some suppliers also offer certificate-related deals, which change the maths. See supplier offers.
The STC leg
The STC discount is the part you control most. At the time of writing STCs have been roughly $38 to $40, so a typical solar job’s certificate value is a four-figure sum you have already discounted from the customer’s price. Slow settlement turns that into a loan to the market.
- Compare traders on days to pay, not only rate. See 20 days vs 1 day.
- Lodge the day after install, not at month end.
- Lock the rate on lodgement where offered.
- Clean the claim before it goes in. See top rejection reasons.
From the desk: a rejected claim restarts the clock. Cutting resubmissions often helps cash flow more than haggling for a slightly better rate.
Batteries
Battery jobs move more money per install, with the STC discount funded up front. Tiers and the stepping factor change the amount, so check battery rebate cash flow for installers.
What this means for installers
Fix the biggest gap first, usually the certificate settlement, then supplier terms, then deposits. Energy Merchants pays within 24 hours for established partners, with the first claim at 48 to 72 hours. Rates are on pricing, and you can start trading. See also how to improve cash flow as a solar installer, how it works and resources.