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Buying a Solar Installation & Service business
Published · Reviewed by The Diligence Standard Team · Updated
a Solar Installation & Service business can look attractive on a summary P&L while the operating details underneath it change the cash flow, transferability and capital a buyer will actually own. Diligence should connect the reported earnings to the business-specific drivers that create them.
How the business works
Lead generation, finance-partner relationships, backlog quality, permitting/interconnection, install crews and warranty obligations drive economics.
Risks to test
- Policy/incentive changes
- Finance-partner concentration
- Backlog cancellations
- Warranty obligations
- Permit/interconnection delays
- Sales-practice exposure
Evidence to request and reconcile
- Lead/sales funnel
- Signed backlog/cancellations
- Project margins
- Finance partner agreements
- Warranty/service records
- Licenses/permits
Decision questions
- How much backlog will actually install?
- What acquisition cost is required for growth?
- Which finance partners dominate sales?
- What warranty liabilities transfer?
- How dependent is demand on incentives?