If you are wondering how to start solar business in India in 2026, the path is clear: choose a business model, register your firm (GST, Udyam), get a state electrical contractor licence, register as a PM Surya Ghar vendor, and line up suppliers for DCR modules and BIS-compliant inverters. This guide walks through each step, the cost heads to plan for, and the mistakes that hurt new installers.
Why a rooftop solar business makes sense right now
Residential rooftop demand is being pulled along by PM Surya Ghar: Muft Bijli Yojana. According to MNRE, over 1 crore households had registered on the National Portal and more than 33 lakh rooftop systems had been installed by May 2026, with over 65 lakh applications in the pipeline. The scheme runs until FY 2026-27, so watch for announcements on what comes after.
For installers, the scheme design matters more than the headline numbers. The consumer picks any vendor registered on the National Portal and agrees a price directly with that vendor. There is no DISCOM tender or rate discovery for this route. So a small, well-run local installer can compete with large companies on service, speed and trust.
The portal also shows vendor ratings and consumer feedback. Your reputation is visible from day one.
Choose your solar business model
The first real decision in how to start solar business in India is which role you want to play. Settle this before writing a solar business plan, because each model needs different capital, skills and paperwork.
| Model | What you do | Capital need | Control over pricing |
|---|---|---|---|
| Installer / solar EPC business | Sell, design, procure, install, handle net metering and subsidy paperwork, maintain | Highest | Full |
| Channel partner / solar dealership | Sell a manufacturer's or distributor's products; installation may be done by you or a partner | Medium | Partial |
| Solar franchise | Operate under a brand's name, process and supply chain in a set territory | Medium (plus franchise fees, if any) | Limited |
| O&M service | Cleaning, inspection, fault repair and performance checks for existing systems | Lowest | Full, but lower ticket size |
Many owners start as a channel partner or O&M provider to learn the trade, then move to full EPC once they have licences and a trained crew. O&M is not a side hustle either. A CEEW report launched at an MNRE event in June 2026 called residential rooftop maintenance a multi-billion market opportunity.
A few states also run utility-led aggregation (ULA) projects, where the DISCOM or a state agency buys installations in bulk through tenders. That is a separate, tender-driven route with its own eligibility rules. Most new installers start with direct residential sales.
Licence for solar business: registrations you need
Exact documents vary by state. Treat this as the typical list and confirm locally, as of September 2026.
1. Business entity, PAN and bank account
Proprietorship is fastest. Partnership, LLP or private limited company makes it easier to bring in partners and raise loans. MNRE's vendor declaration format asks for the firm's legal status, PAN and GSTIN, so set these up properly first.
2. GST registration
Register on the GST portal. Since 22 September 2025, GST on solar modules and other renewable energy devices has been 5% (down from 12%). Invoicing for installation contracts has its own rules on how goods and services are treated, so get a CA to set up your invoice formats from the first job.
3. Udyam (MSME) registration
Udyam registration is free and online. It makes it easier to access MSME-focused bank loans and government support schemes.
4. Electrical contractor licence
This is the licence most people forget. Regulation 31 of the CEA (Measures relating to Safety and Electric Supply) Regulations, 2023 says electrical installation work must be done by an electrical contractor licensed by the State Government, supervised by a person holding a certificate of competency, and carried out by workmen holding a permit. In most states you apply through the state Electrical Inspectorate or Electrical Licensing Board. Grades, fees and experience rules differ by state.
5. PM Surya Ghar vendor registration and DISCOM empanelment
Only registered vendors can install systems that get central subsidy. You can register at state level with the state's nodal DISCOM or agency, or at national or multi-state level with REC Limited, the National Programme Implementation Agency. A performance bank guarantee (PBG) is part of registration. Under MNRE's earlier simplified procedure it was ₹2.5 lakh valid for five years. Confirm the current amount with your nodal agency. Our PM Surya Ghar vendor registration guide covers the steps.
Build your team and skills
A small rooftop solar business usually needs a salesperson (often the owner), a site surveyor or designer, a licensed supervisor, and an installation crew of two to four people. MNRE's older vendor declaration format asked for at least three trained technical staff, which is a sensible minimum anyway.
For training, look at the Suryamitra Skill Development Programme run by the National Institute of Solar Energy (NISE) under MNRE. It is a 600-hour residential course for ITI or diploma holders in trades such as electrical, electronics, fitter and mechanical, with certification through the Skill Council for Green Jobs. Check the NISE site for current batches and eligibility.
Safety training is not optional. Rooftop work means working at height and with live DC. Budget for harnesses, insulated tools and regular toolbox talks.
Sourcing: ALMM, DCR modules and inverters
Your supplier choices decide whether your customer gets the subsidy at all.
- Modules: PM Surya Ghar requires DCR modules (Indian-made panels from Indian-made cells). Using non-DCR modules anywhere in the system makes it ineligible for central subsidy.
- ALMM: MNRE's Approved List of Models and Manufacturers applies to government schemes, net-metering and rooftop projects. List-I covers modules. List-II covers cells and applies to such projects from 1 June 2026, subject to MNRE's exemptions. Check the latest lists on the MNRE site before every big purchase.
- Inverters: Must comply with the Quality Control Order for solar inverters and the BIS/IEC standards listed in the scheme's minimum technical specifications.
- Balance of system: Mounting structures, DC/AC distribution boxes, cables, earthing, lightning and surge protection, all as per MNRE specifications.
Start with one or two authorised distributors instead of chasing the lowest quote every week. Consistent stock, warranty support and credit terms matter more when you are small.
How much capital do you need?
There is no honest single number. It depends on your model, city and how many jobs you run at once. Plan for these cost heads:
- Registration and professional fees (CA, licence applications)
- Performance bank guarantee for vendor registration (often backed by a fixed deposit or bank limit)
- Tools and test equipment: multimeter, clamp meter, insulation tester, earth resistance tester, drills, crimping tools
- Safety gear and insurance
- A vehicle for material and crew
- Stock or supplier advances for modules, inverters and structures
- Marketing: local ads, signage, a simple website, sample proposals
- Working capital to carry several projects while waiting for inspection and customer payments
Working capital is the one that catches people out. Under PM Surya Ghar the subsidy goes to the consumer's bank account, not to you. So agree clear payment milestones with every customer.
Getting your first customers
- Start local: friends, family, housing societies and shop owners in your area. Early installations close to your base are easier to service.
- Keep your National Portal profile complete: consumers can compare vendors and send enquiries there. Reply quickly.
- Show the numbers: walk each lead through subsidy, savings and payback using their actual electricity bill. A free rooftop solar subsidy and savings calculator makes this quick on a first visit.
- Referrals: ask every happy customer for two names, and send them a photo of their commissioned system to share.
- Electricians and builders: they meet homeowners before you do. A fair referral arrangement works well.
Our sales playbook for installers covers follow-ups and objection handling in more detail.
Pricing and margins
Under PM Surya Ghar, price is agreed between you and the consumer, and the scheme guidelines provide for MNRE to publish indicative component costs so consumers are not overcharged. Build your price from the bottom up: equipment, structure and BoS, labour, transport, paperwork time, the 5-year maintenance obligation, warranty risk, and your overhead. Then add a margin.
Undercutting local competitors is the fastest way to go broke. Margins in a solar installation business come from doing jobs right the first time, cutting DISCOM rework, and winning referrals. A clear, itemised quote builds trust. See our solar quotation format for a template.
Operations: from site survey to O&M
- Site survey: roof area, shade, structure strength, orientation, sanctioned load, meter location.
- Design: size the system from the bill, lay out modules, prepare the single-line diagram (SLD) and structure drawing.
- Application: the consumer applies on the National Portal and selects you as vendor. Under the Electricity (Rights of Consumers) Rules, systems up to 10 kW are deemed technically feasible, and MNRE says auto load enhancement up to 10 kW is in place.
- Installation: as per MNRE minimum technical specifications, with proper earthing and protection.
- Portal update: system details, serial numbers, warranty cards and geo-tagged photos are uploaded; you can assist the consumer.
- DISCOM inspection and net metering: the DISCOM inspects, installs the net meter and approves the claim. Read our net metering process guide for documents.
- Subsidy: MNRE says the subsidy is typically processed in about 15 days once the details are correct.
- O&M: scheduled visits, cleaning guidance, fault response, and monitoring through the inverter app for 5 years.
Software and tools stack
You do not need expensive software on day one, but you do need a system:
- Lead tracking: a CRM or at least a shared sheet with stage, next follow-up and owner.
- Design and proposals: a tool that turns a bill and roof into a system size, subsidy figure and payback. Tools like PitchSun can create these as mobile proposals you share on WhatsApp.
- Accounting: GST-compliant invoicing from day one.
- Project tracker: one checklist per job covering portal status, photos, inspection date and payments.
- Monitoring: inverter manufacturer apps for generation and fault alerts.
Common mistakes new installers make
- Taking jobs before the electrical contractor licence and vendor registration are active.
- Buying non-DCR modules for a subsidy customer, or skipping the ALMM check.
- Underpricing and forgetting the 5-year maintenance cost.
- Weak site surveys that miss shading or weak roofs.
- Incomplete portal uploads that send applications back from the DISCOM.
- Running out of working capital with several projects stuck at inspection.
- Ignoring after-sales, which damages your vendor rating and referrals.
Startup checklist: how to start solar business in India step by step
| Step | What | Where / official body |
|---|---|---|
| 1 | Choose model and legal entity; get PAN and a current account | MCA (LLP/company), Income Tax Department, your bank |
| 2 | GST registration | GST portal (gst.gov.in) |
| 3 | Udyam (MSME) registration | udyamregistration.gov.in |
| 4 | Shop/establishment or trade licence, if your state requires it | State labour department / local body |
| 5 | Electrical contractor licence, supervisor competency certificate, workmen permits | State Electrical Inspectorate / Licensing Board |
| 6 | Train installers | NISE Suryamitra programme, Skill Council for Green Jobs |
| 7 | PM Surya Ghar vendor registration with PBG | State nodal DISCOM/agency or REC Limited, via pmsuryaghar.gov.in |
| 8 | Supplier tie-ups for DCR modules, ALMM-listed products, compliant inverters | MNRE ALMM lists; authorised distributors |
| 9 | Insurance and safety kit | Insurer; safety equipment suppliers |
| 10 | Learn local net metering rules | Your DISCOM and State Electricity Regulatory Commission |
| 11 | Set up quotes, proposals, CRM and invoicing | Your own tools and CA |
Once these are in place, focus on doing ten installations really well in your area. In this business, good work and quick service bring the next customers.
Frequently asked questions
What licence is required for a solar installation business in India?
Under the CEA Safety and Electric Supply Regulations, 2023, electrical installation work must be done by an electrical contractor licensed by the State Government, supervised by a person with a certificate of competency and carried out by permit-holding workmen. You will also need GST registration, and to install subsidised residential systems you must be a registered vendor on the PM Surya Ghar National Portal.
How do I become a PM Surya Ghar vendor?
Vendors register either at state level through the nodal DISCOM or state agency, or at national/multi-state level through REC Limited, the National Programme Implementation Agency. A performance bank guarantee is part of the process; confirm the current amount and documents with your state's nodal agency before applying.
Can I start a solar business without an electrical background?
Yes, as an owner you can focus on sales and operations, but your firm still needs licensed electrical supervision and trained installers. Many owners hire ITI electricians and put them through recognised training such as the Suryamitra programme run by NISE.
Which solar panels must be used for PM Surya Ghar subsidy?
The scheme guidelines require DCR modules, meaning panels made in India using Indian-made cells. Using non-DCR modules anywhere in the installation makes the system ineligible for central subsidy.
Is a solar franchise or dealership better than starting my own EPC?
A franchise or dealership lowers the learning curve and gives you a brand, but you usually give up some margin and control over pricing and suppliers. Your own EPC takes more setup but lets you own the customer relationship and the 5-year maintenance revenue.
How much money do I need to start a rooftop solar business?
There is no single figure; it depends on your model and city. Plan for registrations, the performance bank guarantee, tools and safety gear, a vehicle, stock or advance payments to suppliers, marketing, and enough working capital to cover several projects while DISCOM inspections are pending.
Sources
- MNRE — Guidelines for PM-Surya Ghar: Muft Bijli Yojana, CFA to Residential Consumers
- PIB — 75 Lakh Households Targeted for Rooftop Solar Installations by December 2026 (4 June 2026)
- PIB — PM Surya Ghar Yojana Delivers Scale with 26 Lakh Installations (24 March 2026)
- MNRE — Process of Vendor Registration for PM-Surya Ghar Scheme on the National Portal
- MNRE — Office Memorandum on simplified vendor registration, with vendor declaration format (10 June 2022)
- PM Surya Ghar — National Portal for Rooftop Solar
- MNRE — Approved List of Models and Manufacturers (ALMM)
- NISE — Suryamitra Skill Development Programme
- CEA — Measures relating to Safety and Electric Supply Regulations, 2023
- PIB — GST on Renewable Energy Devices Rationalised to 5%
- Ministry of MSME — Udyam Registration portal
- Goods and Services Tax Network — GST portal