How Do I Price My Solar Panel Services Profitably?
- Nate Jones, CPCU, ARM, CLCS, AU
- Oct 22, 2025
- 2 min read
If you're starting or growing a solar installation business, one of the most important decisions you'll make is how to price your solar panel services. Whether you're working on residential rooftops or large-scale commercial systems, your pricing strategy affects your profitability, competitiveness, and long-term success.
At Wexford Insurance, we specialize in helping solar contractors protect their businesses with tailored insurance solutions. But we also understand that pricing is a key part of your business strategy. In this guide, we’ll break down the essential factors that influence solar panel service pricing and how to build a pricing model that works for you.
Key Factors That Influence Solar Panel Service Pricing
1. Labor Costs
Labor is one of the largest expenses in solar installation. Rates vary based on location, experience, certifications (like NABCEP), and union status. Labor can account for 15–25% of total installation costs.
Tip: Track labor hours carefully and consider seasonal demand when scheduling projects.
2. Equipment and Materials
Your pricing must cover the cost of solar panels, inverters, mounting hardware, wiring, and optional battery storage. Equipment typically makes up 50–60% of the total system cost.
Explore more a a guide on solar panel types and efficiency.
3. Overhead and Soft Costs
Soft costs include permitting, inspections, transportation, marketing, and administrative expenses. These can account for 25–38% of total costs, especially in residential projects.
Tip: Use project management software to streamline operations and reduce overhead.
4. Market Competition
Research your local market. Are you competing with national solar brands or small local installers? Competitive pricing can help you win bids, but underpricing can hurt your margins.
5. Profit Margins
Typical profit margins for solar contractors range from 15% to 35%, depending on project size and efficiency. Residential jobs often yield higher margins due to less competitive bidding
Tip: Include a buffer for unexpected costs and aim for sustainable margins that support growth.
Pricing Models to Consider
Per Watt Pricing: Common in the industry. Average rates range from $2.50 to $3.50 per watt installed.
Flat Rate Pricing: Useful for small residential jobs with predictable scopes.
Tiered Pricing: Offers discounts for larger systems or repeat clients.
Don’t Forget Insurance Costs
Insurance is a critical part of your pricing strategy. Solar contractors face unique risks—from rooftop falls to equipment theft. Make sure your pricing accounts for:
When preparing estimates, be transparent. Break down:
Equipment costs
Labor hours
Permitting fees
Insurance and warranty coverage
Expected energy savings
Use tools like solar savings calculators or proposal software to streamline this process.
Final Thoughts
Pricing your solar panel services isn’t just about covering costs—it’s about building a sustainable business. By understanding your expenses, market, and insurance needs, you can create a pricing strategy that supports growth and profitability.
If you're launching or expanding your solar installation business, Wexford Insurance is here to help you protect your investment. We offer specialized solar contractor insurance programs tailored to your needs.
Contact us today.
