Residential solar installers commonly run a gross margin around 30% to 45% on the install and a net margin of roughly 10% to 20% after overhead, sales, and financing costs. The gap between gross and net is unusually wide in solar, because two costs the rest of the trades don't carry — high customer-acquisition cost and the financing dealer fee — eat the difference. Where you land depends almost entirely on how you get your leads and whether the customer finances.
We run our own home-service companies, so we look at margin the same way: a healthy gross means nothing if acquisition cost swallows it before it reaches net. Here is the per-watt math, what eats the margin, and the one lever that moves it most.
Solar is priced and costed per watt. A rough picture of a typical residential job:
What the homeowner pays before the federal credit. A 7 kW system at $3.00/W is around $21,000. This is your top line per watt.
Panels, inverter or microinverters, racking, wiring, and monitoring. Standardizing on a few SKUs and buying in volume is where you protect this line.
Crew, electrician, permits, inspection, and interconnection paperwork. Efficient crews and clean permit packages keep this predictable.
The cut a lender takes to offer the low monthly payment. On a financed job this is often the single biggest margin drain. Cash and HELOC jobs skip it entirely.
A strong gross margin can collapse by the time it reaches net. The usual suspects:
The biggest lever, by far, is acquisition cost. Every job that comes from your own website and reputation instead of a purchased lead drops almost straight to net.
We don't post stock testimonials. On a 15-minute call we screen-share the real dashboards behind our own businesses — live leads, rankings, and the exact page that produced each one. See the proof →
Honest take: if your net margin is healthy and most of your jobs already come from referrals and repeat customers, do not let anyone talk you into a marketing overhaul you don't need. A solar business running on word-of-mouth with good crews is in an enviable spot. Protect the install quality and the referral engine you already have.
The pages that need help are the ones where every job arrives through a lead vendor or a commissioned rep, and net margin is thin because of it. Owning your lead flow is the fix. We build a solar website with 24/7 AI lead capture from $249/month that produces leads you own, not ones you rent. Add the SEO engine at $597/month to rank for "solar installer near me," or the full CRM from $1,750/month. First working demo in 48 hours. More: solar SEO, solar flyers, and SEO for contractors.
Around 30% to 45% gross on the install and roughly 10% to 20% net after overhead, sales, and financing costs. The gap is wide because acquisition cost and the financing dealer fee are unusually high in solar.
Customer-acquisition cost, often several thousand dollars per sale, and the financing dealer fee of 15% to 30% of the price compress net margin. A strong gross can shrink to a thin net once both land.
Lower acquisition cost by owning your lead flow, sell more cash and HELOC jobs that skip the dealer fee, tighten crews, and standardize equipment. Owning your leads moves the number most.
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