The solar energy business is a viable business because the availability of constant power supply is still a big issue in Nigeria. Both businesses and households are expending money on fuel and diesel on a daily basis. As a result, many are beginning to seek an alternative lasting solution to power issues.
Solar energy has proven to be a great substitute to fuel and diesel and it also saves the environment from noise pollution caused by generator sets. If you are considering starting a solar energy business in Nigeria, you are taking a step in the right direction. However, you must also know that the solar energy business is capital intensive depending on the level you want to operate.
This article contains all you need to know to get you started in the solar energy business.
What is solar energy?
Basically, solar energy involves capturing energy from sunlight and subsequently converting the sunlight into electricity.
Step one – register your business
In Nigeria, the first step to structuring your business is to register it with the Corporate Affairs Commission. The CAC is the approved body for business registration in Nigeria.
You can either register a business name or a limited liability company. The cheapest form of business registration is the business name. It is important to register your business because without it you cannot open a corporate account with any bank in Nigeria. More than that, it makes customers see your business as credible and reliable.
Additionally, you need to register with relevant government ministries or agencies to avoid any form of business interruption or court action. Importantly, register with the relevant union in the solar energy business so that you can fall back on them whenever you need help or when you face any challenge.
Step two – choose a niche
When starting a solar energy business, you can start in four ways:
1. Sell solar product to customers
Here, you will need to partner with companies manufacturing solar energy products.
The interesting part of this business is that you don’t need to have a huge start-up capital to begin. You can visit these companies, bargain prices with them, and begin advertising to your prospective customers. Once you get pictures of the equipment, you can post them across social media platforms and advertise them. As soon as your customers make a payment, you then place an order from the manufacturing company at an agreed specified price and sell at a profit.
There are three major components you would be selling:
i. Solar panel – This helps in tapping energy from the sun
ii. Inverter – This stores the energy in the battery for future use
iii. Battery – The inverter automatically switches to the energy stored in the battery once the sun goes down. This battery can also be charged using a generator or power supply. The batteries come in different sizes: 50ah, 100ah and 200ah.
If the inverter draws energy from electricity, it switches to the battery once the light goes off. Therefore, you will need to invest in the three equipment mentioned above if you are going into this business.
2. Be an installer of solar energy products
Usually, not everyone in the solar energy business can install it. This means that anyone that purchases an inverter will need someone to install it. This niche involves good electrical and electronic knowledge.
If you are an electrician or have experience connecting wires and the likes, this may be the best niche for you. All you need to do is to partner with sellers of solar energy products so that they can contact you whenever a customer buys from them and needs an installer.
Actually, it is advisable that you combine these two niches (selling and installation) as it will generate more profit. If you sell solar energy equipment, you should endeavor to learn the nitty-gritty involved in installing it. That way, you will be able to offer full service to your customers.
More than that, your customers will need someone to help them maintain the inverter. If you can offer all these services to them, they’ll prefer to work with you.
3. Be a solar energy equipment repairer
The last niche you can choose is the repairer niche. You can learn how to repair this equipment and offer your service to inverter users when any of the equipment develops a fault. This niche also requires collaboration with both sellers and manufacturers.
4. Be a solar energy product manufacturer
This is the most technical aspect of this business and it requires huge capital, training, and licenses to begin. There are legislations regulating solar power business in Nigeria that you must be familiar with.
Some of this legislation includes:
The Companies Allied Matters Act (CAMA), 2004
The Companies Regulations, 2012
Nigerian Electricity Regulation Commission’s Regulations for the Application for License (Generation, Transmission, System Operations, Distribution & Trading), 2010
Electric Power Sector Reform Act, 2005
Step three – draft a business plan for your solar energy business
Once you select the best niche for yourself, draft a business plan that will accompany it. A business plan is a document setting out your business’s future objectives and strategies for achieving them.
This step is important because it will contain detailed information that can help you improve your business chances of success. More than that, it will help you achieve both the short and long-term objectives of your business. Here are the information your business plan should have:
1.An overview of your solar energy business
2.Executive summary
3.General company description
4.SWOT analysis
5.Market research
6.Your strategy
7.The team
8.A marketing plan
9.An operational plan
10. Financial projection
11. An appendix
Step four– get an office space
Note that this step is not compulsory if you are starting small. But, if you are starting on a large scale, it’s best to get an office space where prospective customers can easily locate you. Preferably, acquire an office where electricity is scarce. Also, choose a location around people who can afford your equipment.
Step five – market your solar energy business
This is one of the very important steps to take when starting any business. Today, advertisement has been made easy due to the advent of the internet and social media. Open accounts on social media platforms and advertise your business on them.
Other ways to market your business include:
Word of mouth
Referral marketing
Social media influencer marketing
Google ads
Collaboration and partnership
Challenges of solar energy business
Usually, the common problem encountered in the solar energy business is that most customers find it difficult to operate the equipment. So, they tend to always call back or mishandle the equipment. To avoid this challenge, ensure you follow up on customers with a manual on how to use this equipment even after installation.
In conclusion, the solar energy business is profitable if you know how to navigate your way around the business. The start-up capital required to start this business depends on the size of your business. However, with N300, 000 – N500, 000, you can kick start the solar energy business.
source@entrepreneurs.ng
