What Indian Solar Installers Must Do to Stay Profitable in 2026
- SIVA HARSH S
- 3 days ago
- 6 min read
The market is growing. Installer profits aren’t. Here’s what you must build to cross the 2026 threshold.
If you run a 5–50 person solar (and storage) business in India, 2025 likely looked like this: more enquiries, more competition, more follow-ups, and less money left at the end of each project.
That’s not a “tough year.” It’s the new structure of the market.
Rooftop additions surged 157% YoY with 4.9 GW installed in the first nine months of 2025. At the same time, the vendor base exploded from roughly 6,500 to around 40,000. That’s not just competition—it’s pricing chaos and diluted lead quality.
The strongest proof that demand isn’t the constraint comes from PM Surya Ghar itself: by December 3, 2025, India had 1.92 million installations against 5.35 million applications. Roughly 64% of applications were still stuck in feasibility, paperwork, approvals, or disbursement. Customers are willing. The system is slow.
So 2026 becomes a survival line. Not because solar slows down, but because the classic EPC model—install, hand over, move on—can’t survive thin margins, long delays, rising labour costs, and unpaid service.
This post skips policy commentary and “market is booming” talk. It’s a practical checklist of what profitable installers are building now.
The equation you’re already living with
An EPC margin is not your profit. It’s what’s left before delays, interest, rework, and service visits start eating it.
Profit = EPC margin − (delay cost + capital cost + service leakage + rework/warranty risk)
With gross margins at 8–12%, and net margins for many unorganised installers falling to 3–5% after delay-driven interest costs, you don’t need a crisis to lose money. A normal project timeline is enough.
Installers who stay profitable in 2026 will not “sell harder.” They will operate differently: they will price and manage delays, charge for service, standardise quality, and tighten workflow control so costs stop slipping through cracks.
1) Don’t grow faster than your cash cycle can handle
Execution delays are now a financial event.
The audited reality:
20–25% of working capital gets locked for 90–120 days
The gap is bridged at 12–18% interest
That interest alone can turn an 8–12% gross margin into a 3–5% net margin—or worse
If you feel constantly busy yet constantly tight on cash, your issue is often not sales. It’s the cash conversion cycle.
What to build
Quote against real timelines.If approvals and disbursements take months, your quote has to assume months. Otherwise you’re quoting a best-case scenario and funding the gap yourself.
Stop collecting “most of the money at the end.”Milestone payments are not a nice-to-have. They are how you avoid becoming the lender.
Define walk-away rules.I f a job requires you to carry the project financially through delays you can’t afford, it’s not a good project. It’s a loan you didn’t price.
2) Run approvals like operations, not follow-ups
Approvals, load extensions, net metering, subsidy releases, these aren’t side activities. They are the timeline.
Your audited benchmarks should show the pattern:
Subsidy disbursement: 60–130 days
Load extension backlog: 45–90 days
“30-day” approvals stretching to 120 days
This is where many installers bleed money quietly: repeated site visits, untracked delays, rescheduling crews, and the slow creep of interest.
What to build
A hard feasibility gate. Before you commit, standardise what must be checked: documents, site readiness, DISCOM requirements, and common rejection points.
A single execution pipeline. Sales → survey → design → submission → follow-up → commissioning → handover. Not “whatever happens.” One owner per stage, one checklist, one escalation rule.
A weekly rhythm that exposes stuck files early. Every project should have one visible status: what’s pending, for how long, and who owns the next move.
Digitisation matters here for one reason: it prevents “we didn’t know it was stuck.” In 2026, late discovery is expensive.
3) Make your quotes hard to break
In a low-margin market, “unexpected cost” usually means “untracked change.”
Hardware is 60–70% of project value. And the DCR pricing reality in late 2025 shows how quickly cost assumptions can become wrong: global modules were around ₹7.5/Wp, while mandatory DCR TOPCon + duties traded at ₹23–₹28/Wp in relevant contexts.
Even if you don’t operate in DCR-heavy segments, the principle holds: if your quote assumes one cost reality and procurement lands in another, your margin becomes the buffer.
What to build
Enforced quote validity. A quote that stays open indefinitely becomes your risk. Short validity windows protect you from drift.
Written assumptions. Roof condition, structure work, waterproofing, approvals, if it changes, the cost changes. Put it in the quote.
One BOM from sales to execution. Most “unforeseen costs” are missed items and scope creep. Tie the quoted BOM to the execution BOM. Control changes.
Change orders as standard practice. Scope change without a change order is just free work with extra steps.
Digitisation helps when it links quote → BOM → procurement → execution → change order. That chain is how you stop leakage.
4) Reject work early, before it wastes your team
In 2026, profitability is as much about what you refuse as what you accept.
Up to 40% of urban residential enquiries are non-viable or require expensive customisation.
Treating those like normal leads burns time and drags margins down.
What to build
A fast viability filter before proposal. Standard checks. Quick decisions. No long back-and-forth.
A customisation playbook. Some complex sites are profitable, if priced correctly. Many aren’t. Decide using rules, not optimism.
Deal hygiene.No vague scopes. No unlimited revisions. No “everything included” wording that becomes a blank cheque.
5) Build quality that doesn’t depend on your best people
Labour scarcity is not coming—it’s here.
Labour costs jumped 43% (2021–2023)
Skills gap: 1.2 million workers, rising demand to 1.7 million by 2027
Attrition: ~20% annually
If your quality relies on a few experienced technicians, attrition becomes a direct hit to your brand and your rework cost. Sometimes, you end up bearing the burden, quite literally.
What to build
Repeatable installation standards. Reduce improvisation. Standardise what “good” looks like.
QC checkpoints throughout the job. Catching issues at commissioning is sometimes too late. Build checks earlier.
Knowledge that stays in the company. SOPs, checklists, and photo evidence standards, these make quality portable across teams.
Digitisation is useful here only if it makes execution consistent and auditable, not because it looks modern.
6) Stop subsidising service. Sell it properly.
Most installers already do post-install service. Many just don’t charge for it.
The audited numbers explain why that’s fatal:
Unpriced service consumes 1–2% of project revenue
Field O&M at scale costs ₹8–12 lakh/year for C&I fleets
Optimised AMCs can deliver 40–50%+ gross margins
Failure rates are predictable, if your installation quality is good: inverters 0.89%, panels 0.8–1% latent defects
Soiling reduces generation 15–30%
Free service isn’t “support.” It’s profit leakage.
What to build
AMC packaging with clear boundaries. Define what’s included, what’s excluded, response times, and reporting.
Route density operations. Service becomes profitable when it’s planned and repeatable, not random.
Warranty triage discipline. Workmanship vs OEM vs customer-caused, if you don’t classify, everything becomes your cost.
7) Make trust measurable
When there are 40,000 vendors, customers don’t know who is competent.
They choose the installer who reduces perceived risk.
Your audited quote captures it: “Lack of quality guarantee on end-to-end product” is the biggest trust barrier.
So stop trying to “sound premium.” Start making quality provable.
What to build
A defined handover standard. Documentation, commissioning evidence, safety checks, and warranty boundaries.
Performance transparency. Show what’s normal, what’s not, and what you will do when issues appear.
Retention discipline. Trust reduces disputes, revisits, and churn. That’s how margins compound.
8) Storage: don’t sell promises you can’t service
Storage will reward installers who treat it as lifecycle responsibility, not an add-on.
Corrected reality:
Actual BESS deployment in 1H 2025: 48.4 MWh
Total installed by mid-2025: ~0.5 GWh
Degradation: 2–3% annually
The failure mode is predictable: oversimplified savings claims create long-term service disputes.
What to build
Sales discipline: explain assumptions, don’t over-promise
Warranty + degradation governance
Monitoring and response readiness
The unifying capability: workflow control through digitisation
If you take nothing else from this post, take this: the biggest installer losses in 2026 will not come from one dramatic event. They will come from dozens of small leaks, missed items, delayed files, untracked scope changes, free service visits, rework.
Digitisation matters only when it prevents those leaks by making workflows:
visible,
repeatable,
auditable,
and enforced.
The 2026 split
By 2026, there will be two kinds of installers:
Busy-but-broke vendors who chase volume on thin margins and absorb delays and service.
Lifecycle operators who price reality, control execution, and monetise the asset’s life.
PM Surya Ghar’s 64% execution gap is your warning signal: demand is not the limiter. Execution is.
In 2026, the winner won’t be the installer who installs the most. It will be the installer who loses the least per installation and earns after the install.
2026 Capability Checklist
Can we survive 90–120 day freezes without margin collapse?
Do we run approvals with owners, checklists, and escalation like operations?
Do we enforce quote validity, assumptions, BOM control, and change orders?
Can we reject non-viable leads early (40% problem)?
Can junior teams execute consistently because standards and QC are tight?
Are AMCs structured so service is profitable, not charity?
Can we prove quality with measurable handover and clear warranty boundaries?
If we sell batteries, do we govern degradation and performance expectations properly?
Are sales, execution, and service workflows digitised enough that leakage shows up early?
Navigating the solar market requires the right tools and insights. SolYield Software empowers solar professionals to automate operations, maximise customer satisfaction, and grow their business profitably with confidence. If you’d like to learn more or schedule a demo, contact us @ info@solyield.com
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