Taking over a photovoltaic business: key evaluation criteria
Introduction
The Swiss photovoltaic market is in full expansion. Between climate objectives, cantonal subsidies and rising energy prices, demand for solar installations shows no signs of weakening. For buyers, this sector represents a concrete opportunity, but taking over a photovoltaic business requires precise and structured evaluation.
Unlike other activities, a solar business combines several dimensions: sale and installation of panels, recurring maintenance contracts, warranty management, mandatory technical certifications and relationships with international suppliers. Each element directly influences the profitability and value of the business. A poorly sized installation, an unprofitable maintenance contract or a missing certification can compromise the viability of the project.
This guide presents the key evaluation criteria for analysing a solar sector business before committing. From analysing the portfolio of installations to financial indicators, through technical skills and project pipeline, you will have a concrete framework to secure your decision. For an in-depth financial evaluation, consult our online valuation tool.
📌 Summary (TL;DR)
Taking over a photovoltaic business requires analysing several dimensions: portfolio of installations and maintenance contracts, cost structure and margins by activity, mandatory technical certifications, relationships with suppliers and future project pipeline. Each criterion directly influences the profitability and value of the business. A structured evaluation allows you to identify risks and opportunities before committing to this fast-growing sector.
📚 Table of contents
The photovoltaic market in Switzerland: context and opportunities
The Swiss photovoltaic sector is experiencing sustained growth. The Energy Strategy 2050 and the Energy Act (LEne) favour the development of solar power. Feed-in Tariffs (RPC) and various cantonal subsidies stimulate demand.
Businesses in the sector benefit from an expanding project pipeline: residential, commercial, agricultural. Rising energy costs reinforce interest in self-consumption.
For buyers, this is a promising sector with recurring revenues (maintenance) and growing demand. Discover the available opportunities in energy and other sectors.
Analysing the portfolio of installations and contracts
The evaluation of a photovoltaic business begins with analysing its portfolio. The quality and recurrence of revenues depend on the type of installations carried out and contracts signed.
A diversified portfolio reduces customer concentration risks. Recurring revenues (maintenance, monitoring) provide financial stability and increase the value of the business.
Examine the split between one-off projects and long-term contracts to assess the predictability of cash flows.
Types of installations and client mix
Differentiate between residential installations (small surfaces, numerous clients), commercial (business rooftops), agricultural (barns, stables) and industrial (high power).
Each segment has its own characteristics: margins, project duration, technical complexity. Residential generates volume but lower margins. Industrial offers higher margins but concentration of risk.
Analyse the diversification of the client portfolio: a balanced mix limits dependence on one segment or a few large accounts.
Maintenance contracts and warranties
Recurring maintenance contracts constitute a major asset. Verify their duration (often 10-20 years), pricing, and renewal rate. These predictable revenues strongly value the business.
Examine remaining warranty obligations (panels, inverters, installation). They can generate significant future costs. Verify the transferability of contracts to the buyer.
For a similar methodological approach, consult our guide on evaluating IT maintenance contracts.
Evaluating profitability and margins
The financial analysis of a photovoltaic business requires a detailed understanding of its cost structure. Margins vary significantly according to activity: installation versus maintenance.
Equipment (panels, inverters) represents 40-60% of a project's cost. Labour and subcontracting also weigh heavily. Identify optimisation levers: supplier negotiating power, team productivity.
Healthy profitability relies on a balance between installation volume and recurring maintenance revenues.
Cost structure and margins by activity
Break down costs: equipment (panels, inverters, structure), labour (qualified electricians), subcontracting (scaffolding, roofing), and overheads (office, vehicles, insurance).
Installation margins vary between 10% and 25% depending on size and complexity. Maintenance generates higher margins (30-50%) with less capital employed.
For a comparative approach, consult our article on evaluating margins in renovation.
Key financial indicators
Analyse EBITDA, net margin rate, and working capital requirements. Customer payment terms (often 30-60 days) and supplier terms impact cash flow.
Sector-specific ratios: cost per kWp installed, share of recurring revenues in total turnover, and quote conversion rate. These indicators reveal operational efficiency.
Use our valuation tool to estimate the value of the business according to these financial criteria.
Verifying technical skills and certifications
The photovoltaic sector is regulated. Certifications and qualifications determine the ability to operate legally and access subsidies.
Without the right certifications, the business cannot carry out certain types of installations or benefit from support programmes. Also verify the technical team's skills.
Knowledge transfer is crucial to maintain installation quality and customer satisfaction after the takeover.
Certifications and authorisations
Verify OIBT (Ordinance on Low Voltage Electrical Installations) certifications and membership of Swissolar. Electricians must possess the required qualifications (CFC, federal master craftsman).
Check cantonal and municipal authorisations to operate. Certain subsidies (RPC, cantonal programmes) require specific certifications.
The absence of certifications can limit market access and reduce the business's competitiveness against qualified competitors.
Team and knowledge transfer
Evaluate the team's skills: qualified electricians, project managers, maintenance technicians. Identify key people and the risk of departure post-takeover.
Expertise in sizing (power calculation, orientation, yield) and installation is essential. A structured transition plan secures the transfer of skills.
Plan for a period of support from the seller to guarantee operational continuity and customer relationships.
Analysing suppliers and partnerships
The supply chain is critical in photovoltaics. Verify equipment purchasing conditions (panels, inverters, mounting systems): prices, delivery times, payment terms.
Analyse dependence on certain suppliers. Diversification of sources reduces risks of supply disruption or sudden price increases.
Examine strategic partnerships: electrical installers, architects, property developers. These relationships generate commercial opportunities. Evaluate their transferability and the risk of rupture during the takeover. Formalised agreements facilitate the transition.
Evaluating the project pipeline and growth
The backlog (signed but unrealised projects) and current quotes reveal short-term potential. A solid pipeline secures revenues for the coming months.
Analyse customer acquisition sources: recommendations, commercial partners, digital marketing. Diversification of channels limits dependence on a single source.
Evaluate the business's capacity to grow with market demand: teams, equipment, financial capacity. Identify the investments needed to scale. Use our rapid evaluation grid for a complete methodological analysis.
Taking over a photovoltaic business represents an opportunity in a growing market, but requires rigorous evaluation. The portfolio of installations, quality of maintenance contracts, margin structure and technical certifications constitute the pillars of your analysis. Each element directly influences the profitability and sustainability of the activity.
The strength of supplier partnerships and the project pipeline determine future development potential. Complete due diligence allows you to identify risks and adjust your offer accordingly. Do not hesitate to rely on sector experts to validate the technical and regulatory aspects specific to photovoltaics.
Are you looking for a photovoltaic business to take over? Discover the opportunities available on Leez and access verified files. Need support? Our network of experts can assist you in your evaluation.
