Solar businesses operate under a complex patchwork of state and local regulations, and there is no single license or process that applies across the board. The specific licenses required depend heavily on a business's operations, the scope of work performed, and the jurisdiction where installation takes place.
The following sections provide an overview of what solar businesses need to know, including the licenses required to install and sell solar energy systems, the optional credentials that can affect a business's competitiveness, and other related registration requirements.
Licensing for solar installation
Most states regulate solar installation through their existing contractor licensing systems, rather than creating a license specifically for solar work. In practice, this usually breaks down along two tracks:
- States that license contractors directly
- States that delegate licensing authority for contracting to local governments
Many states require a state-level contractor entity license. Those performing the contracting work would themselves need a state-level license for individuals. Photovoltaic (PV) installations usually fall under electrical contractor licensing, while solar-thermal installations often fall under plumbing licensing.
Some states have created a license specific to solar, in addition to the traditional categories like electrical, plumbing, and general contracting. Florida, for example, offers a Certified Solar Contractor (CVC) designation that covers both PV and solar-thermal work.
Other states have no state-level contractor licensing requirement (aside from licenses for certain specialized trades). In these states, licensing authority is delegated to county and municipal building departments. These local authorities, referred to as Authorities Having Jurisdiction (AHJs), set their own rules. This means a contractor may need to meet an entirely separate set of requirements for each local jurisdiction it operates in, and those requirements can vary from one AHJ to the next in terms of what license types are recognized and what's required to obtain one. As with state-level licensing, this often includes separate requirements for the contractor business and for the individual contractor.
Licensing reciprocity
Licensing reciprocity across jurisdictions is not always guaranteed. In instances where reciprocity is offered, it is usually limited to equivalent licenses with matching classifications.
Even where reciprocity is available, a contractor still has to go through the licensing process in each state or local jurisdiction where they plan to operate. With reciprocity, the trade portion of the exam is usually waived, provided the contractor already holds an equivalent license, has passed the equivalent trade exam in the reciprocal state, and is in good standing in the reciprocal state. A license application still needs to be submitted.
Because of these conditions, contractors should confirm reciprocity and licensing requirements before expanding into a new jurisdiction or bidding on a project there, rather than assuming an existing license will carry over.
Licensing for solar sales
Licensing requirements are not always limited to the actual work of installing a system. In some states, those selling, soliciting, or negotiating a solar contract need a license to do so.
This distinction matters because a company can hold a valid license for solar contracting work while its sales representatives are not properly licensed or authorized to sell contracting services.
For example, Florida law specifies that the attempted sale of contracting services, including negotiating or bidding on a contract, constitutes contracting and requires the same license as the underlying work. In practice, this covers anyone contracting with a homeowner on a solar thermal or PV system, including installation, repair, and replacement work.
A news investigation in Florida uncovered a number of solar sales representatives who appeared to be operating without the state-required licenses. While the installation companies involved generally held active contractor licenses, individual salespeople listed on customer contracts could not be found in the state's contractor licensing database. Many of these contracts were also missing mandatory consumer disclosures. After the report aired, more homeowners came forward with similar complaints against other solar contractors.
State credentials and registrations
Many states and utilities offer credential or registration programs that are not mandatory, but that many solar businesses pursue anyway. These programs typically determine whether a contractor can offer financial incentives to customers on behalf of a state or state utility.
In Oregon, contractors can offer customers Energy Trust incentives by enrolling as a solar trade ally with the Energy Trust of Oregon. Qualifying requires maintaining an active Construction Contractors Board (CCB) license, carrying insurance and bonding, and completing an enrollment process that includes a program interview and a sample proposal review.
New York offers a tiered qualification program through the New York State Energy Research and Development Authority (NYSERDA). Contractors can become a NYSERDA Qualified Contractor, which allows them to participate in the NY-Sun program and offer incentives for customers. Those who consistently meet additional quality criteria can earn the Quality Solar Installer (QSI) designation, with Gold and Platinum tiers awarded for sustaining that status over multiple years. Gold and Platinum installers are prioritized in NYSERDA's contractor search tool, and QSI status must be renewed annually.
These programs sit on top of the licensing requirements already covered above. They don't replace any required licenses, and they are not part of the licensing process itself. Even so, many companies choose to pursue them, since the credentials let contractors offer incentives and rebates that make them more competitive in their market.
NABCEP professional certification
The North American Board of Certified Energy Practitioners (NABCEP) is a nonprofit organization that provides national certifications for renewable energy professionals. These credentials recognize individuals who demonstrate proven training and field experience by passing a rigorous exam.
For solar professionals, NABCEP offers more than half a dozen board certifications, including PV Installation Professional (PVIP), Solar Heating Installer (SHI), PV Technical Sales (PVTS), and Energy Storage Installation Professional (ESIP).
NABCEP certification is not a professional license, and it does not replace state or local contractor requirements. Even so, the certification comes with certain benefits. Many state and utility incentive programs rely on NABCEP certification as part of their qualification criteria. In a few states, it also serves as one of several pathways toward earning a specialized solar credential. And in both public and private bidding, project owners often prefer or require applicants to hold NABCEP Board Certification.
How to obtain a solar contractor license
While specific requirements vary by state, getting a solar contractor license generally involves these steps.
1. Identify the correct licensing authority
Confirm which licensing authority actually governs solar contracting in your area and the type of license required. Depending on the state, this could mean a state-level solar license or an electrical or plumbing contractor license. In states without state-level licensing, the local AHJ where you plan to operate will set its own licensing or registration requirements.
2. Establish your business entity
The solar contracting business must be legally authorized to operate in the state. If the business is an LLC or corporation, this means forming or registering as a foreign entity with the Secretary of State’s office, and obtaining the necessary federal and state tax IDs.
3. Designate a qualifying individual
Business entities (such as an LLC or corporation) will need to name a "qualifying individual" (QI), the person whose professional credentials and experience the license is legally based on. This is typically an owner, partner, or full-time employee, and their official relationship to the company must be documented in the application.
4. Meet the experience and exam requirements
The qualifying individual must meet the following requirements:
- Be at least 18 years old
- Demonstrate a minimum amount of verifiable, hands-on experience in solar or electrical work
- Pass one or more trade and business or law exams administered by the state or local licensing authority
Many jurisdictions allow existing credentials to count toward the experience requirement. A NABCEP PV Installation Professional (PVIP) certification or a Master Electrician license, for example, can often satisfy part of the criteria, which can shorten the path to licensure.
5. Pass a background check
Applicants will need to undergo a criminal background check and disclose any felony history. A past conviction does not automatically disqualify an applicant, but licensing authorities evaluate this on a case-by-case basis, and undisclosed history can jeopardize the application.
6. Secure insurance and bonding
Before a license is issued, the business will be asked to confirm the following:
- General liability insurance
- Workers' compensation coverage, if the business has employees
- A contractor surety bond, in the amount set by the state or local authority
7. Submit the application and pay fees
The business submits its application along with all required documentation and pays the applicable application and licensing fees. Processing times and fee structures vary widely, so it is worth researching the specific jurisdiction or jurisdictions involved early and building that timeline into launch plans.
Other licensing and registration requirements
Beyond the licensing requirements covered above, there are a number of related registration and permitting requirements that can apply to solar businesses depending on where they operate.
- Depending on the state, your business may need to obtain a sales tax permit from the state's department of revenue.
- Regarding employees, you may need to report hires to the department of labor and register for payroll taxes.
- A general business license, where required, is separate from the contractor license and is usually issued by the county or municipality. Washington, Nevada, and Alaska issue a general business license at the state level as well, so businesses there will typically need both a state-level and a local general business license.
- Businesses that solicit door-to-door and don't maintain a permanent location in a state may need an itinerant merchant or peddler license. Applications for this type of license often require proof of employment, a driver's license for each employee, vehicle registration, and the dates and times of solicitation.
- Some towns and municipalities prohibit door-to-door solicitation altogether, so it's worth confirming local rules.
For more information on basic business licensing requirements, see What license do you need when starting a business.
CT Corporation can help
Expanding a business into new states often means navigating complex licensing and registration requirements.
CT Corporation can help you stay up to date with changing requirements and forms so you can focus on your clients and the job at hand. CT® Business Formation Solutions help you get your business incorporated and CT® Business License Solutions help you get the licenses you need efficiently and correctly.
To learn more about how CT Corporation can help you manage your business license needs, contact a CT Corporation Service Representative.