The solar installer cash flow gap: why busy installers run out of money

Talk to enough solar and battery installers and you’ll hear the same story. The phones are ringing, the crews are flat out, the order book is full, and somehow the bank account keeps getting emptier. It’s not bad management and it’s not bad luck. It’s the shape of the cash cycle in this industry, and it gets worse the faster you grow.

This guide breaks that cycle down, shows where the money gets stuck, and explains how to fund it so a busy year doesn’t turn into a cash crisis.

The life of one job, in cash terms

Every installer’s process is different, but the cash steps for a typical residential solar and battery job look something like this:

Step	Cash out	Cash in
Quote accepted	Nothing yet	Possibly a customer deposit
Order stock	Panels, inverter, battery, racking, often paid before or on delivery	Nothing
Schedule and install	Crew wages, travel, electrician, consumables	Nothing
Completion and connection	Paperwork, compliance, any extra visits	Customer pays their share (after any certificate discount)
Certificate recovery	Admin time	Value of certificates, once created and sold or transferred

The gap runs from the day you pay the supplier to the day the last dollar arrives. Measure it in days, for your business, using real jobs. That number is the foundation for everything else in this guide.

Where certificates fit in

Under the Small-scale Renewable Energy Scheme, eligible small-scale solar systems and eligible home batteries can create small-scale technology certificates. In practice, many installers and retailers pass the expected certificate value to the customer as an upfront discount, then recover it by creating the certificates and selling or transferring them.

It’s a good deal for customers and a good sales tool. But for the business, it splits the job’s revenue into two payments: the customer’s share at completion, and the certificate value later. Until the second payment arrives, that portion of the job is effectively a loan from you to the scheme process. Multiply it across every job you do in a month and it adds up fast.

Why growth makes it worse

Here’s the counterintuitive part. Imagine an installer whose cash cycle is roughly six weeks from supplier payment to full recovery. At ten jobs a month, there’s always around fifteen jobs’ worth of cash tied up in progress. If the business grows to twenty jobs a month, that becomes around thirty jobs’ worth, double the cash, even though each job is just as profitable.

That’s why fast-growing installers can see their bank balance shrink while sales and profits climb. Lenders call it overtrading. It’s one of the most common reasons good installers run into trouble, especially when incentives change and demand surges suddenly.

How to size the gap

You don’t need complex modelling. A simple approach:

1. Measure your average cycle, in days, from paying the supplier to receiving every dollar for a job.
2. Work out the average cash you spend per job before any money comes back: stock plus labour plus overheads for that job.
3. Estimate jobs started per day at your planned volume, not today’s.
4. Multiply cycle days by jobs per day by cash per job. That’s roughly how much cash you’ll have tied up at any time.
5. Add a buffer for slow payers, delayed connections and certificate delays.

Our cash gap calculator does a month-by-month version if you’d rather enter money in and money out directly.

Funding the gap

Option	When it fits
Business line of credit	The general fix: draw for stock and wages, repay as jobs pay out
Invoice finance	Commercial customers on 30 to 60 day terms
Short-term unsecured loan	A one-off stock buy, typically $5,000 to $500,000
Equipment finance	Vans, lifts, scaffolding and tools
Property-secured loan	A bigger growth push, from $20,000 to $5,000,000

For most installers, a line of credit is the core facility, because the need goes up and down with the order book. Commercial installers invoicing businesses on terms may get more from invoice finance. Our page on solar business loans covers why banks often decline the sector and what alternative lenders look for instead.

Fix the cycle, not just the funding

Finance smooths the gap, but you can also shrink it:

• Supplier terms. As your volume grows, ask for longer terms or staged payments. A couple of extra weeks matters.
• Customer deposits. Where appropriate and allowed, a deposit at acceptance reduces cash tied up per job.
• Faster scheduling. Shorter time between delivery and install means stock sits in the warehouse for less time.
• Prompt paperwork. Delays in compliance documents and certificate creation stretch the cycle. Make it someone’s job.
• Stock discipline. Don’t over-order slow-moving lines just because a discount looks good.

Price every job to make money

Funding a gap only makes sense if each job is profitable once every cost is counted, including the cost of finance. Review your pricing whenever component prices, certificate values, wages or finance costs move. A business that loses a little on every job will lose a lot faster with more funding.

Watch for policy changes

Solar and battery demand moves with policy. When incentives expand, enquiries can jump within weeks, and the cash gap grows just as quickly. When incentives are reduced or certificate values fall, customers can rush to buy before the change, followed by a quieter period. Both swings stress cash flow. Keep an eye on announcements from the Clean Energy Regulator and energy.gov.au, and revisit your facility size whenever the rules change, rather than waiting until the bank balance tells you.

An illustrative example

An illustrative installer in Perth’s northern suburbs was completing around twelve battery and solar jobs a month and planned to grow to twenty-five after battery incentives expanded. Their measured cycle was about seven weeks. Using the method above, they estimated that cash tied up in jobs would roughly double, well beyond their existing overdraft. Before the surge, they negotiated an extra two weeks on supplier terms, began taking a modest deposit at acceptance, and set up a line of credit sized to the planned volume. When demand jumped, the crews kept working and wages were never late.

What a lender will want to see

• Twelve months of business bank statements
• Your accreditation, licences and insurance
• Average job value, jobs per month and your measured cash cycle
• How certificate value is recovered in your business, and typical timing
• Supplier terms and any planned stock orders
• Your pricing approach and margins

Fund your growth before it bites

If your installer business is growing faster than your cash, send us a 60-second enquiry. There’s no credit check when you first enquire, we won’t push your details out to every lender in the country, and a real person who understands solar cash flow will help size a facility that fits. Please be accurate on the form about turnover, jobs per month and how long you’ve been trading so we can match you properly. See if you qualify.