Jul 13, 2026

Solar Installer Cash Flow: How to Stop Funding Your Customers' Systems

Solar installation is one of the worst cash flow businesses in the trades sector. You carry the cost — equipment, labour, compliance — weeks before you see the money. And in a high-volume growth phase, getting paid slowly while your workload grows is a fast road to insolvency despite a full diary.

This isn’t hypothetical. Solar businesses with strong revenue and healthy order books fail every year in Australia because they can’t cover their working capital gap. The Australian Securities and Investments Commission consistently lists cash flow problems as a top driver of small business failure in the construction and trades sectors.

The fixes are straightforward. But they require changing habits that feel uncomfortable — until you’ve used them long enough to see the difference in your bank account.

Why Solar Cash Flow Is Uniquely Brutal

Most trade jobs have a reasonable cash cycle: quote, book, complete within a day or two, invoice, get paid within 30 days. The equipment cost is relatively low relative to labour.

Solar is different for three reasons:

Equipment cost is high and front-loaded. A residential 13.2 kW system with battery might have $8,000–$14,000 in equipment. You need to order and pay for that equipment before the install day. If your supplier is on 30-day terms, you have some breathing room. If you’re paying upfront (which many smaller installers still do), you’re fronting the equipment cost weeks before you invoice.

Lead times extend the gap. Inverter and battery lead times in 2026 fluctuate. A system you quote today might not be installed for 3–6 weeks. That’s 3–6 weeks of working capital tied up in stock sitting in your warehouse or the supplier’s.

The STC mechanism adds complexity. You might be passing the STC discount through to the customer upfront — reducing their invoice by the STC value — but you don’t receive the STC cash until after you’ve lodged the claim and the certificates are traded. That can be 2–4 weeks post-installation. You’re effectively lending the customer the STC value.

The result: in a business doing $200,000/month of solar installations, it’s not unusual for $60,000–$100,000 of cash to be permanently tied up in the cycle at any given time.

The Deposit Is Not Optional

The single most powerful cash flow lever for a solar installer is a non-negotiable deposit paid before equipment is ordered.

The math is simple. A 30% deposit on a $20,000 solar and battery job gives you $6,000 before you spend a dollar. That $6,000 can cover a significant portion of the equipment order before it ships. You’re no longer funding the entire job from your working capital.

How much to take: 30–50% is standard for residential solar. 30% is the minimum that meaningfully reduces working capital exposure. Some installers take 50% for battery-only retrofits where equipment cost is very high relative to labour.

When to take it: The moment the customer signs the quote — not when you’re ready to book the install date. Every day between signing and deposit is a day the customer could change their mind, find a cheaper competitor, or simply forget to pay. Automate the request: your quote should include a payment link and the deposit should land within 24–48 hours of signing.

How to take it: ServiceM8 + Stripe makes this seamless. Build a deposit quote item into every solar job template. Send the quote with Stripe payment link embedded. Customer pays by card online — no chasing, no bank transfer wait, no cheque.

The friction objection — “my customers don’t like paying deposits” — is usually not accurate. Most customers expect to pay a deposit for a significant home improvement. Those who strongly resist may be signalling a credit risk you don’t want.

Start your free ServiceM8 trial →

Supplier Terms Are a Cash Flow Tool

Your relationship with your solar equipment supplier is a working capital asset, not just a purchasing relationship.

Negotiate 30-day or 60-day payment terms. Smaller solar businesses often default to paying upfront because they haven’t asked for terms. Ask. CEC-accredited installer businesses with consistent volume and good payment history are desirable customers for distributors — you have more leverage than you think.

60-day terms change the game. If you have 60-day supplier terms, here’s the math: you order equipment on day 0, install on day 14–21, invoice immediately, customer pays (on 7-day terms) by day 28. You’ve been paid by the customer 32 days before your supplier payment is due. The system becomes cash-flow positive.

Understand the full terms. Some distributor agreements include early payment discounts (e.g. 1% off for payment within 7 days). Do the maths on whether the discount is worth taking versus preserving your cash.

Buy strategically, not just-in-time. For inverter brands and panel types you use regularly, keeping a 2–4 unit buffer of stock lets you book faster install dates and reduces exposure to lead time blowouts. But don’t overstock — warehouse capital is dead capital.

Invoice on Completion Day. Every Time.

Every day between job completion and invoice sent is a free line of credit to your customer. A business doing 20 solar jobs per month, taking an average of 5 days to invoice, is permanently carrying the equivalent of ~17 un-invoiced jobs in its accounts receivable at any time.

Same-day invoicing is non-negotiable. The job is complete, the system is commissioned, the paperwork is done — invoice before the van leaves the driveway. In ServiceM8, the install crew can mark the job complete and trigger the invoice from their phone.

7-day payment terms, not 30. There is no logical reason to give a residential solar customer 30 days to pay an invoice. They’re not a commercial buyer on standard trade terms. They’re a homeowner who has just had a solar system installed. 7 days is reasonable and almost universally accepted. 14 days is the maximum you should offer.

Automate the follow-up. A payment reminder SMS at day 3 (“Just a quick reminder — your invoice is due in 4 days. Pay here: [link]”) and day 7 (“Your invoice is now due — please pay today to avoid late payment interest”) cuts average payment time dramatically. ServiceM8 Automation can handle this without you touching it.

The STC Gap — Managing It Properly

If you’re passing the STC discount through at point of invoice (which most accredited installers do to make the sale easier), you’re carrying the STC value until you’ve created and traded the certificates.

The STC creation and trading process typically takes:

Installation completed → STC created in REC Registry → 1–2 business days
STC trading through an aggregator → proceeds paid in 5–15 business days depending on aggregator
Total: 7–17 days post-installation to receive the STC cash

What this means for invoicing: If a customer’s invoice shows $20,000 total with a $4,200 STC discount (leaving $15,800 payable), and you collect $15,800 on day 7, but don’t receive the $4,200 STC cash until day 17 — you’re 10 days short on the STC component.

Manage this by:

Building the STC delay into your working capital buffer — it’s predictable, so model it
Using a fast-pay STC aggregator — some offer next-day or same-week payment for a small fee; the fee may be worth it for cash flow
Invoicing for the full system price and issuing the STC discount separately, only after the certificates are in your account — this puts the timing risk on the customer rather than you

Practical Cash Flow Dashboard (Simple Version)

Every solar business should be able to answer these questions at any point in time:

Metric	Target
Days from job complete to invoice	0 (same day)
Average debtor days (time from invoice to payment)	<10 days
Deposit collected as % of signed contracts	>95%
Outstanding creditors due within 14 days	Covered by cash on hand
Cash buffer (separate account)	6–8 weeks of fixed operating costs

If you can’t answer these questions because you don’t have visibility, that’s the first problem to fix. Xero (connected to ServiceM8) gives you accounts receivable aging, debtor days, and bank balance in real time. Run these numbers weekly, not monthly.

What to Do When You’re Already in a Cash Gap

If you’re already running with a cash flow problem — overdue supplier bills, drawing personal funds into the business — here’s the triage order:

1. Stop extending credit you can’t afford. If you have jobs to invoice that haven’t been invoiced, invoice them today. Don’t start any more jobs until you’ve chased every outstanding invoice.

2. Call your major supplier. Most distributors would rather offer a 30-day extension than lose an active customer. You have to ask — they won’t offer. Have the conversation before the invoice is overdue.

3. Collect deposits on everything booked. If you have 8 jobs booked in the next 3 weeks, get deposits on all 8 this week. That’s money in the bank now, before any equipment is ordered.

4. Invoice the progress-stage on any multi-stage jobs. If you’re on a commercial job and you’ve reached a completion milestone — panels on roof, inverter in — invoice for the completed portion now.

5. Don’t take on jobs you can’t fund. This is counterintuitive when you’re short on cash but it’s critical: taking on a large job without a deposit when you can’t fund the equipment is gambling. If the customer doesn’t pay, you’ve compounded the problem.

FAQ

How much deposit should I take for a solar installation?

30–50% is the standard range for residential solar. For a $20,000 job, a 30% deposit ($6,000) meaningfully reduces your working capital exposure. For large commercial jobs, 30% pre-installation and 30% on completion (with 40% on invoice) is a common structure.

What’s the best way to collect solar deposits in Australia?

Stripe integrated with ServiceM8 is the most efficient system for Australian solar businesses. You send a quote with a payment link embedded; the customer pays by credit or debit card online. Funds are processed to your account within 1–2 business days. No bank transfer delays, no cheque processing, no chasing.

Should I offer payment plans to solar customers?

Only through a licensed finance provider — not through your own business. Offering instalment plans or deferred payment arrangements directly is regulated under the National Consumer Credit Protection Act. Instead, refer customers to CEC-registered solar finance products (e.g. through the government’s Solar Finance programs) or the manufacturer’s finance partner.

What invoice payment terms should solar installers use?

7-day payment terms for residential. 14-day for commercial, where accounts payable processes may require slightly more time. 30-day terms for residential solar are industry habit rather than necessity — and they cost you money.

Can I charge interest on overdue solar invoices?

Yes — if your terms of trade include an interest clause and the customer was given those terms before the work commenced. Your terms of trade document (which should be referenced in every quote) should specify the interest rate for overdue invoices. Most Australian electricians’ terms reference the penalty interest rate set by the relevant state court.

This article is featured in Chapter 7 of The Sparky’s Playbook. The free 12-chapter guide for Australian electricians — licensing, EV charging, commercial solar, cash flow, tech stack, and building a business worth selling. Download the full book free →