How Much Is a Solar Installation Business Worth in Australia?

A solar installation business in Australia is worth between 2.5 times and 4.5 times its annual EBITDA. The range is wide because the industry has a structural problem most buyers miss: a large portion of revenue in small solar businesses depends on government rebates that can be reduced or removed with six months' notice.

That caveat shifts the multiple significantly. A solar business generating $500,000 EBITDA from long-term commercial maintenance contracts is valued very differently from one generating $500,000 EBITDA entirely from residential installs propped up by Small-scale Technology Certificates.

Both are solar businesses. Both earn the same profit. The market doesn't value them the same way.

What Solar Installation Businesses Actually Sell For

Rule of thumb: 2.5x–4x EBITDA, or 1.5x–2.5x SDE for owner-operated businesses.

A well-run solar installer with a mix of residential and commercial clients, a trained team, and some maintenance income will typically trade in the 3x–4x EBITDA range. Owner-operated businesses where the principal does installs and sales — which describes most solar businesses below $2 million in annual revenue — tend to trade on Seller's Discretionary Earnings (SDE), usually 1.8x–2.5x.

The ceiling (4x–5x EBITDA) is reserved for businesses with:

A substantial commercial client base under multi-year service agreements
Monthly recurring revenue from system monitoring and maintenance
Multiple CEC-accredited installers on the payroll (not just the owner)
Pipeline visibility three to six months out
A brand generating inbound leads without the owner doing the sales calls personally

If the business you're looking at hits fewer than three of those, you're probably in the 2.5x–3x territory. Price it accordingly.

For context on how this compares across the trades sector, see the EBITDA multiples for trades businesses breakdown — solar sits mid-range, above general garden maintenance but below HVAC businesses with strong service contracts.

The Factors That Push the Multiple Up

The single biggest value driver is recurring revenue from commercial maintenance contracts.

Solar is inherently lumpy work. You install a system, collect payment, and the customer doesn't need you again for a decade — unless you've locked them into a monitoring and maintenance agreement. Businesses that have solved this problem attract meaningfully higher multiples.

A broker described a solar business in regional Victoria to me last year that was generating $180,000 annually in pure maintenance revenue alongside its install work. That income stream added roughly half a multiple to the final sale price. The buyer paid 3.8x EBITDA for what would otherwise have been a 3x business — and thought it was fair value, because the maintenance income was reliably contracted and not dependent on the owner showing up.

Other factors that push the number up:

Commercial client depth (the useful kind). Commercial clients mean larger jobs, longer relationships, and less exposure to the race-to-the-bottom pricing that plagues residential. A few council or government contracts anchor a business nicely and signal operational credibility to buyers.
Staff depth beyond the owner. If the business employs three or four accredited installers who don't need the owner on site to function, you can buy it and actually run it. CEC accreditation takes time and competency to obtain — an existing trained team carries genuine transfer value.
Systems and documentation. Job management software, documented safety procedures, and clean subcontractor records are table stakes in a licensed trade. Businesses with these in place sell faster and at better prices. Businesses without them make buyers nervous (as they should).
Geographic positioning. Queensland, Western Australia, and regional New South Wales have high install density and growing commercial solar demand. A well-positioned business in these markets attracts more buyer interest than an identical business in a saturated inner-metro suburb where the installer down the road is undercutting on every quote.

The Factors That Pull It Down

The biggest risk factor is STC rebate dependency — and most sellers won't volunteer how exposed they are.

The federal government's Small-scale Technology Certificate scheme effectively subsidises residential solar installations. The rebate is priced into the consumer cost; without it, residential jobs would cost noticeably more and demand would soften. The scheme is legislated to wind down and end in 2030 — and while governments can extend these things (they do enjoy a policy sunset date they never quite reach), you're still buying a business whose largest revenue driver depends on continued political will.

This isn't a reason to walk away from every residential-heavy solar business. It is a reason to model what the numbers look like if the rebate steps down, and to price that risk into your offer rather than discovering it after settlement.

Other value detractors:

Margin compression. Panel prices have fallen significantly over the past five years, and residential margins have followed. A business posting the same install volume it managed three years ago may be generating materially less profit. Check the trend, not just the most recent year's figures.
Key person risk. Many solar businesses run on the owner's trade licence, the owner's accreditation, and the owner's local reputation. Remove them and you're left with a fleet, some tools, and a website. The question isn't whether the owner says it's manageable — it's whether the transition plan is actually documented and believable.
Fleet age. Solar installers carry significant equipment — vehicles, installation rigs, tilt frames, testing gear, safety systems. Ageing fleet is a capital cost that doesn't show up in EBITDA until something breaks or needs replacing after settlement.
Subcontractor reliance. Businesses that use subbies to handle volume spikes look busier than they are. If the core headcount is two people and the rest are contractors, your post-settlement capacity depends on people who have no obligation to stay.

How to Calculate the Number

Start with normalised EBITDA. For solar, the add-backs worth scrutinising include:

Owner salary above market replacement cost. Owner-operators in solar often pay themselves $150,000–$250,000 all-in when a competent general manager or operations lead might cost $90,000–$120,000. The difference is an add-back — but only to the extent a replacement could actually be hired at that cost.
One-off large jobs. A $400,000 commercial install that happened once and is unlikely to repeat doesn't belong in your normalised run-rate. Ask sellers to strip out anything with a "never happens again" character.
Personal expenses through the business. Vehicle, phone, travel, equipment with personal use — the usual category. Run through the bank statements, not just the P&L.
Apprentice wages for staff who have since qualified and left. Some operators inflate their payroll costs by leaving apprentice wages in the P&L long after those apprentices moved on. Simple to check; sometimes overlooked.

Once you have a clean EBITDA number, apply the multiple based on the quality of earnings. Use the business valuation calculator to model the range, then sense-check it against comparable trades businesses in the market.

Quick benchmark: a solar installer doing $850,000 revenue with $210,000 normalised EBITDA and a meaningful maintenance book should be priced somewhere between $525,000 and $840,000. That's a wide range. The due diligence work determines where in it you land.

Want the full industry multiples reference? The industry multiples cheat sheet for Australian business buyers covers 20-plus trades and service categories, including solar, HVAC, electrical, and cleaning. Grab it free.

Asset vs Share Sale

Most solar installation businesses below $2 million sell as asset sales — you're buying the equipment, business name, client list, and goodwill, not the company structure with its full history of liabilities.

This matters for solar specifically because of compliance history. Solar installations must meet standards at the time of installation. If the previous owner signed off on work that later turns out to be non-compliant, complaints or defect claims can follow the business name even if you technically bought assets rather than shares. Get proper legal advice on exactly which obligations and warranties transfer. The asset vs share sale breakdown covers the broader mechanics.

Where the Market Is Now

Solar has moved through a significant cycle in Australia. The residential boom — rooftop panels on every second house in Queensland — is largely past its peak growth phase. Panel costs have fallen, installer numbers have consolidated, and margins on residential work have compressed.

Commercial and industrial solar is where buyers are finding the more interesting businesses. System sizes are larger, the clients tend to be stickier, margins on commercial work are stronger, and the conversations with buyers are about energy costs and carbon commitments rather than just chasing the best price per kilowatt. Businesses positioned for commercial and industrial work are attracting more serious buyer interest.

If you're evaluating a solar business, look hard at the revenue mix over the past three years and ask whether the trajectory points toward more commercial work or less. A business that has been drifting toward smaller residential jobs, thinner margins, and higher customer turnover is not the same quality of earnings as one moving in the other direction — even if this year's EBITDA number looks similar.

This is covered in depth in Module 4 of the Playbook, which works through how to read and adjust industry-specific revenue quality for any trades or service business.

Frequently Asked Questions

How much do solar installers make in Australia?

A solar installation business owner-operator typically draws $150,000–$350,000 per year in combined salary and profit distribution, depending on business size and client mix. Commercial-focused operators tend to generate higher returns than residential-only businesses, where margin compression has been more pronounced.

What EBITDA multiple should I use for a solar installation business?

Most Australian solar installation businesses sell for 2.5x–4x EBITDA. Owner-operated businesses below $2 million revenue often trade on SDE at 1.8x–2.5x. Businesses with strong maintenance revenue and commercial client bases attract multiples toward the top of that range.

Is a solar installation business a good investment in Australia?

Depends on the revenue mix. Businesses with commercial clients and maintenance contracts generate predictable cash flow. Heavily residential businesses with high rebate exposure carry policy risk that needs pricing into the deal. Start your analysis with the due diligence checklist.

How much deposit do I need to buy a solar business in Australia?

Banks typically require a 30%–50% equity contribution for a trades business acquisition. On a $700,000 solar business, expect to contribute $210,000–$350,000 of your own capital, plus legal, accounting, and due diligence costs on top.

What should I check in due diligence on a solar business?

Compliance history on past installations, CEC accreditation status for all installers, maintenance contract terms, fleet and equipment condition, subcontractor arrangements, and STC rebate dependency in the revenue mix. Government framework agreements, if any, are worth particular attention — they're sticky and transferable.

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