How to Invoice Solar Installations

Bill solar jobs in milestones

A residential solar job runs too long, and spends too much before it's finished, to bill with one invoice at the end. Between the signature and the day the system switches on, you pay for design, permit and utility paperwork, modules, inverters, racking and a crew, and the customer still can't use the system until the utility grants permission to operate (PTO). Milestone billing, the solar version of progress billing, ties each payment to a step the customer can see, so your bank account isn't financing their project.

Build a residential schedule from up to four milestones:

1. Contract signed. A deposit that holds the job and pays for the design, permit application and interconnection paperwork that start right away.
2. Permit approved or equipment delivered. A payment toward the equipment you're about to pay your distributor for.
3. Installation complete. A payment sized to the crew labor and electrical work, once the array, inverter, wiring and labels are in and ready for inspection.
4. Final inspection passed or PTO granted. The balance, once the building department signs off or the utility lets the system run.

A small cash job might combine the middle two, and a battery installed on its own date might get its own milestone. Put every milestone and its dollar amount in the signed contract, and show the same schedule in the proposal; how to write a solar proposal covers the rest of the proposal.

Check your state's home improvement contract rules before you set the amounts. The FTC tells homeowners not to pay the full amount up front and notes that some states limit down payments ¹, and rules on progress payments differ by state too. A contract signed in the customer's home can fall under the FTC's Cooling-Off Rule, which covers sales of $25 or more there and lets the buyer cancel until midnight of the third business day after the sale ²; your state may add rules of its own. How much deposit to ask for covers deposits and cancellation rights. Don't order equipment until any cancellation window has closed.

Define each milestone and its proof

Write each milestone into the contract as something you can show, because "done" means different things to an installer, a homeowner and a lender. The proof that triggers the payment then goes on the invoice.

Two choices deserve thought:

• Permit or delivery? Where your building department issues permits quickly, a permit milestone lands soon after signing and does little for your cash. Tie the second payment to equipment delivery instead, closer to the day your distributor's bill comes due.
• Inspection or PTO? Billing the balance at final inspection gets you paid sooner, but the customer pays in full for a system they can't yet turn on. Billing it all at PTO makes your margin wait on the utility. A middle path is to bill most of the balance at inspection and hold back a smaller amount until PTO.

Decide, too, what happens when a milestone stalls through no one's fault. Your contract can, for example, make the PTO holdback due a set number of days after a passed inspection even if the utility hasn't acted; have an attorney review that language.

Size each payment to the money going out

Set milestone amounts by when your costs land, not by habit. Put the cost buckets from how to price solar installations on a calendar: design, permit and interconnection work first, the equipment bill when your distributor ships or invoices, crew labor and electrical parts at installation, and overhead and profit across the job.

Example: A 10 kW system sold for $30,000 cash, with round, made-up numbers. Your distributor bills $11,000 for modules, inverters and racking when the order ships, and crew labor and electrical parts come to $5,000 at installation.

Milestone	Payment	Collected so far
Contract signed (deposit, within your state's limit)	$1,000	$1,000
Equipment delivered	$12,000	$13,000
Installation complete	$14,000	$27,000
PTO granted	$3,000	$30,000

By the time the crew leaves, you have paid out $16,000 and collected $27,000, and only $3,000 waits on the utility. Bill the same job as a $1,000 deposit and $29,000 at PTO, and you are $10,000 out of pocket when the equipment ships and $15,000 once the crew is paid, until the utility approves the system.

Keep the amount that waits on PTO small enough to carry for as long as your slowest utility takes. Track the days from passed inspection to PTO for each utility, and set each territory's holdback from what you see.

What every solar invoice should show

Each milestone invoice should stand on its own, so the homeowner or a lender's funding team can see what was reached, what's owed and what's left.

• The system: size in kW DC, the inverter's AC rating, module make, model and count, and any battery's make, model and usable capacity.
• The milestone: its name from the contract, the date reached and the proof attached.
• The money: this milestone's amount, approved change orders billed with it, payments received to date (deposit, cash, lender fundings), the remaining milestones, and who pays each one: the customer, the lender or both.
• The paperwork trail: the permit number, then the inspection and PTO dates as they happen.
• A status note before PTO: a plain line that the system stays off until the utility approves it, with the next step and who it's waiting on. It heads off the "why isn't it running?" call.
• Incentives, only when confirmed: if a program pays you on the customer's behalf, show it as a credit and track it until the money arrives. If it pays the customer, leave it off your invoice unless your contract says otherwise.

Never show a tax credit as a payment or a discount; it's between the customer and the tax authorities. The pricing guide covers the federal homeowner credit.

Lender funding milestones

When a customer finances through a lender you work with, most of your money comes from the lender, on its schedule. Before you offer the loan, read your installer agreement for:

1. The funding stages: when the lender pays (for example, part at installation and the rest at PTO) and how much each stage releases.
2. The documents each stage requires: for example, a completion certificate signed by the customer, photos taken to the lender's specification, the inspection approval or the PTO letter.
3. Fees and timing: any fee the lender keeps from your payout, and how long funding takes after you submit.

Then keep the paperwork tight:

• Make the contract price, the loan amount and any cash portion add up exactly. Invoice a cash portion on your own milestones, and show the loan-funded amount separately.
• Have the customer sign a completion certificate only when the work it describes is done. A certificate signed early misstates the job to the lender and can leave the customer paying for a system that isn't finished.
• Record each funding when the money lands, not when the loan is approved, and book any fee the lender kept as a job cost.

Example: The same $30,000 system, financed in full. Suppose your lender agreement funds $20,000 at installation and $10,000 at PTO, and the lender keeps a $1,500 fee from the first payment (illustrative figures; yours are in your agreement). The customer's invoice shows a $30,000 price paid by the loan. Your books show $18,500 received at installation, $10,000 at PTO and a $1,500 financing cost on the job. If that fee wasn't in your price, your margin on the job is $1,500 thinner than you planned.

If you install for a company that will own the system under a lease or power purchase agreement, that company is your billing customer, and your agreement with it sets the milestones and proof. Work the homeowner orders from you directly, such as a roof repair outside that agreement, goes on a separate contract and invoice.

Change orders when the survey finds a panel problem

One surprise can change a solar price after the sale: a main panel that can't take the solar connection. Price it and get it signed as a change order before the work, never as a line that first appears on an invoice.

When a system connects through a breaker in the main panel, the electrical code your jurisdiction has adopted limits how much current the panel's busbar can be fed from the utility and the solar together. An older, smaller or already full panel may not meet that limit or have room for the breaker. Fixes include replacing the panel, connecting on the supply side of the main breaker where the code and the utility allow it, reducing the main breaker where a load calculation supports it, or making the system smaller. Each has its own price, permit scope and schedule.

The change order should show:

• What the survey found, with photos of the panel's label and interior.
• Each option offered, its price, and the one the customer chose.
• The schedule impact: a revised permit or plan set and, for a panel replacement, often a utility appointment to disconnect and reconnect service, plus any added inspection.
• Which milestone the new amount is billed with.
• Signatures before any work, plus the lender's approval if the job is financed.

If your contract listed a panel upgrade as a possible adder with its price, the change order confirms the price the customer saw at signing. How to handle change orders covers the general process. Use the same steps for other survey findings: roof repairs needed before the array goes on, reinforcement an engineer calls for, a longer conduit or trench run, or a meter or service change the utility requires.

Example: On the $30,000 job above, the survey finds the panel can't take the connection, and the customer approves a $3,500 panel replacement (a made-up price) before any work. The contract total becomes $33,500. The installation invoice shows the $14,000 milestone plus "Change order 1: main panel replacement, approved before work began, $3,500," for $17,500 due. If a loan funds the job, it still covers only $30,000 unless the lender increases it, so either the loan is updated through the lender's process or the customer pays the $3,500 directly.

Lien waivers with each payment

Trade a lien waiver for each milestone payment, and collect waivers from everyone you pay on the job. A lien waiver gives up lien rights for the amount paid. Homeowners and lenders may ask for one before releasing a payment, and a lender may want a final waiver before its last funding.

• One waiver per payment, naming the milestone and the amount.
• Conditional until the money clears. Give a conditional waiver while a check or lender funding is pending, and an unconditional one once the funds are in your account.
• Waivers from the people you pay. Collect them from your distributor and any subcontractors, such as an electrician, roofer or trenching crew, as you pay them. Depending on your state, a supplier or subcontractor you don't pay may be able to claim a lien against your customer's home even after the customer has paid you.

Waiver forms, lien rights and deadlines are set by state law, and some states require their own forms. Use your state's form if it has one, and have a construction attorney review your templates. Your own lien rights have deadlines too, so if a final payment stalls after PTO, act before they pass; how to collect overdue invoices covers the steps.

Record every serial number before the final invoice

Capture serial numbers while the equipment is on the ground and the crew is on site, because once the customer pays, nothing sends anyone back up the ladder to read a label.

• Modules: make, model, wattage, count and each serial number, photographed or scanned before the modules go up.
• Inverters and module-level electronics: every serial, plus an array map showing which microinverter or optimizer sits under which module, so a failed unit can be found and swapped without guesswork.
• Batteries and other hardware: battery and gateway serials, rapid shutdown devices, any production meter and the monitoring hardware.
• Commissioning: the monitoring account set up in the customer's name, with every device reporting.

Register warranties before the final invoice goes out. Check each manufacturer's terms for whether registration is required, any deadline, and whether coverage depends on installer certification, then register in the homeowner's name and attach the confirmations. State your own workmanship warranty separately, including how you handle roof penetrations and leaks.

Send a closeout package with the final invoice: system summary, serial list and array map, permit number, inspection and PTO dates, warranty confirmations, your workmanship terms, monitoring login instructions and how to reach you. The homeowner may need it for a warranty claim, an insurance update or the sale of the house.

If you substituted equipment that the proposal, permit plans or interconnection application didn't list, invoice what you installed, record it, and ask the building department and the utility whether they need a revision. If the swap changes the system's size or price, it's a change order.

Service calls and detach-and-reset jobs

• Service calls. Record the monitoring data and readings that showed the problem, what you replaced, and every serial number removed and installed. Show a part covered by the manufacturer's warranty at no charge, with its serial. If the manufacturer pays you for warranty labor, file through its process and don't also bill the homeowner for those hours.
• Detach and reset for a reroof. Bill removal and reinstallation as separate milestones. Before anything comes off, document the system working: photos, the serial list and a monitoring screenshot showing production. That record protects you if a module turns up damaged after storage or after the roofing crew worked around it. Bill the reinstall once the system is producing again, and ask the building department whether it needs its own permit and inspection.

Before you send a solar invoice

• The milestone matches the contract, with its proof attached.
• Change orders are signed, dated and on their own lines.
• Cash payments and lender fundings add up to the contract price.
• A lien waiver is ready for this payment.
• On the final invoice: serial list, array map, warranty confirmations, permit number, and inspection and PTO dates.