Solar & Battery Installation Businesses: Valuations in a Hot Market

The solar and battery installation sector is booming. But like all market frenzies, smart buyers and sellers alike need to ask: what are these businesses really worth?

The Current Buzz: STCs and VPPs Driving Growth

Right now, the energy transition is pouring fuel on valuations. Solar installers benefit from Australia’s Small-scale Technology Certificates (STCs), which are effectively upfront rebates that juice cash flow and keep customer acquisition moving. On top of that, batteries are now more widely adopted, enabling another layer of opportunity: the Virtual Power Plant (VPP).

VPP participation transforms one-off installation businesses into recurring revenue platforms. If an operator can enrol 250 battery customers into a VPP program, that might represent $100K to $150K in annual recurring margin—highly attractive for a sector not known for annuity income.

Valuations: What Multiples Are We Seeing?

For most solar and battery installers with modest scale (sub-$20M turnover), the transaction band remains grounded:

2.5x to 4x EBITDA for traditional models (no VPP, lumpy cashflow)

4x to 5.5x EBITDA where battery penetration is high and operational maturity is evident

5.5x+ may be achieved, but only where there is:

Significant recurring revenue

National footprint

Proprietary tech or vertically integrated components

Strategic buyers and private equity are circling, but these multiples still anchor around what a realistic buyer can recoup in 3 to 5 years. Most SMEs won’t justify unicorn valuations unless the business is truly platform-ready.

A Word of Caution: The Insulation Analogy

There’s precedent for this kind of hype: remember the insulation gold rush? Government subsidies inflated valuations, operators popped up overnight, and prices soared. But as soon as incentives changed or customer sentiment cooled, many of these businesses fell away.

Solar might not collapse the same way—but regulatory exposure, tech disruption, and rebate sunset timelines are all real risks. Buyers must tread carefully and structure deals that reward sustained performance, not just today’s inflated books.

What to Watch

STC Phase-down: As the number of certificates per install declines each year, cashflow will tighten.

VPP Monetisation: It's real, but still immature. Don’t over-index it unless contracts are locked in.

Battery Subsidies: New grants may keep margins high in the short term.

Final Thought

Solar & Battery businesses valuations should reward operators with clean books, scalable systems, and strategic capability—not just those riding the policy wave. The energy transition is real, but as with all booms, value will shift from quick wins to long-term operators.

If you’re selling: lock in upside with an earn-out.

If you’re buying: underwrite for discipline, not hype.