Merchant Accounts for Solar Panel Companies: A Complete Guide

Solar Panel Payment Processing

The solar panel industry is thriving as more people adopt sustainable energy solutions. However, solar panel businesses face unique challenges when setting up merchant accounts. Here’s everything you need to know about why these companies are considered high-risk, what’s involved in the application process, and how pricing works for high-risk merchants.

Why Are Solar Panel Companies High Risk?

Merchant account providers classify solar panel companies as high-risk for several reasons:

• Large Transaction Sizes: Solar panels are expensive, and big transactions increase the financial risk for providers.
• Delayed Delivery: There’s often a long gap between order placement and installation, increasing the risk of disputes.
• MOTO (Mail Order/Telephone Order): Payments taken over the phone are more prone to fraud and chargebacks, as the card isn’t physically present.
• Non-Delivery Risks: If a project is delayed or the company faces financial instability, customers might dispute payments, leading to potential losses for the payment processor.

Why Merchant Account Providers Decline or Terminate Solar Accounts

Declined and terminated accounts are common amongst Solar Panel companies. Providers may hesitate to work with solar panel businesses due to:

• High Chargeback Rates: Frequent disputes signal risk and instability.
• Inadequate Processing History: A lack of experience with payment processing can make providers wary.
• Weak Financial Stability: Providers prefer businesses with a stable financial footing.
• Non-Compliant Policies: Missing or unclear terms, refund policies, or cancellation policies can raise red flags.

Payment Methods for Solar Panel Companies

Offering multiple payment options is vital for customer convenience and smooth transactions. Common methods include:

• MOTO: Great for taking deposits or payments over the phone.
• Face-to-Face (F2F): Portable card machines are ideal for in-person consultations or showroom payments.
• Pay by Link: Send secure payment links via email or text, allowing customers to pay online. These integrate easily with invoicing systems.

What to Expect When Applying for a Merchant Account

Getting a merchant account for a solar panel business involves submitting specific paperwork. Be prepared to provide:

• Proof of ID for all directors or shareholders owning more than 25% of the business.
• Proof of a business bank account.
• Proof of directors’ residential addresses.
• Proof of the business address.
• Six months of processing history, if applicable.
• Terms and conditions for your business.
• A refund and cancellation policy.

Having clear and comprehensive documentation reassures providers that your business is legitimate and reliable.

Pricing for Solar Panel Companies

As a high-risk business, your pricing structure will differ from standard low-risk companies. Here’s what you can expect:

• Higher Transaction Fees: Due to the perceived risk, rates may be slightly higher than average.
• Rolling Reserves: A percentage of your transactions (e.g., 10%) might be held for a set period, such as 180 days, to protect against chargebacks.
• Delayed Settlements: It’s common for high-risk merchants to experience longer waits before funds are deposited into their accounts.
• IC++ Pricing Structure: Solar panel companies often fall under IC++ pricing, where acquirers add a margin on top of interchange and scheme fees. Understanding this structure is essential for managing cash flow. If you’re unsure, don’t hesitate to ask for help.

Wrapping It Up

While getting a merchant account for a solar panel business can be challenging, it’s manageable with the right preparation. By offering diverse payment methods, maintaining clear policies, and being proactive with documentation, you can set your business up for success. If you’re unsure where to start or need tailored advice, our team is here to help guide you through the process.