Banking a Commercial Solar Contractor Through a Multi-State Project

Say a project's panel and inverter order, worth $400,000, needs to be placed and paid for well before the first customer milestone payment, which itself won't clear until permitting and interconnection approval come through, a process that can take anywhere from a few weeks to several months depending on the state and utility. That gap has to be bridged with a credit line or a reserve, sized to your actual procurement lead time rather than an optimistic estimate, and a contractor who sizes it against their fastest-ever project rather than a realistic average is setting themselves up for a shortfall.

Procurement and working-capital lines for EPC contractors are typically priced off the bank prime rate, which stood at 6.75 percent as of mid-2026¹, so the cost of bridging that procurement gap is a real, calculable number that should factor into how you price a project's timeline risk, not an afterthought once the line is already drawn. A project bid in a slow-permitting state should reflect that extra financing cost in the price, not just in the contractor's private worry about cash flow.

A contractor running projects across several states, each with different permitting and interconnection timelines, benefits from a dedicated account per active project so a fast-moving project in one state doesn't mask a stalled one in another sitting on procurement costs with no milestone payment yet in sight. Relay's multiple checking accounts under one login support this without separate bank relationships per project, and it gives project managers a clear, specific number to report on rather than a vague sense of how their project is tracking.

Larger EPC contracts often require performance bonding, and a bonding company or project lender will want to see clean, project-separated financial records, which is easier to produce from dedicated per-project accounts than from a single blended operating account where you'd have to reconstruct project-level detail from transaction memos. A contractor who can hand over clean per-project records tends to move through underwriting faster than one who needs weeks to reconstruct the same picture by hand.

A contractor working a single, familiar state with a predictable permitting timeline and one or two projects running at a time can manage on a single Mercury account with a manual reserve sized to the known procurement gap, adding per-project accounts once you're operating across states with genuinely different timelines to track. The moment you sign your first project in an unfamiliar state is a reasonable trigger to reassess whether the simpler setup still fits.

A contractor's first project in a new state rarely follows the same permitting and interconnection timeline as their home market, since utility processes and local permitting offices vary meaningfully even between neighboring states. Padding the procurement reserve on that first out-of-state project, and treating its actual timeline as new data rather than assuming your home-state experience will hold, avoids a cash surprise on exactly the project where you're also managing the most other unknowns.

Before a first project in a new state, do the following:

• Research the local permitting and interconnection timeline instead of assuming it matches your home market, since utility processes vary even between neighboring states.
• Pad the procurement reserve on that first project to cover the slower end of the likely timeline.
• Open a dedicated account for the project, so a stalled job cannot hide behind a fast one elsewhere.
• Budget for utility interconnection application fees, which are paid before any customer milestone clears.

Utility interconnection applications often carry their own fees, paid to the utility well before a project reaches any customer milestone payment, and on a multi-project pipeline those fees add up to a real, if modest, drain on cash that's easy to overlook next to the much larger equipment procurement costs. Track interconnection and permitting fees as their own small category within each project's procurement reserve, since a contractor bidding several projects into new utility territories at once can find these smaller fees compounding into a meaningful number faster than expected.

Once a project is installed and generating power, an ongoing operations and maintenance contract with the customer can become a small but genuinely recurring revenue stream, a useful counterweight to the lumpy, project-by-project nature of EPC work itself. Tracking O&M revenue separately from new project revenue shows leadership how much of the business's cash flow is becoming predictable and recurring versus how much still depends entirely on winning and completing the next big installation.