Costing and Pricing Solar System – SS2 Solar Photovoltaic Installation & Maintenance Lesson Note (Third Term)

A Bill of Quantities (BOQ) is a detailed list of everything needed to finish a solar installation, with the quantity, unit price and total cost of each item. It lets the customer see what they are paying for and helps the installer avoid forgetting small items. The price depends on component quality, site complexity and exchange rates.

Behavioural objectives

By the end of the lesson, students should be able to:

• State what a Bill of Quantities (BOQ) is and give reasons why it is important.
• List the items under the three main sections of a solar BOQ.
• Explain the factors that determine the price of a solar system.
• Describe three ways of setting a professional fee for installation work.
• Distinguish between markup and profit, and explain the purpose of a warranty fund.

What is a Bill of Quantities (BOQ)?

In simple terms, a Bill of Quantities (BOQ) is a detailed shopping list. It gives the quantity, the unit price and the total cost for everything needed to finish a solar installation.

Why is the BOQ so important?

1. Transparency: It shows the customer exactly what they are paying for.
2. Accuracy: It helps the installer make sure they do not forget small things like screws or cable clips.
3. Comparison: It allows the customer to compare your prices with another technician fairly.

What are the “hidden” items?

Beginners often remember the big things (panels, batteries) but forget the small things (trunking, lugs, tapes). A good BOQ covers everything from the roof to the ground.

What are the sections of a solar BOQ?

A professional BOQ is usually divided into three main sections.

1. Primary components (the big items)

• Solar panels (e.g., 4×550W)
• Hybrid inverter (e.g., 3.5kVA)
• Batteries (e.g., 2×200Ah lithium)

2. Balance of System (BOS) and accessories

• Mounting racks (aluminium rails)
• Solar cables (6mm² DC cables)
• Battery cables and connectors
• Protection gear (circuit breakers, surge protection device (SPD) and changeover switches)

3. Logistics and labour

• Transportation (moving gear to the site)
• Installation fee (workmanship)

What determines the price of a solar system?

When you do a cost analysis, you look at why a system costs a certain amount. Several factors can change the price of your BOQ:

• Quality of components: A lithium battery costs 3 times more than a lead-acid battery, but it lasts 5 times longer. Part of your job is explaining this “value” to the client.
• Site complexity: Is the roof very high? Is the battery room far away from the panels? Long distances mean more expensive copper cables, which increases the cost.
• Market exchange rates: Since most solar parts are imported into Nigeria, the price of panels can change from Monday to Friday based on the dollar rate.

Pro-tip: Always put an “expiry date” on your quote (e.g., “Valid for 7 days”) so you do not lose money if prices jump suddenly.

How do you set your professional fee?

Deciding how much to charge for your workmanship is where many new entrepreneurs struggle. There are three ways to decide your price:

1. Percentage of materials: Some technicians charge 10% to 15% of the total cost of the hardware.
2. Daily rate: You calculate how many days the job will take and multiply it by a fair daily wage for yourself and your helpers.
3. Flat fee based on system size: For example, charging a fixed amount per kVA installed (e.g., ₦50,000 per kVA).

Remember: Your fee must cover your time, your tools, your transport, and the “brain work” of designing the system correctly.

What is the difference between markup and profit?

To stay in business, you must understand the difference between the cost price and the selling price.

• Markup: This is the extra amount you add to the cost of the materials to cover your overhead (office rent, data, phone calls).
• Profit: This is what is left over after you have paid for all materials, paid your helpers, and covered your transport.

What is the warranty fund?

A smart solar business owner keeps a small portion of the profit in a separate account. If a customer calls three months later because a wire came loose, you use that fund to go back and fix it without it “hurting” your pocket.

Evaluation

1. What is a Bill of Quantities (BOQ)?
2. Give three reasons why a BOQ is important.
3. Name the three main sections of a solar BOQ and give one item under each.
4. State three factors that affect the price of a solar system.
5. Explain the difference between markup and profit.

Assignment

1. A client wants a system with 4×550W solar panels, a 3.5kVA hybrid inverter and 2×200Ah lithium batteries. List these items and at least four accessories under the correct BOQ sections. You do not need to write prices.
2. Describe the three ways of setting a professional fee, and state which one you would choose and why.