Payment terms and milestones in a solar quotation

Why payment follows the work

Both sides carry risk. An installer who funds all the equipment before payment takes on the cost, and a customer who pays most of the money before work begins takes on the risk. A schedule tied to visible stages shares the risk and avoids arguments about what has been earned.

These are options an installer can offer, not a standard. The right schedule depends on the size of the job, the supplier's terms and what the customer is willing to accept.

Stages an installer can tie a payment to

Choose the stages that match the job and state each one in plain words.

• On accepting the quotation and placing the order.
• On delivery of the equipment to the site.
• On completion of the installation.
• On commissioning, which for a grid-connected system may depend on the distribution company's steps.
• A held back portion released after commissioning or after a defined period, if both sides agree.

Plan for the subsidy being paid afterwards

Under a scheme such as PM Surya Ghar, the customer pays the installer the full amount and receives the subsidy afterwards, so a quotation should not present the subsidy as a discount on the price. The installer cannot count on the subsidy to fund the work.

Make clear in the terms that the customer pays the quoted amount whatever the subsidy outcome, and that any estimate of the subsidy is indicative.

Put it in writing and track changes

Write the stages, and what the customer receives at each, in the terms and conditions. If the customer changes the system size or equipment, issue a revision and restate the schedule, so the amounts always match the current quotation.

Raise invoices for each stage from your accounting tool, because a quotation is an offer and not a GST invoice.

Where this guide stops

This guide gives no percentages or amounts, because no figure is a standard. Settle them for each job and, for large contracts, have the terms checked by a lawyer.

Step by step

1. 1

   Choose the stages

   Pick the stages that match the job, such as order, delivery, installation and commissioning.

2. 2

   Tie each payment to a stage

   State what the customer receives at each stage.

3. 3

   Allow for the subsidy

   Say that the customer pays the quoted amount and that the subsidy is paid afterwards.

4. 4

   Write it into the terms

   Put the schedule in the terms and conditions.

5. 5

   Revise when the job changes

   Issue a revision and restate the schedule if the system or equipment changes.

Common mistakes

• Presenting the subsidy as a discount

  The customer pays in full and receives the subsidy afterwards, so a quotation should not deduct it from the price.

• Asking for most of the money before work begins

  A schedule weighted to the start moves the risk to the customer and invites disputes.

• Leaving the stages vague

  A stage that is not described in plain words cannot be checked by either side.

• Forgetting to restate the schedule after a change

  If the system or equipment changes, the amounts must match the revised quotation.

What to check before you send

• Each payment is tied to a stage the customer can see
• The stages and amounts are written in the terms and conditions
• The quotation says the customer pays the quoted amount whatever the subsidy outcome
• The subsidy is shown as an indicative estimate, not as a discount
• A revision restates the schedule if the system or equipment changes
• Invoices are raised from your accounting tool, not from the quotation

Sources

• MNRE office memorandum on the DCR verification portal, read 10 Oct 2026