Electrical contracting is a massive industry valued at more than $130 billion annually. More than 70,000 electrical contracting firms and more than 650,000 electrical workers contribute to the electrical contracting industry in the U.S., delivering power and communications to homes, businesses, and public services providers.
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Electrical contractors can be either individual electricians or companies that perform installation, service, maintenance, and/or repair services in commercial, industrial, and/or residential settings. Becoming an electrical contractor is an exciting step in an electrician’s career, as it means making the shift from employee to business owner.
How Electrical Contracting Companies are Organized
As an electrical contractor, it is your job to design, install, and maintain electrical and communications systems. Your electrical contracting business may consist of a large, multi-area contracting firm, a small business of just a few employees– or just you.
Your work or the work of your company will likely fall into one of the following realms:
- Outside/Line Contracting involves working with high-voltage power transmission and distribution lines. These contractors focus on power plants, high-voltage lines, and substations.
- Inside Contracting involves wiring buildings, homes, and other structures. These contractors focus on electrical and cabling design, installation, and maintenance.
- Integrated Building Systems (IBS)/Voice Data Video (VDV) deals with low-voltage installation, maintenance, and repair. These contracting businesses focus on the integration of systems such as:
- Back-up power
- Climate control
- Security systems
- Fiber optics
- Wireless networks
- Energy-efficient lighting
The Large and Small Scale Projects Electrical Contractors Handle
The projects electrical contractors work on range from large commercial construction projects to small residential repairs:
Commercial and Industrial Projects
In commercial and industrial settings, electrical contractors work on large projects in office buildings, schools, hospitals, as well as factories, assembly plants and distribution centers, among many others. These contractors are hired to design and install electrical systems, panels, switchgear, wiring, and related equipment, including lighting fixtures, switches, and receptacles.
Electrical contractors for commercial jobs must bid competitively to get the job. They usually work as a specialty subcontractor under a general contractor. In some instances, they may work directly for the building owner and are hired as part of a design-build team. It is not uncommon for commercial projects to extend for months or even years.
Service and Maintenance Jobs
Electrical contractors in service and maintenance provide service and repair in residential and commercial settings. Their services are usually accomplished in a single visit, billing for their services on a flat fee schedule or on a cost-plus-fee basis.
Some electrical contractors in this area also have regular maintenance contracts in place with their clients. These contracts include the preventive maintenance of a building’s entire electrical system.
Residential work has become a lucrative business for many electrical contractors, thanks to the many integrated electrical and communication systems in homes, including security and entertainment systems.
Residential electrical contractors perform upgrades to home offices and home theaters. Renovation projects often include installing automated environmental controls, relocating electrical receptacles, upgrading electrical panels, and installing new lighting.
How to Become an Individual or Business Electrical Contractor
Although laws and regulations can vary significantly from one jurisdiction to the next, you must generally hold a master electrician’s license to qualify for an electrical contractor’s license.
Making the move from master electrician to electrical contractor involves adhering to state and/or local laws and regulations.
To become a master electrician, most state and municipal licensing authorities require the following:
Step 1. Complete an Electrical Apprenticeship
Initial training to become a journeyman electrician requires completing between 500 and 1,000 classroom hours and between 8,000 and 10,000 hours of supervised experience through an apprenticeship.
Step 2. Meet State Requirements to Become a Journeyman
In most states, a journeyman electrician license requires meeting the minimum theory and practical training hours and passing a written examination based on the National Electrical Code, electrical theory, and local electrical codes.
Step 3. Qualify to Earn a Master Electrician License
Generally, journeyman electricians spend about two years (4,000 practice hours) practicing under this license before becoming eligible to apply for a master electrician license. A master electrician license authorizes electricians to pull permits, design electrical systems, supervise job sites and other electricians– and apply for an independent electrical contractor’s license.
Applying for an Electrical Contractor’s License
It’s important to understand that an electrical contractor license is a business license, while a master electrician license is a professional license; therefore, you cannot hold a contractor’s license without being first licensed as a master electrician.
There are some exceptions, though. Some states, including Texas, allow you to apply for an electrical contractor license, provided you employ at least one licensed master electrician. Similarly, in Colorado, electrical contractor registrations are issued to any firm owned wholly or in part by a licensed master electrician, and any licensed master electrician may apply for an electrical contractor’s registration. Other firms applying for an electrical contractor’s registration must employ a licensed master electrician in a supervisory capacity.
While the majority of states license electrical contractors at the state level, other states, like Illinois, do not, instead leaving it up to municipalities to oversee their licensing.
Contractor licenses come with their own set of eligibility requirements, which many times involves passing an examination and meeting specific experience requirements.
For example, in New Jersey, contractor licenses are issued to firms or individuals who can show proof of at least five years of practical experience in electrical construction and installation and pass a written examination.
In some states, electricians have a number of options for working as an electrical contractor. For example, in Florida, electrical contractors may be locally registered (by filing evidence of a current occupational license and compliance with local examination and licensing requirements) or state certified (by taking and passing the state licensing examination). Certified electrical contractors can practice throughout the State of Florida.
Most jurisdictions also require electrical contractors to obtain a business permit and carry the appropriate liability insurance. For example, in Texas, electrical contractors must carry at least:
- Minimum $300,000 per occurrence
- Minimum $600,000 aggregate
- Minimum $300,000 aggregate for products and completed operations
License renewal generally occurs on a biennial basis. In most cases, continuing education requirements must be met for the purpose of electrical contractor license renewal, with hours distributed among specific areas.
For example, in Florida, both certified and registered contractors must complete at least 14 hours of Board approved continuing education during each biennial period. At least 7 of those hours must be on technical subjects; one hour in workers’ compensation; one hour in workplace safety; one hour on business practices; and one hour in an advanced course.