Saying hardware is a difficult/low margin business is a gross generalization. I am a YC alum who quit the web and software and now happily run a manufacturing business. I boot strapped the business and it turned a profit in 2 months. Less than 1.5 years after launch we employ 30 people and I love going to work every day.
Yes, and also, the solar industry is not necessarily low margin since there is a fixed point to compete against (if your tech is protected with patents enough) - which is the cost of energy from oil/nuclear or other sources; and those are fairly static. If a watt costs 2$, you can charge 10% less and sell as much as you can produce; regardless of production costs. So if you could produce for 1.5$ you could have double digit margins, and the cheaper you make your process, the more margin.
