Windows Service Setup Project differs a bit from Windows Application (Desktop) Setup Project. Consider those following steps to create Setup Project for Windows Service Application.
# Right Click on Solution and Add New Project to your Solution.
# Choose Other Project Type and Setup and Deployment and finally Setup Project to create a new Project, give it meaningful Name. For instance, My Windows Service Project name is ReportDownloader and my Setup Project Name is SetupReportDownloader.
# Right Click on SetupReportDownloader=> Add => Project Output, Finally Select the Project you want to create Setup Project for and Select Primary Out and Click OK to continue.
# Up to this, it is same as Windows Application. Now for Windows Service, Right Click on SetupReportDownloader=>View=>Custom Action. Continue reading