Hello. We are using submodules and so our appveyor.yml looks something like this (exact repo names changed so that we can leave this discussion public):

version: 1.0.{build}  
install:  
- ps: >-
    $fileContent = "-----BEGIN RSA PRIVATE KEY-----`n"
    $fileContent += $env:priv_key.Replace(' ', "`n")
    $fileContent += "`n-----END RSA PRIVATE KEY-----`n"
    Set-Content c:\users\appveyor\.ssh\id_rsa $fileContent
    git submodule -q update --init --recursive
cache:  
  - packages -> **\packages.config
  - util/packages -> util\**\packages.config
before_build:  
  - nuget restore util\Util.sln
  - nuget restore Toplevel.sln

You can see we tried to cached the submodule packages. This actually works, but then the problem is that when the packages are restored the submdodule directory gets created, so then the submodule fetch fails. Here is our build log:

Build started  
git clone -q git@github.com:toolwatch/toplevel.git C:\projects\toplevel  
git fetch -q origin +refs/pull/154/merge:  
git checkout -qf FETCH_HEAD  
Restoring build cache  
Restoring "packages"...OK  
Restoring "util/packages"...OK  
Running Install scripts  
$fileContent = "-----BEGIN RSA PRIVATE KEY-----`n"
$fileContent += $env:priv_key.Replace(' ', "`n")
$fileContent += "`n-----END RSA PRIVATE KEY-----`n"
Set-Content c:\users\appveyor\.ssh\id_rsa $fileContent  
git submodule -q update --init --recursive  
git : fatal: destination path 'util' already exists and is not an empty directory.  
At line:5 char:1  
+ git submodule -q update --init --recursive
+ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    + CategoryInfo          : NotSpecified: (fatal: destinat...mpty directory.:String) [], RemoteException
    + FullyQualifiedErrorId : NativeCommandError

Clone of 'git@github.com:toolwatch/util.git' into submodule path 'util' failed  

Command executed with exception: Clone of 'git@github.com:toolwatch/util.git' into submodule path 'util' failed

One workaround would be if the cache restore happened after the install scripts. This would allow us to fetch our submodules, and then restore the packages into them.

Another workaround would be for appveyor to natively support fetching submodules. I know Travis does this. To be honest I haven't thought much about this, so there might be very good reasons for your approach. Just noting it as an extra complication vs. Travis.

Also, FYI, the cache restore step isn't listed here: http://www.appveyor.com/docs/build-configuration

The workaround for now is to just stop caching the submodule packages. The downside to this is that sometimes the nuget package fetch fails, of course, so we get false failed builds.