Home » Aurora Solar Lays Off 20% of Staff After Missing Revenue Projections in Solar-Rich California

Aurora Solar Lays Off 20% of Staff After Missing Revenue Projections in Solar-Rich California

by Lucas Finis

Despite substantial investments, Aurora Solar has cut nearly 100 jobs as it struggles to keep up with changing policies in California’s solar market. 

Solar installation software provider Aurora Solar has laid off around 20% of its staff, or nearly 100 people, after failing to meet revenue goals in 2023. Based in San Francisco, Aurora Solar provides design and management tools to solar installers across the United States but generates the majority of its business in California. The mass layoffs come just months after the company raised over $200 million in a funding round early last year.

How Did Aurora Solar Miss Its Targets?

Several factors contributed to Aurora Solar’s failure to meet its ambitious revenue and growth projections. The main reason was a major policy change implemented in California that significantly reduced the incentives for homeowners to install rooftop solar photovoltaic systems. 

In January 2023, the state announced it was slashing the amount homeowners were paid for excess electricity generated by their rooftop solar panels and sent back to the electricity grid. Previously, homeowners were paid the higher retail rate for any surplus power exported. But under the new rules, payments were cut to just 4-6 cents per kilowatt-hour of excess generation. This represented a decline of approximately 75% compared to the previous compensation rates.

Aurora Solar

While this policy revision did not eliminate demand in the residential solar market, it almost certainly altered the growth trajectory that Aurora Solar was forecasting. With financial payback periods for solar systems now extended by several years, many homeowners were less inclined to invest in new panel installations. This caused rooftop solar installation rates to plunge in California throughout 2023.

Pressure Mounts for Smaller Solar Installers

Smaller solar installation companies that primarily relied on door-to-door sales tactics were hit especially hard. It became much more difficult to convince homeowners of the financial merits of solar given the slashed export credits. Many smaller solar businesses saw projects canceled or pushed out timelines once word spread about the reduced net metering rates. 

As these smaller installers that comprised a major portion of Aurora Solar’s customer base struggled, they also canceled or failed to renew service agreements with Aurora. This led to a significant shortfall in contracted billings that the software company had banked on achieving in 2023. With the California rooftop market cooling faster than expected, Aurora missed its aggressive targets by a wide margin. 

Outlook for California Solar Market

While large-scale projects continue apace in California, uncertainty lingers around the rooftop sector that has comprised the bulk of Aurora Solar’s customer base. 2024 may bring renewed incentives that reinvigorate demand. However, for Aurora Solar, the near-term focus will be on cost-cutting to weather current industry headwinds. Time will tell if recent fundraising can power the company through this challenging period.

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