Aurora Solar’s Layoffs: Failure to Meet Targets Results in 20% Staff Reduction

Despite record growth in the solar industry last year, software startup Aurora Solar has laid off 20% of its staff of about 1,000 people, TechCrunch has exclusively learned. The company, which provides software to help solar installers manage their sales, project design and installation process, has missed its growth targets for the past year, a source said. It’s possible that Aurora Solar hit stiffer headwinds than expected in California, where changes in net metering led to homeowners getting paid about 75% less for power sold back to utilities. With net metering rates slashed, the state has decided to offer richer incentives for solar installations that include batteries. While Aurora Solar says its software is used by 90% of the top 100 solar installers, it also has more than 7,000 customers, many of which likely fall in the long tail of the distribution, those that say they’re under the most pressure.

Record-breaking growth in the solar industry last year has taken a toll on Aurora Solar, a software startup that has had to make the difficult decision to lay off 20% of their 1,000 person team, as reported exclusively by TechCrunch.

The company, which offers software to help solar installers streamline their sales, project design, and installation processes, has missed its growth targets over the past year, according to a source. This round of layoffs comes after a smaller reduction of around 20 employees in November.

Aurora Solar had pulled in a substantial $200 million in their Series D funding round, which closed in February of 2022, just nine months after a successful $250 million Series C raise. In total, the company has raised an impressive $523 million, per PitchBook data.

Despite multiple attempts for comment, the company has not provided any official statements.

It’s possible that Aurora Solar has faced unexpected challenges in California, where changes to net metering have resulted in homeowners receiving significantly less compensation for the power they sell back to utilities. This development doesn’t necessarily indicate a significant decline in demand among single-family homeowners for solar systems, but it may have altered the industry’s growth trajectory.

According to data from Aurora Solar, the net metering changes sparked a surge of interest last year, likely from homeowners attempting to take advantage of the previous regulations before they expired.

While the state has lowered the compensation rates for net metering, they have introduced more appealing incentives for homeowners who opt to install batteries alongside solar panels. However, this added complexity presents a challenge for door-to-door sales representatives, particularly those who work independently and may not have the resources to fully explain the details of a home’s battery system.

To determine the design and permitting requirements for a battery system, sales reps must consider factors like the household’s daily energy usage, the size of the home’s electrical panel, and the optimal location for the batteries. Alternatively, solar panels can be sold with the assistance of satellite imagery of a home’s roof and surrounding environment, which software can analyze to accurately determine the potential energy production of a solar array.

As a result of the new regulations, smaller installers are feeling the pressure. While Aurora Solar claims to have 90% of the top 100 solar installers as customers, they also have over 7,000 customers total, many of whom are likely among the smaller installers who are facing the greatest challenges. Overall, the California solar industry is estimated to have lost 17,000 jobs in the past year.