“Disappointing Growth Results Lead to 20% Reduction in Workforce at Aurora Solar”

Despite record growth in the solar industry last year, software startup Aurora Solar has laid off 20% of its staff of about 500 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.

Despite significant growth in the solar industry in the past year, a recent change in the market has led to difficult decisions for software startup Aurora Solar. According to exclusive information obtained by TechCrunch, the company has had to lay off 20% of its workforce, which consisted of over 500 employees.

Aurora Solar’s software is designed to assist solar installers in managing the various aspects of their business, from sales and project design to installation. However, they have fallen short of their growth targets for the past year, causing the need for these layoffs. This is not the first time the company has had to downsize, as they also had a smaller layoff of about 20 people in November.

Despite these setbacks, Aurora Solar had a successful round of financing earlier this year, raising $200 million in a Series D round that closed in February 2022. This is in addition to a previous $250 million Series C round and brings the company’s total funding to $523 million, according to PitchBook.

When reached for comment, Aurora Solar did not respond.

One potential factor that may have contributed to this situation is changes in net metering regulations in California. These changes mean that homeowners who sell excess power back to utilities are now receiving about 75% less for their energy. While this has not completely decreased the demand for solar among single-family homeowners, it may have impacted the industry’s previous growth trajectory.

Interestingly, Aurora Solar’s data shows a surge of interest in solar installations in California last year, possibly due to homeowners rushing to take advantage of the previous net metering rules before they changed.

In response to the net metering changes, the state has introduced incentives for solar installations that include batteries. However, this has created challenges for door-to-door sales representatives, particularly those who work independently. Unlike selling solar alone, selling batteries requires a more detailed understanding of a home’s energy usage, electrical panel, and placement of the batteries.

While Aurora Solar’s software is widely used by the top 100 solar installers, the company also has over 7,000 customers, many of whom may be in the “long tail” of the distribution. This means they are likely feeling the most pressure from the new regulations. Overall, the California solar industry is estimated to have lost around 17,000 jobs last year.