The uneven Q2 financial results reported by SolarCity earlier this month appear to have set in motion the first tangible steps towards stemming the losses that have become second nature to the firm.
In a regulatory filing yesterday, SolarCity confirmed that its compensation committee of its board of directors had agreed to reduce the salaries of CEO Lyndon Rive and his brother, CTO Peter Rive, from $275,000 to just $1.
In a largely symbolic gesture – and one that follows in the footsteps of SunPower, which did likewise with its CEO Tom Werner last week – the move forms part of a wider restructuring process that will see the solar lease provider incur charges of between $3 million to $5 million.
According to the SEC filing, the bulk of these losses will consist of severance benefits, which suggests an unspecified number of jobs will be lost at the company over the second half of the fiscal year 2016. SolarCity has confirmed that it will not be providing additional details on the number of roles lost at this stage.
These decisions form part of SolarCity’s fledgling effort to realign its operating expenses after another chastening set of financial losses in Q2. As reported by pv magazine, losses are nothing new to SolarCity, but its business model of placing long-term growth ahead of short-term profit has suffered more bumps in the road than the firm’s board had prepared for, with losses in H1 2016 well exceeding revenues.
SolarCity ended Q2 with just $146 million in cash and equivalents, but does expect an upturn after Q3, partly as a result of increased installations – the firm expects to install 315 – 415 MW in Q4.
However, annual guidance for the year has been reduced to 900 MW to 1 GW of new installations, down from earlier forecasts of 1 GW to 1.1 GW.