- SolarProfit says it plans to lay off 90% of its current workforce to deal with the market dynamics
- It sees a continuous decline in residential solar demand, thanks to lower electricity prices, inflation and high interest rates
- Industrial demand is also going down as energy prices stabilize and competition increases
Spanish distributed solar and storage installer for self-consumption, SolarProfit has unveiled plans to lay off 90% of its workforce to continue being in business as it blames a significant decline in residential solar demand and a drop in prices due to a sharp increase in competition.
Lower electricity prices and lower disposable income due to inflation and increased interest rates have been driving down demand for residential solar in Spain of late, according to the company.
The company had earlier laid off 30% of the workforce, according to a September 2023 filing citing the same reasons.
Now, in a fresh communication dated April 18, 2024, it has informed that the slowdown in residential demand ‘far from improving, has worsened.’ Demand in the industrial sector has also been equally impacted as energy prices have come down and competition has increased.
SolarProfit’s 2023 EBITDA was a negative of -€33 million, and it says its Q1/2024 financials have continued to worsen.
“The situation generates high liquidity tensions that seriously affect compliance with payment deadlines, due to which the Company at the end of March carried out the communication to open negotiations with creditors to reach a restructuring plan,” shared the management.
In view of the situation, it will lay off 90% of its workforce now under the new employment regulation file (ERE) it has filed. Its execution is expected to happen as soon as possible, it added. The management plans to outsource installations to 3rd party vendors.
Spain’s self-consumption segment recorded more than 26% annual decline in 2023 even as it added 1.94 GW new capacity, reaching a cumulative of over 7 GW, according to APPA Renovables. The association blamed complex bureaucracy for hindering the growth of the sector.
On the other hand, the Spanish solar PV association UNEF pegged Spain’s self-consumption PV additions in 2023 at 1.706 GW, reflecting an annual drop of 32%. The residential solar segment reported the largest decline of 54%, blaming mainly the high energy prices and geopolitical crisis (see Spanish Self-Consumption Capacity Exceeds Nuclear Power).
