SolarCity delivered another disappointment to its investors Monday, scaling back its growth forecast for this year for the second time since last fall.
In a sobering earnings report, delivered on the same day that members of minority community groups rallied in Buffalo to demand greater hiring on the SolarCity construction project at RiverBend in South Buffalo, the company said that it expects to install fewer solar energy systems than it expected because it booked fewer orders during the first quarter.
SolarCity said that it now expects to install between 1,000 and 1,100 megawatts of solar generating capacity this year, down from its scaled-back forecast from last fall of 1,250 megawatts. SolarCity’s shares, which closed Monday at $22.51, tumbled by 20.57 percent, or $4.63, in after-hours trading, falling to $17.88.
Company executives blamed the shortfall on uncertainty over how regulators in a variety of states handle incentives for solar energy systems, including a decision by Nevada officials not to back away from an earlier ruling that reduced payments to solar energy system owners, including those whose systems were installed before the new rules took effect.
They also said the weaker orders stemmed in part from some consumers speeding up their decisions to install solar energy systems late last year because of uncertainty over whether key federal tax credits would be extended. That federal investment tax credit, which can reduce the cost of a solar energy system by 30 percent, was extended in mid-December. With the tax credit now in place for five more years, some commercial customers have lost their sense of urgency in deciding whether to install solar.
“We had a bunch of head winds that hit us – all at the same time,” SolarCity CEO Lyndon Rive said during a conference call. “These all temporarily affected us. These head winds that hit us in the first quarter, they’re past now.”
One bright note: First-quarter installations were stronger than expected, rising by 19 percent to 214 megawatts, better than the 180 megawatts the company had forecast.
Meanwhile, representatives of groups seeking greater employment for minorities on the SolarCity project rallied outside the Main Street headquarters of project contractor LPCiminelli on Monday morning.
The protesters took issue with reports from LPCiminelli, based on contractor payroll records, that women and minorities have worked 24.6 percent of the hours put in by construction workers on the project since work began in May 2014. The protesters sought more detail about the makeup of the SolarCity workforce, including how many people working on the project are considered to be women and minorities.
While the workforce participation exceeds the 20 percent target for employment of women and minorities set within a project labor agreement for the SolarCity factory, the protesters noted that the goal is less ambitious than the state’s new guidelines that call for a 25 percent minority and 5 percent female participation rates.
Kevin C. Schuler, an LPCiminelli spokesman, said that representatives of the groups met with company officials Monday and that both sides agreed to have further discussions on ways to increase minority and women involvement in construction projects.
Schuler also said that it is standard within the construction industry to base hiring goals for women and minorities on the number of hours worked. “We both share the same goals and we both see the same barriers to entry,” Schuler said, noting that hiring goals for women and minorities extend to numerous projects beyond the SolarCity initiative. “We’re going to try to actively participate with them.”
Erie County Legislator Betty Jean Grant, D-Buffalo, one of the organizers of the rally, said she was pleased with the nearly 2-hour discussion between the activists and a pair of LPCiminelli representatives.
“We applaud the relationship that is developing between LPCiminelli and the community,” she said on Facebook. “Through interactive dialogue and meetings, we hope to bring the young men in the minority communities of Buffalo further along the road to adequate job training and employment opportunities.”