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The Coachella Valley-based solar panel installation company Renova Energy is putting its employees on furlough for at least three weeks following the ongoing collapse of the partner company that provides the solar panels it installs and that had been one of its major investors.
CEO Vincent J. Battaglia told The Desert Sun on Friday that he made the decision to temporarily layoff the employees after the partner, SunPower, informed Renova Energy that it would not be making a payment it owes them.
“That’s created a cashflow crisis within the company,” he said. “I used my own money to make sure my employers were paid this week – payroll is in excess of half a million dollars – and I just don’t have enough cash to take care of next week’s payroll so I have put everyone on layoff for the next three weeks.”
Founded in 2006, Renova Energy sells and installs rooftop solar systems in California and Arizona. In 2022, SunPower announced it was investing in Renova Energy and that Renova would become part of SunPower’s dealer accelerator program and exclusively selling SunPower systems. SunPower is based in San Jose.
In an email to customers, Battaglia said the pause in operations is “a temporary condition that will be remedied over the next few weeks, and you can count on hearing from us.”
“Once our partner/debtors take proper financial steps, I feel confident that we can properly serve our desert communities by continuing to build and service tens of thousands more solar and battery microgrids,” he wrote in the letter.
The Desert Sun reached out to SunPower but did not immediately receive a response.
Why SunPower is in crisis mode
Reuters reported Friday that SunPower has been dealing with several crises, including plummeting sales and a subpoena it received in February from the U.S. Securities and Exchange Commission.
The company’s CEO has since left and in April it announced plans to reduce its workforce and eliminate most of its direct sales channels as part of a restructuring. Many observers believe the company will eventually be delisted from the stock exchange and go out of business.
“They’re going through a failure caused by their mismanagement, and we just are too closely aligned with their investment with us, and as a result, what happened to them has affected us,” Battaglia said of SunPower.
He added that he has other investors he will try to pull in over the next three weeks to ensure the company is no longer dependent on SunPower and can resume operations in August.
He explained that the company’s ability to bring back its employees will likely be gradual as the company’s ability to pay payroll “will be a little slow.” He said the company currently has 350 employers and he is hopeful to bring back 60 or 70 by September and increase the numbers from there.
Battaglia explained that the situation began developing Wednesday when SunPower said it would no longer honor any of Renova’s solar system leases with the company. That created a problem because SunPower typically sent the company money every Friday and already owed Renova $1.9 million.
The Renova CEO said he demanded that Renova pay the $1.9 million, which would have allowed him to keep making payroll. SunPower initially promised to make partial payment by Friday but never did so.
“It’s being responsible, I just don’t want people to work and maybe not be able to pay them next week,” Battaglia said of his decision. “So I had to tell everyone ‘look, take a temporary stay for a couple of weeks, I will call you back.’”
Battaglia said he and his executive team will continue to work every day and that a letter was also sent to customers explaining the situation. He also said that if any customers have issues with their solar panels they need to call SunPower, which is responsible for the actual panels, not Renova, whose role is limited to installation.
He said that he was optimistic that the company will be able to bring everyone back and that the underlying fundamentals of the solar industry are strong despite political changes in California that he said have roiled the solar industry and contributed to SunPower’s demise.
“The genie is out of the bottle,” he said. “This isn’t going away.”
This is a developing story.