SolarCity workers install solar electrical panels on the roof of a home in Palo Alto, Calif. in 2011.
Photograph by Tony Avelar — Christian Science Monitor Christian Science Monitor—Getty Images
By Katie Fehrenbacher
August 17, 2016

Solar installer SolarCity, which is in the process of being acquired by electric car maker Tesla Motors, plans to cost cuts this year that include an unspecified number of layoffs and slashing pay for its CEO, according to a regulatory filing on Wednesday.

SolarCity blamed the cost cuts on a lower guidance for solar panel installations than originally forecast.

Earlier this month the company said it planned to install between 900 to 1,000 megawatts of rooftop solar panels in 2016, less than its previous guidance of 1,000 to 1,100 megawatts. One thousand megawatts is about the amount of energy that a large natural gas or coal plant generates.

A SolarCity spokesperson told Fortune: “We’ve been adjusting our costs to align with the amount of solar we expect to install in the second half of the year, and unfortunately that also includes headcount reductions. Out of respect for those impacted, we’re not going to provide additional details.”

SolarCity spent $265.39 million in operating expenses for the three months ended June 30, 2016. That was a big jump from the $175.77 million the company spent for the same period a year earlier.

Analysts with JP Morgan said the lowered guidance suggested that demand could be slowing for home rooftop solar panels in more mature markets like California. Some state regulations that have long supported solar have changed over the past couple of years, making solar panels less economical in some areas.

However, the solar panel industry is growing overall in the U.S. and across the globe. At the same time, it’s also getting more competitive, and the fight over convincing customers to go solar can be expensive

For more on why Wall Street isn’t a fan of the SolarCity deal watch our video.

In its filing on Wednesday, SolarCity (SCTY) said it had begun implementing initiatives “to realign the company’s operating expenses to match the reduced guidance for megawatts installed.” The company said it expects restructuring charges of $3 million to $5 million due to severance benefits.

In addition to planned layoffs, SolarCity’s CEO Lyndon Rive, and his brother, CTO Peter Rive, requested to have their $275,000 a year salaries slashed to $1, the minimum required by law. Billionaire entrepreneur Elon Musk is the cousin of the Rive brothers and the largest shareholder of both SolarCity and Tesla (TSLA).

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If Tesla’s deal to acquire the solar company for $2.6 billion is approved in the coming weeks, the combined company would likely have more layoffs down the road. The companies have predicted that a joined company could deliver $150 million in savings.

A SolarCity spokesperson said “We fully expect to grow again in 2017, but we must reduce costs in the short term to be in a position to do so.”

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