SEC Probes Solar Companies Over Disclosure of Customer Cancellations
Federal regulators are investigating whether solar-energy companies are masking how many customers they are losing, according to a person familiar with the matter.
The Securities and Exchange Commission is examining whether San Francisco-based Sunrun Inc. and Elon Musk’s San Mateo, Calif.-based SolarCity Corp. have adequately disclosed how many customers have canceled contracts after signing up for a home solar-energy system, the person said.
Investors use that cancellation metric as one way to gauge the companies’ health. Companies typically give customers a few days after signing a contract, or even up until the time of installation, to back out of a deal.
Hundreds of complaints have been filed against solar companies to attorneys general in Texas, Oregon, California and Florida, with customers saying they are paying more on their utility bills, not less as they were promised, and have been sold expensive systems they can’t afford, according to Freedom of Information Act requests filed by the Campaign for Accountability, a consumer-watchdog group, and according to lawsuits filed by customers.