Sunrun Inc.'s audit committee is investigating a Wall Street Journal report that employees of the residential solar company manipulated sales data around the time of an initial public offering in August 2015.
According to the May 22 article, former Sunrun managers said they were told by superiors to delay internally reporting hundreds of customer cancellations in order to make sales appear stronger. The newspaper on May 3 reported that the Securities and Exchange Commission is examining whether Sunrun and competitor SolarCity Corp., which is now part of Tesla Inc., have adequately disclosed customer cancellation rates.
Sunrun said the review was triggered by concerns over how many customers who sign up for solar systems ultimately receive installations. "Sunrun's executive team is committed to transparency and looks forward to taking any and all appropriate actions in response to the Audit Committee's eventual findings," the company said in a brief statement on its website. "We remain committed to doing what is right for our customers and shareholders at all times."
Sunrun CEO Lynn Jurich said on an earnings conference call May 10 that the term "cancellation" is misleading in the residential solar business. "So I think when people hear the word cancellation, they jump to, 'Oh, no, these customers have installed systems and now they are not paying and they're trying to cancel it.' It's very much not the case," Jurich said. "[We] believe it's the right sales process to get that upfront signature, but then have a natural fallout through that process."