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Report: SEC probes SolarCity over customer cancellation disclosure

Federal securities regulators are investigating whether SolarCity has adequately disclosed how many customers canceled contracts, the Wall Street Journal reported.

The Securities and Exchange Commission is probing whether SolarCity, the nation's largest installer of residential rooftop solar, and one of its competitors, Sunrun Inc., have done enough to disclose to investors the number of customers who cancel contracts for solar energy systems once they have signed up, the report said, citing an unnamed person familiar with the matter.

A SolarCity spokeswoman told the Journal that the company “has remained focused on reporting the quality of our installed assets, not pre-install cancellation rates. Our growth projections have always been based on actual deployments.”

SolarCity's owner, Tesla Inc., reported Wednesday that the solar energy company's business has slowed, with the generating capacity of the solar energy systems it deployed during the first quarter falling to 150 megawatts, down from 201 megawatts during the final three months of last year.

Tesla executives said the slowdown was due to a renewed focus on more profitable installations and conserving cash, rather than growth "at any cost."

SolarCity plant remains on track despite slowdown in company's business, Tesla says

Tesla recently said SolarCity no longer will use door-to-door sales as a way to find customers, focusing instead on online marketing and sales generated through its network of Tesla electric vehicle stores.

The Journal, citing people familiar with the matter, also reported that early in 2016 about half of its customers were backing out of their contracts before the solar energy systems could be installed.

SolarCity is preparing to begin production this summer at a sprawling solar panel factory in Buffalo that is expected to be the largest in the Western Hemisphere.

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