HMM: SEC Probes Solar Companies Over Disclosure of Customer Cancellations.

The Securities and Exchange Commission is examining whether San Francisco-based Sunrun Inc. RUN -8.06% 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.

Some solar-energy companies have recently disclosed in public filings and earnings calls that increasing numbers of customers are canceling, but the companies have provided few details about the number of cancellations or their impact on the companies’ business.

The SEC recently issued a subpoena to Sunrun and interviewed current and former employees about the adequacy of its disclosures on account cancellations, said the person familiar with the investigation. The SEC is also looking at SolarCity, the person said.

An SEC spokesman declined to comment. Representatives for Sunrun didn’t respond to multiple requests for comment. A spokeswoman for SolarCity said in a statement 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.”

My wife and I looked into solar, thinking that the combination of tax breaks, subsidies, and 300 days of sunshine each year might make it economical — but no.

It looks like increasing numbers of people are coming to the same conclusion.