Sunrun Falls on Report of SEC Probe Into Solar Cancellations

Sunrun Inc., the largest independent U.S. rooftop company, fell the most in more than 11 months after the Wall Street Journal reported that the Securities and Exchange Commission is investigating whether the company adequately disclosed how many customers canceled contracts.

The San Francisco-based rooftop installer dropped 8.8 percent to $4.75 at the close in New York, the most since May 10, 2016.

The SEC issued a subpoena to Sunrun and is looking into “the adequacy of its disclosures on account cancellations,” according to the Journal report. The SEC is also investigating Tesla Inc.’s SolarCity unit, according to the article. SEC spokeswoman Judy Burns declined to comment.

Sunrun discloses its solar installation figures, which account for canceled contracts, the company said in an emailed statement Wednesday. SolarCity, before its acquisition by Tesla, did the same.

“We only provide guidance on installations and not on bookings and we have been within 1 percent of our annual guidance to investors in both 2015 and 2016 when we have been public,” Edward Fenster, Sunrun’s chairman, said in the statement.

Sunrun last year installed 282 megawatts. It had forecast 285 megawatts.

A SolarCity spokeswoman said 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.” In an earnings note Wednesday, Tesla said it deployed 150 megawatts of solar in the first quarter.

Some investors aren’t looking at canceled deals.

“It suggests that there’s a cancellation number that we monitor, which we do not,” Joseph Osha, an analyst at JMP Securities in San Francisco, said Wednesday. “It doesn’t matter that much. What matters is what they book and what they deploy. The company issues those numbers.”

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