From the San Francisco Business Times

San Francisco solar company Sunrun manipulated sales figures before the company went public in August 2015, former managers said this week, a development that adds to the debate about how solar companies report their data.

The Wall Street Journal reports this week that Sunrun managers were told not to report customers who had canceled their contracts with the company during five months in the middle of 2015. The tactic was designed to make the company’s sales numbers look stronger as Sunrun went public that summer.

“The big internal push was to cram as many sales as we could through the pipeline,” Darren Jennings, a Sunrun regional sales manager in Hawaii from February 2015 until February 2017, told the paper. “If those deals canceled, we would not report it.”

Three other managers told the paper that they had engaged in similar behavior, including delaying how many cancellations their divisions had tallied. The number of cancellations eventually totaled around 40 percent of Sunrun’s Hawaii orders from May 2015 to October 2015, or around 200 cancellations, the Journal reports.

Sunrun sent the following statement to the Business Times on Tuesday. You can read it in its entirety here.

“First, our interests are aligned with our customers – we want to make sure our sales efforts encourage the highest conversion of customers who are the right fit for solar. There is some judgment in determining when an installation might not proceed – my direction to our employees is to make these calls with integrity and always focused on the customer,” CEO Lynn Jurich says in the statement.

“With respect to the specific allegation that sales employees changed cancellation dates in our system to December 31, 2099 between May and October 2015 in order to delay reporting of cancellations, we reviewed the digital audit trail in our systems. Our review to date has turned up no evidence that this occurred.”

Earlier this month, news broke that Sunrun and San Mateo-based SolarCity(which is owned by Tesla) are being investigated by the SEC for potentially obfuscating how many customers they are losing, a person familiar with the matter told the Wall Street Journal at the time.

Both companies are being probed over whether or not they have adequately disclosed how many customers signed up for solar systems but later canceled their contracts.

The issue is an important one because cancellations can gauge the financial health of a company — and because there have been ongoing allegations that some customers feel pressured into buying solar services, which they then cancel. The cancellation numbers at both companies, which are publicly traded, have become increasingly important to investors worried about their growth and the future of solar tech in general.

“Some customers say they were strong-armed into buying solar-energy systems by sales representatives who threatened to sue them if they didn’t proceed with a project or to place a so-called mechanic’s lien on their homes—a measure used to force a homeowner to pay for a home-improvement project,” the Journal reported.

“Others say they didn’t realize they had actually signed contracts. Many said they believed they were just giving permission for a consultation.”

The paper reported at the time that Sunrun’s cancellation figures were as high as 40 percent in the first two quarters of 2017, a development which prompted the San Francisco solar company to slash its growth expectations from 80 percent to 40 percent, sources told the Journal.

“The cancellation rates were especially high among customers who were approached by salespeople at their doorstep or while they were shopping at big-box stores, these people say,” the Journal reported.



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