Major Solar Company Accused Of Manipulating Sales Data Before Initial Public Offering
by Chris White, Daily Caller, May 22, 2017
Former managers with solar panel giant Sunrun say they took part in manipulating troves of sales data before the company went public in 2015.
The former managers say superiors told them to wait on reporting data showing hundreds of customers who canceled contracts during a roughly five-month period before the initial public offering. Solar companies usually give homeowners several days to rethink the contract before solar panels are installed in their homes.
Delaying the data would make the company’s financial standing look like a Potemkin Village – a structure meant to mislead shareholders about the health of the company.
“The big internal push was to cram as many sales as we could through the pipeline,” Darren Jennings, who says he was a Sunrun regional sales manager in Hawaii before the IPO told The Wall Street Journal earlier this month. “If those deals canceled, we would not report it.”
He said employees in Hawaii didn’t process nearly 200 cancellations, a number representing about 40 percent of total orders in Hawaii between May 2015-October 2015. Three other managers claimed they also took part in the delays.
Sunrun’s chief executive and co-founder Lynn Jurich said in a press statement that the company had “reviewed the digital audit trail in our systems” and “turned up no evidence that our sales employees changed cancellation dates in our systems to delay the reporting of cancellations.”
The cancellation data influenced the number of Sunrun customers and the shear amount of “megawatts booked,” which describes the amount of energy production generated by home energy systems.
Sunrun was under the gun to reach important internal sales numbers, according to Evan Stockdale, who told reporters he was a regional manager at the company’s home base in California. He said Sunrun held off on reporting the data because it was under the gun to meet important internal sales numbers.
“We were pushed for sales numbers,” he said. “Everybody was on pins and needles.”
Jennings and Stockdale’s claims comes as the Securities and Exchange Commission (SEC) continues investigating whether Sunrun and competitor SolarCity have done enough to disclose to investors the number of customers who canceled contracts for solar energy systems.
SolarCity, for its part, has sought to tamp down concerns that might prop up as a result of the investigation. The company “has remained focused on reporting the quality of our installed assets, not pre-install cancellation rates,” a spokeswoman told reporters earlier this month. “Our growth projections have always been based on actual deployment.”
SolarCity has been accused of increasing mortgage defaults as well. The Silicon Valley company reached long-term lease agreements with homeowners before they defaulted on the mortgages, according to a report from The New York Times in February. There could be even more default cases, the report notes.
Mohammed Ahmed Gangat, a lawyer for the beleaguered company, argued in September 2016 that the company needed to file a document late to a New York court because it had been “inundated” with thousands of lawsuits across the country, all of which named SolarCity as a defendant in foreclosure actions.
Some solar panel customers believe companies are selling them a bill of goods.
Hundreds of solar panel customers, for instance, have complained to attorneys general in areas throughout the South that their utility bills have increased, not decreased as promised, according to Freedom of Information Act requests filed by watchdog group Campaign for Accountability.
Customers also complained solar panel companies threatened to sue them if they didn’t proceed with solar panel purchases. Still others say representatives threatened so-called mechanic’s lien on their homes — a measure used to force a homeowner to pay for a home-improvement project.
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