The solar boom has resulted in more jobs and lower electricity bills across the U.S., but this rapidly growing sector has also endured its share of dubious business practices.
As the Wall Street Journal reported on Wednesday, the Securities and Exchange Commission (SEC) is investigating several solar companies over how they disclose the cancellation of solar power projects. And mired in the controversy is Tesla, which still faces questions over its much anticipated Model 3 and a quarterly report that revealed larger financial losses than projected.
WSJ reporter Kirsten Grind suggested that companies, including upstart Sunrun and legacy SolarCity (which Tesla acquired last year), may have been less than forthcoming about how many potential customers nixed their contracts after signing up for residential solar power systems.
Such numbers are important to investors as they attempt to gauge these companies’ future performance within what is still a very new industry. Meteoric growth within the sector has led to fierce competition and aggressive tactics, including constant telemarketing, door-to-door solicitation, and even following potential customers at stores such as Lowe’s and Home Depot.
The result is the signing of many solar installation contracts, which are quite often canceled after consumers had second thoughts.
Strong-armed maneuvers by solar companies have led to a rash of complaints to attorneys general in states such as Texas, Oregon and California. With cancellation rates at individual companies approaching 50 percent, some investors believe these figures must be disclosed. But some firms may have been less than transparent about how many signed contracts actually become revenue-generating projects.
Tesla has since told Grind that it is no longer sending its sales force to homeowners’ front doors, but the SEC investigation is still underway.
This revelation comes as Tesla remains mum about when exactly its new line of sleek solar panels will hit the market.
This is not the first time Tesla has had to cope with an SEC inquiry. Last year, the agency investigated the company for not disclosing a customer’s death tied to a Tesla vehicle’s auto-pilot feature. Some reporters questioned the timing of that disclosure to the sale of about $2 billion in company stock by Tesla and its founder, Elon Musk, which resulted Musk slapping back in an angry tweet storm.
While Tesla has long enjoyed a reputation for delivering vehicles with superior performance, and continues to gain consumer loyalty, this latest chapter shows that the company can hardly rest on its laurels.
Last month, Tesla announced with fanfare that it would also enter the trucking industry. Analysts say that both autonomous and electric technologies could transform this sector into one that is cleaner and safer. Considering its short and impressive history, Tesla’s bold announcement temporarily cheered investors and its stock price enjoyed a quick spike in value. But not so fast, said some startups, including Starsky Robotics -- which is keen to develop self-driving trucks that could haul freight across the U.S.
Another electric truck company, the Workhorse Group, also says it has a plug-in hybrid truck that could give current and future trucking companies such as Tesla a run for their money.
The Workhorse W-15 PHEV pickup truck, which boasts 460 horsepower and can go zero to 60 miles per hour in 5.5 seconds, wowed some attendees at a recent auto show in Southern California. Its sticker price for now is $52,500, which could at first put off some fleet managers, to whom Workhorse is marketing this truck.
But Kyle Field of the blog CleanTechnica estimates that the truck’s long-term fuel savings and lower maintenance costs would result in a lower total cost of ownership (TCO) than a comparable Ford F-150. “The savings add up quickly, paying off the purchase price premium in around 2 years,” Field wrote, “meaning that fleet managers will be able to rake in these savings for the rest of the life of the vehicle, resulting in the lower TCO.”
Image credit: Steve Jurvetson/Flickr
Leon Kaye has written for TriplePundit since 2010, and became its Executive Editor in 2018. He's based in Fresno, CA, from where he happily explores California’s stellar Central Coast and the national parks in the Sierra Nevadas. He's lived in South Korea, the United Arab Emirates and Uruguay, and has traveled to over 70 countries. He's an alum of the University of Maryland, Baltimore County and the University of Southern California.