The SEC is reportedly investigating Tesla's solar business

The SEC is looking into whether Tesla’s solar division is hiding the number of customers it’s lost, the Wall Street Journal’s Kirsten Grind first reported.

The SEC is probing Tesla’s solar unit and Sunrun, a solar installation company based in San Francisco, according to the report. Regulators are looking into whether both companies accurately disclosed the number of customers who canceled their contracts, according to the report.

Tesla told the WSJ:

“[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.”

Tesla absorbed roughly $US3 billion in debt when it bought SolarCity in a deal worth $US2.1 billion last November. As part of the acquisition, Tesla is rolling out a new solar roof product that CEO Elon Musk has said will be cheaper than a normal roof before factoring in the price of electricity.

Customers can order two of Tesla’s four solar shingle options in “the coming weeks,” Musk said during a TED Talk last Friday. The remaining solar shingles won’t hit the market until 2018. Panasonic is making the solar cells for the roof at Tesla’s solar plant in Buffalo, New York.

Tesla’s SolarCity unit is still installing traditional solar panels, though the company has been strapped for cash for its solar panel leasing strategy. In October, SolarCity said it was selling more panels to improve cash flow. SolarCity laid off 3,000 employees following the Tesla acquisition.

Read the full WSJ report here.

Get the latest Tesla stock price here.

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