The investigation raises regulatory pressure on the world’s most valuable automaker, which is already the subject of a federal safety investigation into accidents linked to faulty driver assistance systems in its cars.
There have been reports of fire concerns caused by faults in Tesla’s solar systems, but this is the first report of an investigation by the Securities and Exchange Commission.
The authority revealed the investigation in response to a request from Stephen Hincks, a former quality officer at Tesla who, during his tenure at the company, filed a complaint about defects in solar energy systems in 2019.
Heynckes, who previously served as director of quality at Toyota Motor, was fired from Tesla in August 2020 and sued the company, claiming the dismissal was in retaliation for raising safety concerns about solar energy systems.
In his complaint to the Securities and Exchange Commission, Hincks said that Tesla and SolarCity, which was acquired by Tesla in 2016, did not disclose the “potential for liability (of their products) to cause property damage, user risk, fire and other harm to shareholders” before and after the acquisition.
The complaint notes that Tesla also failed to notify its customers that faults in electrical conductors could lead to fires.
Tesla has told consumers it needs to perform maintenance on the solar panel system to avoid a malfunction that could shut down the system.
Hinx said, however, that it did not warn of the risks of fires and did not offer temporary closures to mitigate risks or report the problems to regulators.
According to Hincks’ lawsuit filed in November last year against Tesla Energy over what he claims was unfair dismissal, the problem has affected more than 60,000 US homes and 500 government and commercial agencies.
It was not clear how many customers continued to use the solar systems after Tesla conducted the repair program.
Concerns about defective connectors and problems with Tesla’s solar systems go back several years, and lawsuits have also been filed against the company for the same reason.
The retailer Walmart said in a 2019 lawsuit against Tesla that the solar panel system caused seven fires in its stores. Tesla denied the allegations and the two sides agreed to a settlement.
According to documents provided by legal transparency group PlainSight, several homeowners or the insurance companies they represent have sued Tesla and Amphenol, which supplies panel components, over fires linked to their solar systems.