An array of solar panels, located near McMinnville, Oregon. 

George Rose | Getty Images

An array of solar panels, located near McMinnville, Oregon. 

The state of Oregon has recovered $13 million it paid to Tesla for solar power projects, after an investigation concluded the company inflated prices to qualify for higher tax credits, said a report in the Oregonian/OregonLive on Thursday.

Tesla Energy, formerly known as SolarCity, overstated the costs of 14 large-scale solar power projects in the state by 100 percent to secure the higher credits, the report said. An investigation by the Oregon Department of Justice determined that Tesla was only entitled to $6.7 million of the $16.7 million in tax credits it collected for the projects.

The settlement included $12.5 million in restitution and $500,000 in legal fees.

Neither Tesla Energy nor its accounting firm, Novogradac & Company, admitted wrongdoing in the settlement, it added.

Tesla said in a statement sent to CNBC that SolarCity had provided accurate information in its tax credit applications and was “entitled to every dollar of tax credits that it received.” The company said the Oregon attorney general made “hyperbolic claims” of “false applications” and “inflated costs” and that the dispute reflected differing interpretations of Oregon tax credit regulations.

The Oregon attorney general’s office was not immediately available for comment to CNBC.

Tesla’s solar power business has been the subject of scrutiny and some criticism ever since Tesla absorbed it through its acquisition of SolarCity. Tesla CEO Elon Musk chaired SolarCity and the company counted some of his close relatives as top executives.

Shortly before the acquisition, Musk demonstrated a new kind of glass roof tile Tesla was developing that would be able power a home with solar energy. But in the last two years, very few of these “solar roofs” have been installed.