solarcity analysts day_2015

2 0 1 5 A N A L Y S T D A Y Delivering Better Energy

This presentation contains forward-looking statements that involve risks and uncertainties, including statements regarding SolarCity’s business strategies; our operational growth and expansion opportunities; our international expansion plans, including our expectations as to lower global module pricing and labor costs outside the United States; the deployment and installation of megawatts, including estimated Q4 2015 and 2016 megawatt installations; future bookings; financial strategies for cash generation and increasing shareholder value; forecasted cash flows from existing Energy Contracts, including related assumptions as to energy production future operations and maintenance expenses, cancellation rates, renewal rates, default rates, amounts of performance based incentives and other identified assumptions; our projections related to decreases in cost per Watt, including our plans to decrease our sales cost per Watt by eliminating higher cost channels, utilizing more efficient channels, and other initiatives, the impact of proprietary technology in decreasing our installation costs, our expectations regarding future hardware pricing, our expectations regarding the maturing efficiency of our operations centers, and our plans to vertically integrate our commercial product offerings along with related projections regarding installation efficiencies and cost savings; our plans to achieve manufacturing economies of scale and associated manufacturing cost reductions; our expectations regarding the Riverbend agreement and the development and construction of the Riverbend facility, including our projection that the facility will be completed and ready to commence operations by Q2 2016, our expectations regarding capital and operating expenses and the performance of our manufacturing operations; our expectations as to future regulatory and policy outcomes affecting our industry, including our belief as to the likelihood of an extension of the Federal Investment Tax Credit and the continued adoption and extension of net-energy metering programs; our projections regarding hypothetical cash flows and tax equity transactions following the schedule step-down in the Federal Investment Tax Credit; our projections regarding the future pricing of utility-generated electricity and customer savings; our liquidity and forecasted access to capital, including assumptions related to the terms of future financing (including risk premiums and interest rates), the sufficiency of committed available financing, the terms and frequency of future securities offerings (including securitization offerings and our expectation that the risk premium of future securitized offerings will decrease consistent with that of mortgages) and our expectations regarding the refinancing of existing debt obligations, including our short-term Solar Bonds; the amount of megawatts that can be installed and deployed based on committed available financing; the success of our product development efforts and customer preferences, including the potential and performance of residential and commercial energy storage products and other new product offerings; and assumptions relating to the foregoing.Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved, if at all. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. In order to meet our projections, we will need to expand our workforce and increase the efficiency of our sales and installation operations relative to what we have achieved to date. Additional key risks and uncertainties include the effect of electric utility industry regulations, net metering and related policies; the availability and amount of rebates, tax credits and other financial incentives; the level of demand for our solar energy systems; the availability of a sufficient, timely, and cost-effective supply of solar panels and balance of system components in each of our geographies; our ability to successfully integrate acquired businesses, operations and personnel; our ability to achieve manufacturing economies of scale and associated cost reductions, our expectations regarding the Riverbend agreement and the development and construction of the Riverbend facility, including expected capital and operating expenses and the performance of our manufacturing operations; the effects of existing and future tariffs and other trade barriers; changes in federal tax treatment; the availability and amount of financing from fund investors; the retail price of utility-generated electricity or the availability of alternative energy sources; risks associated with SolarCity’s rapid growth; risks associated with international expansion; the success of our product development efforts and customer preferences; risks that consumers who have executed energy contracts may seek to cancel those contracts; assumptions as to the value under energy contracts and contract renewal rates and terms, including applicable net present values, performance-based incentives, and other rebates, credits and expenses; SolarCity’s limited operating history, particularly as a new public company; changes in strategic planning decisions by management or reallocation of internal resources; and general market, political, economic and business conditions. You should read the section entitled “Risk Factors” in our most recent Quarterly Report on Form 10-Q and subsequent Current Reports on Form 8-K, which have been filed with the Securities and Exchange Commission, which identify certain of these and additional risks and uncertainties. We do not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as otherwise required by law.

Forward-Looking Statements

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B U S I N E S S D R I V E R S & M E T R I C S

L E A D E R S H I P O F A G R O W I N G O P P O R T U N I T Y

V A L U E O F A S S E T S

M O N E T I Z A T I O N O F E N E R G Y C O N T R A C T S

V E L O C I T Y A N D C O N S I S T E N C Y O F D E P L O Y M E N T S

P R O P R I E T A R Y O R I G I N A T I O N A T L O W E R A C Q U I S I T I O N C O S T S

O P E R A T I N G C O S T E X C E L L E N C E

I N V E S T M E N T I N B E S T - I N - C L A S S T E C H N O L O G Y

G U I D A N C E A N D C O N C L U S I O N

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Strategy Update

Organic origination of long-term Energy Contracts at lower acquisition costs

Best-in-class installation costs through proprietary technology

Monetization of a higher portion of the value of our Energy Contracts through low-cost, long duration financing

Exploring monetization of the full value of some Energy Contracts

Be a catalyst in de-carbonizing the energy infrastructure

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Introduction: Business Drivers and Metrics

Leadership of a Growing Opportunity

Monetization of Energy Contracts and Creation of Asset Value

Investment in Best-in Class Technology

Metric Unit 2014 2015Q1 Q2 Q3 Q4 Q1 Q2 Q3

U.S. Power Capacity:U.S. Installed Generating Capacity GW-AC 1,161 1,169 1,172 1,177 1,182 1,171 1,176 Distributed Solar as % of U.S. Generating Capacity % 0.6% 0.6% 0.7% 0.7% 0.8% 0.9% 0.9%U.S. Installed Distributed Solar Capacity GW-DC 6.7 7.3 7.9 8.6 9.2 10.0 10.8 New U.S. Installed Distributed Solar Capacity MW-DC 483 564 559 719 682 697 796

SCTY Units:SCTY % of New U.S. Distributed Solar Capacity % 17% 19% 25% 25% 22% 27% 32%MW Installed MW 82 107 138 177 153 189 256 MW Deployed MW 82 107 137 176 143 177 205 MW PTO'd MW 83 79 113 138 160 156 203

Energy Contract Pricing of New Deployments (Yr. 1) $/kWh $0.12 $0.12 $0.12 $0.12 $0.13 $0.13 $0.13

Annual Escalator % 1.7% 1.9% 1.9% 1.9% 2.1% 2.1% 2.2%SREC (5-Yr. Portfolio Average) $/kWh $0.01 $0.01 $0.02 $0.02 $0.02 $0.02 $0.02 Energy Harvest (Yr. 1) kWh/kW 1,425 1,416 1,406 1,402 1,404 1,379 1,352

Value Generation and Monetization:Asset Financing in Period (including rebates)* $/W $2.69 $2.04 $2.62 $2.28 $2.35 $2.33 $3.20

Contracted Value of MW Deployed in Period † $/W $3.68 $3.55 $3.37 $3.24 $3.44 $3.49 $3.50Renewal Value of MW Deployed in Period † $/W $0.38 $0.40 $0.38 $0.34 $0.33 $0.34 $0.36

Total Value of MW Deployed in Period $/W $4.06 $3.95 $3.74 $3.58 $3.77 $3.83 $3.86

Cost per Watt**:Sales $/W $0.51 $0.47 $0.49 $0.57 $0.59 $0.53 $0.64 Installation $/W $2.44 $2.28 $2.19 $2.09 $2.09 $2.13 $1.92 G&A $/W $0.30 $0.26 $0.21 $0.20 $0.27 $0.24 $0.27 Total Cost per Watt $/W $3.25 $3.01 $2.89 $2.86 $2.95 $2.91 $2.84

R&D Expenses $M ($1.9) ($3.0) ($4.2) ($10.0) ($12.1) ($12.4) ($17.7)Capital Expenditures $M ($4.7) ($2.9) ($5.8) ($9.5) ($30.5) ($71.6) ($45.7)Change in Working Capital Q/Q $M $28.3 $22.7 $37.0 ($38.1) ($72.3) ($31.7) ($41.7)

Debt and Cash:Debt - Recourse $M ($176.6) ($349.8) ($165.2) ($149.7) ($290.6) ($419.2) ($518.2)Debt - Convertible $M ($230.0) ($230.0) ($730.0) ($796.0) ($796.0) ($796.0) ($796.0)Cash & Short-Term Investments $M $526.2 $429.6 $756.8 $663.6 $586.2 $497.6 $438.7

Current Portfolio ValueUnlevered Pre-Tax NPV Remaining of Cumulative MW Deployed (1.5 GW) $M $2,708Debt – Non-Recourse $M ($995)Net NPV of Cumulative MW Deployed $M $1,713

Proprietary Origination at Lower CostOperating Cost Excellence

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* Weighted average of Q1-Q3 2015 Asset Financing is $2.68** Cost per Watt is based on our quarterly cost calculation methodology we detail on our website

† Updated since original report










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Solar Represents a Plurality of New U.S. Power CapacityTotal U.S. Installed Generating Capacity is ~1,170 GW with 15-20 GW/Yr. of New Gross Capacity since 2010Distributed Solar Accounted for 22% of New-Build U.S. Generating Capacity in 1H15 with Utility-Scale at 23%

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U.S. Distributed Solar Grew at a 40% CAGR2010 to 20143

15-20 GW of New U.S. Generating Capacity per Year1

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Distributed

Solar is Competitive in a Significant Portion of the U.S.Avg. U.S. Retail Electricity Price Is ~$0.13/kWh with 583 TWh Consumed at that Price or Higher4

Total U.S. Residential and Commercial Electricity Sales ≥$0.13/kWh Exceeded $90 Billion in 2014

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Retail Utility Rates Are Rising on Infrastructure SpendingRetail Utility Rates Have Increased despite Lower Energy Prices Due to Infrastructure Capex

CA Rate Reform is Increasing Investor-Owned Utilities’ Baseline Tier 1 Residential Rates Initially to >$0.17/kWh in 2017

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New CA Rate Reform Increasing Tier One Rates6Utility Rates in SolarCity Geographies Are Up 49% since 20045

* Assumes 3% Additional Annual Rate Inflation

3.4% CAGR

4.1% CAGR

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Cleaner, Lower Cost EnergySolar PPAs, Leases, and Loans Lower Customers’ Energy Bills for No Initial Investment

No upfront cost for installation required

Solar energy paid for monthly at a lower $/kWh price than charged by the local utility

Our solar contracts typically generate 50-90% of a customer’s annual electricity needs

Customers able to generate savings of up to 20% from Day One

Avg. Annual Year-1 Savings Of > $400 in

California

SOLARCITY EXAMPLE OF A CALIFORNIA PPA WITH NO DOWN PAYMENT

SolarCity Bill

New Utility Bill

New Avg. Bill~$1,848 /Yr.

Old Avg. Bill~$2,256 /Yr.

$0.15/kWh

$0.15-0.19/kWh*$0.19/kWh

* Because of tiered pricing based on usage in California, the output from solar energy systems also lowers the rate charged by the utility

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SolarCityU.S. Service Territories

Total U.S.

Total U.S. Residential Solar Installations at the End of Q2 2015 7 0.68M 0.73M

/ Total U.S. Single Family Housing Units 8 41.3M 92.2M

= Distributed Solar Penetration of U.S. Single-Family Homes 1.7% 0.8%

Despite Continued Growth, Solar Penetration Remains LowU.S. Solar Penetration of Both Residential and Commercial Buildings Is Below 1%

Residential Solar Is Installed on Only 1.7% of Single Family Homes in SolarCity’s U.S. Service Territories

Over 733k residential solar homes in the United States as of the end of Q2 2015 with ~190k new residential installations in 2014.7

635k new single-family home permits across the Country in 2014, expanding the opportunity.9

Less than 1% solar penetration of the 5.6M commercial buildings in the U.S.10

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The Clear Leader in U.S. Distributed Solar InstallationsSolarCity is the Largest U.S. Residential and Commercial Solar Installer

Installed 28% of Distributed Solar, 15% of Total Solar, and 7% of New Gross Power Capacity in the U.S. 1Q-3Q15

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2009 2010 2011 2012 2013 2014 3Q15 SCTY 3Q15 ResiInstaller No. 2

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SolarCity accounted for more than 1% of all solar installed globally this year

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Potential to Expand SolarCity’s Core Expertise Globally

Acquired ILIOSS for $10M in Aug. 2015

Strong track record with major Mexican corporations

SOLARCITY IS NOW A LEADING C&I INSTALLER IN MEXICO

International opportunities expected to benefit from lower global module pricing and lower labor costs outside the United States

Exploring partnerships with potential long-term asset owners

Example Countries Australia Chile Italy Kenya

Residential Utility Rates ($/kWh) $0.23 $0.15 $0.26 $0.24

Commercial Utility Rates ($/kWh) $0.16 $0.09 $0.19 $0.10

Solar Insolation (kWh/kW) ~1,500 ~1,800 ~1,200 ~1,400

EXPLORING MORE FOREIGN OPPORTUNITIES12

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Regulatory Update

The California Public Utilities Commission’s forthcoming decision on NEM 2.0 is expected to not significantly affect economics for new customers, as state law requires that the new tariff ensure that customer-sited DG “continues to grow sustainably”

New York removed its NEM cap through 12/31/16 while a comprehensive docket called Reforming the Energy Vision (REV) seeks to appropriately value distributed solar/clean energy

Though Hawaii’s public utilities commission capped the state’s NEM program at existing levels, Hawaii is a unique state that (a) already has double-digit rooftop solar penetration and (b) has a very high cost of energy with wholesale rates above the cost of distributed solar

In Arizona, utility SRP’s implementation of anti-solar rate design changes for new installations is being challenged in Arizona federal court

Extension growing increasingly likely as we approach the step-down in the ITC from 30% to 10% on 1/1/17

Nevertheless, we are approaching our business assuming no extension

STATE NET ENERGY METERING (NEM) POLICIES FEDERAL INVESTMENT TAX CREDIT (ITC)

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Regulators Are Continuing Net Energy MeteringRegulators Tend to View Distributed Solar Positively Because Its Benefits Outweigh Its Costs

State-developed mandatoryrules for certain utilitiesNo uniform or statewide mandatoryrules but some utilities allow

No net energy metering

State-developed net energy metering rules ended for new customers

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Project Cash Flow Driven by Units, Production, and Pricing

Solar Insolation Annual hours of sunshine on the panels adjusted for tilt and azimuth

XSystem Size Capacity (kW or MW)

=Annual Energy Production Estimated kilowatt-hours (kWh) of solar energy

produced in year one

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$0.13/kWh ( Energy Contract PriceAll the energy produced by the solar system is sold to the customer at an established $/kWh price with an annual escalator (includesperformance-based incentives)

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$0.035/kWhSREC Price )

Portfolio average, e.g., $0 in California

Certain states require non-renewable energy generators to purchase Solar Renewable Energy Certificates to meet state renewable energy portfolio standards

= =

$1,486(or $0.22/W)

Energy ContractRevenue

Annual revenue is the customer bill plus payments for SRECs. Customers contract for 20 years and we expect to provide energy to the home for at least 30 years

1,332 Hours

260W x 26 Panels = 6.8kW

9,004 kWh

751 Avg. FICOInvestment-grade off-taker

BILLSREC

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*Average of 3Q15 Lease/PPA Deployed; Q315 average including MyPower is 1,352 hours

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Year 0 1 2 3 4 5 6 7 8 9 10 11* 12 13 14 15 16 17 18 19 20Energy Production kWh/kW 1,332 1,325 1,319 1,312 1,306 1,299 1,293 1,286 1,280 1,273 1,267 1,261 1,254 1,248 1,242 1,236 1,229 1,223 1,217 1,211

Annual Degradation (0.5%)Contract (+PBI) Price $/kWh $0.13 $0.13 $0.13 $0.14 $0.14 $0.14 $0.14 $0.15 $0.15 $0.15 $0.16 $0.16 $0.17 $0.17 $0.18 $0.18 $0.18 $0.19 $0.19 $0.20

Annual Escalator 2.2%SREC $/kWh $0.04 $0.03 $0.03 $0.02 $0.01

Rebates/Prepayments $/W $0.10Project Revenue $/W $0.22 $0.21 $0.21 $0.20 $0.20 $0.18 $0.19 $0.19 $0.19 $0.20 $0.20 $0.20 $0.21 $0.21 $0.22 $0.22 $0.23 $0.23 $0.24 $0.24O&M Expenses $/W ($0.02) ($0.02) ($0.02) ($0.02) ($0.02) ($0.02) ($0.02) ($0.02) ($0.02) ($0.02) ($0.18) ($0.02) ($0.03) ($0.03) ($0.03) ($0.03) ($0.03) ($0.03) ($0.03) ($0.03)Gross Project Cash Flow $/W $0.10 $0.20 $0.19 $0.19 $0.18 $0.17 $0.16 $0.16 $0.17 $0.17 $0.17 $0.02 $0.18 $0.18 $0.19 $0.19 $0.20 $0.20 $0.20 $0.21 $0.21

Year 21* 22 23 24 25 26 27 28 29 30**Energy Production 1,205 1,199 1,193 1,187 1,181 1,175 1,169 1,163 1,158 1,152

Annual DegradationContract (+PBI) Price $0.18 $0.19 $0.19 $0.20 $0.20 $0.21 $0.21 $0.22 $0.23 $0.23

Annual EscalatorSREC

Project Revenue $0.22 $0.22 $0.23 $0.23 $0.24 $0.25 $0.25 $0.26 $0.26 $0.27O&M Expenses ($0.15) ($0.03) ($0.03) ($0.03) ($0.03) ($0.03) ($0.03) ($0.04) ($0.04) ($0.04)Gross Project Cash Flow $0.07 $0.19 $0.20 $0.20 $0.21 $0.21 $0.22 $0.22 $0.23 $0.23

Gross Project Cash Flows (Pre-ITC) Valued at $2.56/W NPVThe Foundation of Our Value Creation Rests Upon the Cash Flow Stream of the Underlying Assets

Q3 2015 NPV of Lease/PPA Gross Project Cash Flows before the Investment Tax Credit/Depreciation Was $2.56/W at a 6% Discount Rate

$/W UNIT ECONOMICS FOR THE 172 MW OF LEASES/PPAS DEPLOYED IN Q3 2015:

30-Year NPV: $2.56/W Rebates/Prepayments: $0.10/W (upfront) Contracted NPV: $2.02/W (discounted at 6%) Renewal NPV: $0.44/W (discounted at 6%)

* Inverter replacement assumed in Year 11 at a cost of $0.15/W and in Year 21 at a Cost of $0.12/W** Renewal assumes SolarCity continues to provide energy to the home at a 10% discount to the utility price at the time of renewal

Note: Excludes default rates

In aggregate, the lease/PPA MW Deployed in Q3 2015 are expected to generate unlevered Gross Project Cash Flow (pre-tax equity distributions) of ~$34M in Year One (172 MW x $0.20/W)

Excludes MyPower MW Deployed (See Appendix A)

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Tax Equity Primer

$/W $/W % of Return

Cash Investment in Project ($1.77)

Investment Tax Credit offsetting income tax $1.36 65%

Depreciation offsetting income tax over life of partnership $0.29 14%

Cash Flow from project $0.46 22%

Total Nominal Return $2.11 100%

The Investment Tax Credit (ITC) available under Section 48 of the IRC currently includes a 30% tax credit for solar systems on residential and commercial properties, which is scheduled to be reduced to 10% after December 31, 2016.

While the current ITC focuses primarily on renewable energy property, various iterations of the ITC have existed since 1962, and over its history the ITC has been used by Congress to spur investment in a multitude of industries.

ITC is part of broader General Business Credit under Section 38 that provides tax credits to various asset types, including low income housing, new markets, carbon sequestration, marginal oil wells, and dozens of other industries.

HISTORY ECONOMICS

Pool of sophisticated investors comprised of leading financial institutions and corporates investing for an attractive risk adjusted return

Investor base continues to expand as asset class matures

INVESTOR BASE

SELECT TAX EQUITY INVESTORS

Partnership with SolarCity as 1% Member and Tax Equity as 99% Member

Investment structured with projected “flip” and tenor 6.5 years

Tax Equity partner receives the ITC, accelerated depreciation benefits and a share of cash flow

After Tax Equity partner reaches a target IRR, their partnership interest flips down to 5% and SolarCity can exercise a buyout of the Tax Equity’s interest

PARTNERSHIP STRUCTURE

% Benefit to Tax Equity Partner

Pre-Flip Post-Flip

ITC / Depreciation 99% 0%

Cash Flow 30-40% 5-10%

After-tax IRR 7% to 12%; pre-tax cash IRR 2% to 5%

Tax Equity partner funds $1.75-1.80 / W ($4.55 Fair Market Value * 30% ITC * 1.28 funding multiple)

Return is comprised of 65% ITC, 14% depreciation, 22% cash flow

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Year 0 1 2 3 4 5 6 7 8 9 10 11* 12 13 14 15Gross Project Cash Flow $0.10 $0.20 $0.19 $0.19 $0.18 $0.17 $0.16 $0.16 $0.17 $0.17 $0.17 $0.02 $0.18 $0.18 $0.19 $0.19

Tax Equity Investment $1.77Tax Equity Distributions ($0.07) ($0.07) ($0.07) ($0.06) ($0.06) ($0.06) ($0.05) ($0.01) ($0.01) ($0.01) ($0.01) ($0.01) ($0.01) ($0.01) ($0.01)

Unlevered Project Cash Flow to SCTY $1.87 $0.13 $0.12 $0.12 $0.12 $0.11 $0.10 $0.11 $0.15 $0.16 $0.16 $0.01 $0.17 $0.17 $0.17 $0.18

SCTY Share of Cash Flow 65% 65% 65% 65% 65% 65% 67% 92% 92% 92% 51% 93% 93% 93% 93%Tax Equity Share of Cash Flow 35% 35% 35% 35% 35% 35% 33% 8% 8% 8% 49% 7% 7% 7% 7%

Year 16 17 18 19 20 21* 22 23 24 25 26 27 28 29 30**Gross Project Cash Flow $0.20 $0.20 $0.20 $0.21 $0.21 $0.07 $0.19 $0.20 $0.20 $0.21 $0.21 $0.22 $0.22 $0.23 $0.23

Tax Equity Distributions ($0.01) ($0.01) ($0.01) ($0.01) ($0.01) ($0.01) ($0.01) ($0.01) ($0.01) ($0.01) ($0.01) ($0.02) ($0.02) ($0.02) ($0.02)

Unlevered Project Cash Flow to SCTY $0.18 $0.19 $0.19 $0.19 $0.20 $0.06 $0.18 $0.18 $0.19 $0.19 $0.20 $0.20 $0.21 $0.21 $0.22


Unlevered Cash Flow After-Tax Equity Valued at $3.87/W***In Addition, Tax Equity Enables the Monetization of the Investment Tax Credit (ITC) in Year One

Tax Equity Invests $1.75-1.80/W in Return for a Portion of Gross Project Cash Flow and Most of the 30% ITC/Depreciation

30-Year Unlevered Pre-Tax NPV: $3.87/W Tax equity investment: $1.77/W (upfront) Rebates/Customer prepayments: $0.10/W (upfront) Contracted Unlevered NPV: $1.59/W (discounted at 6%) Renewal Unlevered NPV: $0.41/W (discounted at 6%)

* Inverter replacement assumed in Year 11 at a cost of $0.15/W and in Year 21 at a Cost of $0.12/W** Renewal assumes SolarCity continues to provide energy to the home at a 10% discount to the price at the time of renewal

*** Unlevered Cash Flow Value of $3.87/W on this slide only includes Leases/PPAs; the $3.86/W reference on Slide 5 is a blend including MyPowerNote: Excludes default rates

UNLEVERED PROJECT CASH FLOW OF LEASES/PPAS WITH A 30% ITC Tax Equity Share of Cash Flows: Pre-Flip: 30-40% Post-Flip: 5-10%

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Levering Cash Flows Yields $2.76 upfrontNon-Recourse Project Debt Is Used to Help Fund the Upfront Investment and Target Day One Cash

Aggregation Facility Debt Currently Funds $0.80-0.90/W and Is Expected to Be Refinanced with Long-Term ABS Debt

30-Year Pre-Tax NPV: $3.87/W Tax equity investment: $1.77/W (upfront) Rebates/Customer prepayments: $0.10/W (upfront) Debt monetization: $0.89/W (upfront) Contracted Levered NPV: $0.70/W Renewal Levered NPV: $0.41/W

* Inverter replacement assumed in Year 11 at a cost of $0.15/W and in Year 21 at a Cost of $0.12/W** Aggregation Facility debt assumes the terms of current aggregation facilities (2-yr. maturity)

*** Assumes ABS debt is issued to refinance the aggregation facility debt after two years, an 18-year amortization period, and the average interest rate of our first 4 ABS issuances of 4.5% (the most recent LMC-4 issuance was at 4.4% including fees)


LEVERED PROJECT CASH FLOW WITH A 30% ITC

$/W 0 1 2 3 4 5 6 7 8 9 10 11* 12 13 14Unlevered Project Cash Flow $1.87 $0.13 $0.12 $0.12 $0.12 $0.11 $0.10 $0.11 $0.15 $0.16 $0.16 $0.01 $0.17 $0.17 $0.17

Aggregation Facility Proceeds/Paydown** $0.89 ($0.05) ($0.84)Aggregation Facility Debt Service** 2.75% ($0.02) ($0.02)

Expected ABS Debt Proceeds*** $0.97 ABS Debt Service*** 4.50% ($0.08) ($0.08) ($0.08) ($0.07) ($0.07) ($0.10) ($0.10) ($0.11) ($0.11) ($0.11) ($0.11) ($0.10)

Levered Project Cash Flow $2.76 $0.05 $0.24 $0.04 $0.04 $0.04 $0.03 $0.04 $0.05 $0.05 $0.05 ($0.10) $0.06 $0.06 $0.07

$/W 15 16 17 18 19 20 21* 22 23 24 25 26 27 28 29 30Unlevered Project Cash Flow $0.18 $0.18 $0.19 $0.19 $0.19 $0.20 $0.06 $0.18 $0.18 $0.19 $0.19 $0.20 $0.20 $0.21 $0.21 $0.22

Aggregation Facility Proceeds/Paydown**Aggregation Facility Debt Service**

Expected ABS Debt Proceeds***ABS Debt Service*** ($0.11) ($0.11) ($0.10) ($0.03)

Levered Project Cash Flow $0.07 $0.08 $0.08 $0.16 $0.19 $0.20 $0.06 $0.18 $0.18 $0.19 $0.19 $0.20 $0.20 $0.21 $0.21 $0.22

21

>50% of Value Is Monetized Upfront and the Rest Retained

* Unlevered contracted cash flow net of operations and maintenance expenses and tax equity distributions** Non-recourse aggregation facility debt issuance at a 56% advance rate and a 2.5-3.0% interest rate with the potential to subsequently term out through ABS debt at a 66% advance rate and a 4.5-5.0% interest rate

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

Total Value of MWDeployed

Upfront Cash Remaining Value notMonetized Upfront

$ pe

r Wat

t

Tax EquityInvestment

Plus Rebates/Prepayments:

$1.87/W

Contracted Post-Tax

Equity:$1.59/W* Debt

Monetization:$0.89/W**

Renewal:$0.41/W

Renewal:$0.41/W

$3.87/W

Retention of Contract$0.70/W

Renewal: $0.41/W

Unlevered Sale of Contract $0.55/W

Tax EquityInvestment

Plus Rebates/Prepayments:

$1.87/W

$2.76/W

Retention of approximately1/3 of contract value and 100% of

renewal

>50% of total value and 56% of contracted value monetized

upfront at 2.5-3.0%, and ultimately 66% in securitizations at 4.5-5.0%

6% Discount rate

6% Discount rate

22

Hypothetical Unlevered Cash Flow with a 10% ITC of ~$3.32/WWith a 10% ITC, Tax Equity Investment Could Fall to $0.45-0.50/W and Pre-Flip Distributions to ~10%

Offsetting the Decline in the ITC from 30% to 10%, We Expect Contract Pricing to Be Higher By ~$0.02/kWh by 2017

30-Year Unlevered Pre-Tax NPV: $3.32/W Tax equity investment: $0.48/W (upfront) Rebates/Customer prepayments: $0.10/W (upfront) Contract NPV: $2.23/W (discounted at 6%) Renewal NPV: $0.52/W (discounted at 6%)

* Inverter replacement assumed in Year 11 at a cost of $0.15/W and in Year 21 at a Cost of $0.12/W** Renewal assumes SolarCity continues to provide energy to the home at a 10% discount to the price at the time of renewal


HYPOTHETICAL UNLEVERED PROJECT CASH FLOW OF LEASES/PPAS WITH A 10% ITC

23

Year 0 1 2 3 4 5 6 7 8 9 10 11* 12 13 14 15Gross Project Cash Flow $0.22 $0.22 $0.21 $0.21 $0.20 $0.19 $0.19 $0.20 $0.20 $0.20 $0.06 $0.21 $0.22 $0.22 $0.23

Customer Preyaments/State Rebates $0.10Tax Equity Investment $0.48Tax Equity Distributions ($0.02) ($0.02) ($0.02) ($0.02) ($0.02) ($0.02) ($0.02) ($0.00) ($0.00) ($0.00) ($0.00) ($0.00) ($0.00) ($0.00) ($0.00)

Unlevered Project Cash Flow $0.58 $0.20 $0.20 $0.19 $0.19 $0.18 $0.17 $0.18 $0.19 $0.20 $0.20 $0.05 $0.21 $0.21 $0.22 $0.22

SCTY Share of Cash Flow 90% 90% 90% 90% 90% 90% 91% 98% 98% 98% 93% 98% 98% 98%Tax Equity Share of Cash Flow 10% 10% 10% 10% 10% 10% 9% 2% 2% 2% 7% 2% 2% 2% 2%

Year 16 17 18 19 20 21* 22 23 24 25 26 27 28 29 30**Gross Project Cash Flow $0.23 $0.24 $0.24 $0.25 $0.25 $0.11 $0.23 $0.23 $0.24 $0.25 $0.25 $0.26 $0.26 $0.27 $0.27

Tax Equity Distributions ($0.00) ($0.00) ($0.00) ($0.00) ($0.01) ($0.00) ($0.00) ($0.00) ($0.00) ($0.00) ($0.01) ($0.01) ($0.01) ($0.01) ($0.01)

Unlevered Project Cash Flow $0.23 $0.23 $0.24 $0.24 $0.25 $0.10 $0.23 $0.23 $0.24 $0.24 $0.25 $0.26 $0.26 $0.26 $0.27


Multiple Options to Monetize Unlevered Cash Flows

$/W 30% ITC 10% ITC

Upfront Asset Financing:

Tax Equity Investment $1.77/W $0.48/W

Rebates & Prepayments $0.10/W $0.10/W

Aggregation Facility Debt $0.89/W $1.26/W

Total Upfront Asset Financing $2.76/W $1.84/W

Remaining Value: $1.20/W $1.60/W

Contracted Levered NPV** $0.70/W $0.95/W

Renewal Levered NPV $0.41/W $0.52/W

Value of MW Deployed $3.87/W $3.32/W

CURRENT STRATEGY IS TO MAXIMIZE UPFRONT MONETIZATION EQUITY INVESTMENTS FROM 3RD PARTY FINANCIAL BUYERS ALSO POSSIBLE

$/W 30% ITC 10% ITC

Upfront Asset Financing:

Tax Equity Investment $1.77/W $0.48/W

Rebates & Prepayments $0.10/W $0.10/W

Equity Investment at 7% unlevered IRR* $1.46/W $2.05/W

Total Upfront Asset Financing $3.33/W $2.63/W

Remaining Value:

Renewal Value Yrs. 21-30 $0.41/W $0.52/W

Value of MW Deployed $3.74/W $3.15/W

*Illustrative example; equity investment in contracted cashflows at 8% unlevered IRR would yield $1.34/W and total asset monetization of $3.21** Additional ability to monetize another $0.10 through securitization

5.5% 6.9% 7.4% 7.7% 8.9%

NEP ComparableYieldCo Average

CAFD NYLD Unlevered Year1 Yield of Contracted

Sale at 7% IRR*

Div

iden

d Yi

elds

(201

6 C

onse

nsus

)

COMPARABLE YIELDCOS

24

NPV of Portfolio’s Levered Project Cash Flows of $1.7B*(excluding SRECs)The NPV of Unlevered Project Cash Flows to SolarCity is $2.7 Billion; Project Non-Recourse Debt is $1.0 billion

Power Co Portfolio as of 9/30/15

Cumulative Deployments under an Energy Contract 1.5 GW**

Annual Energy Harvest (2016) 1,400

Average Contract Price (2016) $0.126/kWh

Tax Equity % of net cashflow(2016) 43%

Project Debt ($M) $995

Blended Cost of Debt (%) 4.5%

* Excludes SRECs** Cumulative Deployments under an Energy Contract of 1.5GW excludes 0.1 GW of System Sales 25

-50.0

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2046 2047 2048 2049

O&M Cash to Tax Equity Debt Service Levered Cashflows to SC

Cash flows generated by Energy Contracts

Strong Asset Quality with Predictable PerformanceUnderlying Asset is Contracted Cash Flow that Represents Customers’ Monthly Energy Bills

Low Delinquency Rates and the Predictability of Solar Irradiation Provide High Visibility into Cash Payment Stream

180+ Day Delinquency Rates are Low and Holding Steady kWh Production is Coming in Largely within Forecast

0.6%0.6% 0.6% 0.6%

0.5%0.6%

0.5% 0.5%0.4% 0.4% 0.4%0.4%

0.5%

0.0%

0.2%

0.4%

0.6%

0.8%

Oct14

Nov14

Dec14

Jan15

Feb15

Mar15

Apr15

May15

Jun15

Jul15

Aug15

Sep15

Oct15

Del

inqu

enci

es a

s %

of B

illin

gs

Average FICO score of residential portfolio was >750 as of 9/30/15

Commercial customers largely consist of municipalities and investment grade corporations

0

50,000

100,000

150,000

0%

20%

40%

60%

80%

100%

Sep14

Oct14

Nov14

Dec14

Jan15

Feb15

Mar15

Apr15

May15

Jun15

Jul15

Aug15

Ene

rgy

(MW

h)

Act

ual/U

nder

writ

ten

%

Actual Energy (MWh) Underwritten Estimate (MWh)

Actual/Underwritten %

26

B U S I N E S S K E Y D R I V E R S & M E T R I C S









1

2

3

4

5

6

7

8

9

27

Strategy Targets Lower Cost, Longer Term Financing

Non-Recourse Term Financing

Solar Bonds

$334m Facility at 3.25% + LIBOR

Corporate Revolver

Tax Equity

Non-Recourse Aggregation Facilities

$650M Facility at 2.75% + LIBOR

Long-Term Debt Securitizationat 4.3%-4.8% and Rated A and BBB+

0-1 Year 0-5 Year 8-13+ Years

Development and ConstructionFinancing (DevCo)

Asset Ownership (PowerCo)

28

$240M Facility at 3.25% + LIBOR

$0.1 $0.3 $0.4 $0.4$0.8

$1.7

$2.6

2009 2010 2011 2012 2013 2014 2015 1Q-Q3

New

Com

mitt

ed P

roje

ct

Fina

ncin

g ($

B)

Strong Track Record and Visibility into Financing

Issued first asset-backed securitization (ABS) of distributed solar assets in Q4 2013

Four ABS transactions to date raised $450 million in non-recourse debt collateralized by 317 MW of distributed solar

Total Tax Equity Financing Raised: $4.4B

Tax equity capacity: $929M

Aggregation facility capacity: $398M

MyPower conduit capacity: $77M (increased by $40M in Q4 2015)

Revolver capacity: $19M (increased by $65M in Q4 2015)

Cash and short-term investments: $439M

STRONG FINANCING TRACK RECORD $1.4B IN COMMITTED/UNDRAWN FUNDING AS OF 9/30/15

29

Debt Outstanding as of the End of Q3 2015

Terms (Yrs.)

Underlying MW

$M Outstanding at End of 3Q15

Pre-Tax Cost Recourse Payment

Schedule

Investment-Grade ABS Debt 8-13 317 $425M 4-5% Non-Rec. Amortizing

Aggregation/ MyPowerFacilities 2-3 764 $570M 3-4% Non-Rec. Amortizing

Revolver and Other* <1 $308M 3-4% Recourse Term

Solar Bonds 1-15 $211M 1-6% Recourse Term

Convertible Debt 5 $796M 2-3% Recourse Term

MW Inspected - No Back Leverage 188

MW Inspected – Fully monetized 225

PowerCoDebt

DevCoDebt

* Includes revolver debt of $295 and other debt of $13M

$123M LMC4 Issued at

4.4% WACC and Rated A

Weighted-Average 2.2% interest rate and 1.3 Yrs. Remaining

Term

30

Short Term Maturities Extended to 2017Revolving Debt Facility Maturity Extended and Capacity Increased

Revolving Aggregation Facilities Enable the Recycling of Assets and Are Expected to Be Upsized and Renewed

Outstanding(9/30/15) 2016 2017

Revolver $295M Prior Maturity:Dec. 2016

New Maturity:Dec. 2017

Solar Bonds $211M $176M Due: Sept. 2016

Expected to Be Rolled Over

MyPower Facilities $123M Jan. 2017 Strategy to term outin longer duration ABS

Aggregation Facilities $447M Option for one yr. extension on Dec. 2017 maturity

Strategy to term outin longer duration ABS

31

B U S I N E S S K E Y D R I V E R S & M E T R I C S









1

2

3

4

5

6

7

8

9

32

Installation Process for Customers Includes Six Steps

Sale Survey Design Permit Install PTO

Improving Customer Wait Times

34

MEDIAN DAYS FROM BOOKING TO INSTALL HAS FALLEN ~50% SINCE JANUARY 2013

5060708090

100110120130140150

Jan-

13

Apr

-13

Jul-1

3

Oct

-13

Jan-

14

Apr

-14

Jul-1

4

Oct

-14

Jan-

15

Apr

-15

Jul-1

5

Oct

-15

Med

ian

Day

s fr

om B

ooki

ng to

Inst

all

0 50 100 150 200 250 300Q

3 20

15 In

stal

latio

ns

Days from Booking to Install

Our Process Results in High Customer Satisfaction

60%

70%

80%

90%

NPS

Sco

re %

Q1 2015 Q2 2015 Q3 2015

* Net promoter score is based on a scale of 1-10 in which the percentage of 0-6 scores is subtracted from 9-10 scores

35










1

2

3

4

5

6

7

8

9

50

Proprietary Origination at ScaleMW Booked Grew at a Compounded Annual Rate of 95% from Q3 2013 to Q3 2015

As We Continued to Drive Higher Growth, Sales Unit Costs Increased over the Last 2 Years from $0.40/W to $0.64/W

$0.40 $0.43$0.51

$0.47 $0.49$0.57 $0.59

$0.53

$0.64 $0.61 $0.59

3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15SCTY

3Q15Comp A

3Q15Comp B

Sale

s C

ost (

$/W

)

51

91101

136

218230

206

237

395

345

9571

3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15SCTY

3Q15Comp A

3Q15Comp B

MW

Boo

ked

in P

erio

d

Lead generation Close Performance Marketing Retail partners Home Builder partners Malls Events Canvassing Ambassadors Referrals

• In-home consultation• Phone consultation• Online

Mal

l Car

tTh

e H

ome

Dep

otD

igita

l Ad

Diversified residential sales channels

52

Formulaic Growth in Commercial Sales

2013 2014 2015 YTD

Com

mer

cial

MW

Boo

ked

Com

mer

cial

Sal

es R

eps

by C

ateg

ory

Public Sector National Accounts Agriculture/Water

Mexico MW Booked

53

Reallocating Resources to Lower Cost Sales ChannelsSales Costs Vary Significantly by Channel

SolarCity Already has Channels Operating at Goal Cost Structures

Avg. $0.64

MW Installed by Channel

Sale

s C

ost b

y C

hann

el

($/W

)

54

Note: We will not be disclosing this level of granularity on a regular basis

Achieving Our Sales Cost Goal of $0.40/WGoal Is to Reallocate Resources and Drive Productivity to Improve Cost of Acquisition

$0.64

$0.40

$0.14

$0.10

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

Sales Cost 3Q15 Channel Mix Effect Initiatives incl. ProductivityImprovement

Sales Cost Goal

Sal

es C

ost (

$/W

)

55










1

2

3

4

5

6

7

8

9

56

1834

15 17 17 28 14 215362 70 67

90120

148 139168

203

0255075

100125150175200225

3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15

MW

s In

stal

led

in P

erio

d

Commercial Residential

Best-in-Class Operations Lead the Way in Volumes and CostsMW Installed Have Grown 80% per Year since 2013 to Annualized Pace of >1 GW

Installation Cost/Watt of <$2.00/W is the Lowest Among Publicly-Reported Companies

57

* Installation cost is based on MW Deployed and tranched in period, which was a higher mix of lower cost residential installation in Q3 2015

$2.65 $2.49 $2.44 $2.28 $2.19 $2.09 $2.09 $2.13 $1.92$2.27

$2.87

$1.00$1.25$1.50$1.75$2.00$2.25$2.50$2.75

3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15SCTY

3Q15Comp. A

3Q15Comp. B

Inst

alla

tion

Cos

t ($/

W)

*

Safety and Quality Have Improved with Growth

58

TRAINING PROGRAM

4 training academies All installers go through rigorous employment training

before setting foot on a job site Follow up with continued education online and in

person General leadership training at SolarCity headquarters Dedicated training team

SCTY vs. OSHA Incidence Rates13 Recordable Rate Lost Days

SolarCity 1.8 0.3

Construction (All) 3.6 1.3

Specialty Trade 3.8 1.4

FEWER INCIDENTS AND LOST DAYS THAN COMPARABLE INDUSTRIES

2013-12 2014-03 2014-06 2014-09 2014-12 2015-03 2015-06 2015-09

Failu

re R

ate

Cum

ulat

ive

Inst

alla

tions

Month of failure case creation

Jobs in Fleet Inverter Failure Rate Installer Error Rate

QUALITY: FAILURE RATES HOLDING STEADY WITH VOLUMES

For every 100 employees, SolarCity experiences 1.8 recordable injuries/illnesses (incl. non-serious) in a given year (vs. 3.6 for the construction industry).0.3 of these incidents have lead to misseddays (vs. 1.3 for construction).

SolarCity Product Quality

SolarCity partners with select Tier-1 suppliers and requires them to meet our standards for product and manufacturing excellence, with rigorous third party testing on an ongoing basis

China-based SolarCity quality team (8 staff) and third party auditing firms visit supplier factories on regular basis to ensure our products are built to specification

SolarCity believes that the Useful Life of the Solar modules used in our installations exceeds 35 years.

59

Infrastructure in Place to Serve Key U.S. Solar GeographiesWith 81 Operations Centers, We Are within 30 Minutes of 90% of the Population in Our Geographies14

Our Differentiated Logistics Network Enables Low Costs and Faster Customer Response Time

6 614 17

25

0102030405060708090

0

5

10

15

20

25

30

2011 2012 2013 2014 3Q15

Cum

ulat

ive

New

Operations Centers

Opened Cumulative

60

Zep Offers Proprietary Means to Lower Unit Labor CostsZep Has Enabled Installation Crews to Double Productivity

Inst

alla

tion

Hou

rs p

er k

W In

stal

led

Zep Non-Zep*

* Small sample size

Single mounting system offers efficiencies in training, quality, safety, and maintenance

61

Certain Operations Centers and Commercial Projects Already Performing Above Goals

Q3

2015

Inst

alla

tion

Cos

t ($/

W)

New Offices Mature Offices atOperational Excellence

Offices Focused On Being Optimized

Average

Q3

2015

Inst

alla

tion

Cos

t ($/

/W)

Carports Ground-Mount and Rooftop

Average

Q3 2015 Commercial Installations81 Operations Centers

RESIDENTIALCOMMERCIAL

* Some Q3 2015 installation costs will flow through Q4 2015 cost per watt as MW are deployed and tranchedNote: We will not be disclosing this level of granularity on a regular basis

62

Reducing Installation Cost Goal to $1.50/WLower Hardware Prices and Soft Costs Are Each Expected to Drive ~50% of Cost Reductions

$1.02

$1.50

$0.90

$0.22

$0.10$0.10

$0.00

$0.25

$0.50

$0.75

$1.00

$1.25

$1.50

$1.75

$2.00

Installation Cost 3Q15 Hardware PriceReductions

Normalizing HigherCost Operations

Centers to Avg andLower Mix of Higher

Cost Carports*

Other Initiatives Installation Cost Goal

Aver

age

Tota

l Cos

t per

Wat

t

$1.92

Soft Costs

HardwareCosts

* Current economics in some states support carports but lower revenue numbers will reduce carport projects that generate enough returns

63










1

2

3

4

5

6

7

8

9

64

Broad Technology Portfolio

SOLAR MODULES Silevo Tunneling Junction High efficiency / low cost World record module efficiency of

>22% certified by Renewable Energy Test Center

System design automation Energy production forecasting Logistics and resource management Utility rate tariff database Energy usage evaluations Customer account management Customer applications

SOFTWARE

Fast installation, lower cycle time Superior aesthetics

MOUNTING HARDWARE &BALANCE OF SYSTEM

Real-time energy monitoring Voltage control Energy storage integration

GRID CONTROL SYSTEMS

65

Integrated Module Production Offers New Cost AdvantageVertical Integration into Module Manufacturing to Provide Competitive Edge in Costs and Aesthetics

2017 Goal Is to Produce Modules at a Lower Cost of $0.55/W at a Higher Module Efficiency of 21-22%

Traditional Silicon Modules Silevo ModulePanel Wattage (60-cell) 260 350

Module Efficiency (Cell Efficiency) ~15% (~18%) 21-22% (24%)

Additional Energy Harvest ->5%

Manufacturing cost goal ($/W) ~$0.55/W

Balance of system (BoS) cost reduction - >$0.10/W

Module Efficiency of >22% Certified by Renewable Energy

Test Center

WORLD RECORD MODULE

Silevo’s 350-Watt module is significantly above original 310-W at the time of acquisition due to breakthrough in shingling technology

Silevo cell is bi-facial, which allows for additional energy harvest in commercial and utility-scale installations

66

Higher Efficiency Enables Lower Labor and BoS CostsSilevo’s 350-W Module Utilizes 33% Fewer Panels than Traditional Modules on a Typical House

Silevo installation

16 panels × 350 Watts per panel =

6 kW System Size

Standard installation

24 panels × 260 Watts per panel =

6 kW System Size

Additional mounting planes required

Enables fewer balance of system components and lower labor costs

Increases available energy generation in roof-constrained environments

Higher Efficiency:

67

Largest Solar Panel Factory in the Western Hemisphere Construction at Buffalo is underway with winter weather

incorporated into the schedule Targeting construction completion and initial equipment

installation by Q2 2016 Silevo’s high-volume manufactured product has been

validated by Tier 1 financial solutions; installations underway with manufacturing in China and our Fremont facility

SolarCity will be operating the facility but does not own it, which will be our strategic approach towards manufacturing

68

Zep Enables Better Aesthetics and More Panels on a Roof

Competitor with Traditional Mounting Hardware SolarCity with Zep

69

Note: Competitor image is rendered

Proprietary Residential Mounting Hardware Requires Fewer StepsOur Zep Mounting Hardware Simplifies Installation and Eliminates the Need for Rails and Clips

Zep Enables Lower Installation Costs by Requiring Fewer Components and Less Labor Hours

CORE COMPONENTS

ToolsEnd CapArray SkirtGripDC Wire GripCombiner boxGround ZepInterlockLeveling Foot

70

Continued Investment in Productivity through Simplification

Current Part Count

New Part Count

71

Commercial Mounting Hardware Offers Unique Solution

CORE COMPONENTS

Positive AttachmentBallast Pan Zep Tool

DC Wire ClipSnap BushingPeak Base

Valley Base

Ground Zero

Bridge AssemblyConduit Assembly Tube Connector

ADDITIONAL COMPONENTS

72

Storage Enables Energy Independence

Market Segment Product

Commercial & Industrial DemandLogic reduces peak demand charges

Residential Cleaner, more affordable back-up power

Remote Communities and the Developing World

Microgrids protect against outages and provide more affordable energy

UtilitiesCapacity and power quality services

73

Storage Enables Solar Energy at Night

Building Firm, Dispatchable Power

74

Cleaner, More Affordable, More Resilient GridA Network of Distributed Solar and Storage Systems Enables a Lower Cost, More Reliable Grid

Distributed Energy Resource Aggregation Can Provide Low-Cost Grid Services such as Peak Shaving and Voltage Support

75










1

2

3

4

5

6

7

8

9

76

Conclusion

Originating new solar installations at an annualized rate of >1 GW

New Energy Contracts generating value of ~$3.86 per Watt today with a 30% ITC (and an estimated $3.32 per Watt with a 10% ITC)

Building solar assets at the best cost of publicly-traded peers of ~$2.84/W with a path to $2.25/W in 2017 and ultimately $2.00/W

Deployed and retained portfolio of 1.5 GW generating $135M in annual unlevered and $55M in annual levered cash flow on average over the next five years and a total 30-Yr. NPV of $1.7 billion (excluding SRECs)

Currently monetizing upfront ~2/3 of the value generated, and exploring options to monetize more of the cash flow in year one

Investing in technology to widen our relative cost advantage and enable greater renewable capacity on existing grid infrastructure

- Goal of not owning manufacturing assets on balance sheet77

83 136

285

503

878-898 1,250

0

250

500

750

1,000

1,250

2011 2012 2013 2014 2015E* 2016E*

MW

s In

stal

led

in P

erio

d

Guidance Implies MW Installed Growth of 43% in 2016 vs. 2015

* Based on Q4 2015 guidance of 280-300 MW Installed

78

Long-Term Guidance

79

Metric Unit 2014 2015 2017 2019Q1 Q2 Q3 Q4 Q1 Q2 Q3

U.S. Power Capacity:U.S. Installed Generating Capacity GW-AC 1,161 1,169 1,172 1,177 1,182 1,171 1,176 Distributed Solar as % of U.S. Generating Capacity % 0.6% 0.6% 0.7% 0.7% 0.8% 0.9% 0.9% Continued increase in U.S. Installed Distributed Solar Capacity GW-DC 6.7 7.3 7.9 8.6 9.2 10.0 10.8 Distributed solar generation penetrationNew U.S. Installed Distributed Solar Capacity MW-DC 483 564 559 719 682 697 796

SCTY Units:SCTY % of New U.S. Distributed Solar Capacity % 17% 19% 25% 25% 22% 27% 32%MW Installed MW 82 107 138 177 153 189 256 One Million Customer GoalMW Deployed MW 82 107 137 176 143 177 205 MW PTO'd MW 83 79 113 138 160 156 203

Energy Contract Pricing of New Deployments (Yr. 1) $/kWh $0.12 $0.12 $0.12 $0.12 $0.13 $0.13 $0.13 Increase in Pricing

Annual Escalator % 1.7% 1.9% 1.9% 1.9% 2.1% 2.1% 2.2%SREC (5-Yr. Portfolio Average) $/kWh $0.01 $0.01 $0.02 $0.02 $0.02 $0.02 $0.02 Energy Harvest (Yr. 1) kWh/kW 1,425 1,416 1,406 1,402 1,404 1,379 1,352

Value Generation and Monetization:Asset Financing in Period (including rebates)* $/W $2.69 $2.04 $2.62 $2.28 $2.35 $2.33 $3.20 Seeking to monetize a higher % of value upfront

Contracted Value of MW Deployed in Period † $/W $3.68 $3.55 $3.37 $3.24 $3.44 $3.49 $3.50 Renewal Value of MW Deployed in Period † $/W $0.38 $0.40 $0.38 $0.34 $0.33 $0.34 $0.36

Total Value of MW Deployed in Period $/W $4.06 $3.95 $3.74 $3.58 $3.77 $3.83 $3.86

Cost per Watt**:Sales $/W $0.51 $0.47 $0.49 $0.57 $0.59 $0.53 $0.64 Installation $/W $2.44 $2.28 $2.19 $2.09 $2.09 $2.13 $1.92 G&A $/W $0.30 $0.26 $0.21 $0.20 $0.27 $0.24 $0.27 Total Cost per Watt $/W $3.25 $3.01 $2.89 $2.86 $2.95 $2.91 $2.84 $2.25 $2.00

R&D Expenses $M ($1.9) ($3.0) ($4.2) ($10.0) ($12.1) ($12.4) ($17.7)Capital Expenditures $M ($4.7) ($2.9) ($5.8) ($9.5) ($30.5) ($71.6) ($45.7)Change in Working Capital Q/Q $M $28.3 $22.7 $37.0 ($38.1) ($72.3) ($31.7) ($41.7)

Debt and Cash:Debt - Recourse $M ($176.6) ($349.8) ($165.2) ($149.7) ($290.6) ($419.2) ($518.2)Debt - Convertible $M ($230.0) ($230.0) ($730.0) ($796.0) ($796.0) ($796.0) ($796.0)Cash & Short-Term Investments $M $526.2 $429.6 $756.8 $663.6 $586.2 $497.6 $438.7

Value creationUnlevered Pre-Tax NPV Remaining of Cumulative MW Deployed (1.5) $M $2,708Debt – Non-Recourse $M ($995)Net NPV of Cumulative MW Deployed $M $1,713

* Weighted average of Q1-Q3 2015 Asset Financing is $2.68** Cost per Watt is based on our quarterly cost calculation methodology we detail on our website

† Updated since original report

Questions & Answers

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Appendix A: MyPower Gross Project Cash Flows

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Year 0 1 2 3 4 5 6 7 8 9 10 11* 12 13 14 15 16 17 18 19 20Energy Production kWh/kW 1,488 1,480 1,473 1,466 1,458 1,451 1,444 1,437 1,429 1,422 1,415 1,408 1,401 1,394 1,387 1,380 1,373 1,366 1,359 1,353

Annual Degradation (0.5%)Contract (+PBI) Price $/kWh 0.16 0.17 0.17 0.18 0.18 0.19 0.19 0.20 0.20 0.21 0.21 0.22 0.22 0.23 0.24 0.24 0.25 0.26 0.26 0.27

Annual Escalator 2.6%SREC $/kWh $0.04 $0.03 $0.03 $0.02 $0.01

Rebates/Prepayments $/W $0.04Project Revenue $/W 0.25 0.26 0.26 0.26 0.27 0.27 0.28 0.28 0.29 0.29 0.30 0.31 0.31 0.32 0.33 0.33 0.34 0.35 0.36 0.36O&M Expenses $/W -0.02 -0.02 -0.03 -0.03 -0.03 -0.03 -0.03 -0.03 -0.03 -0.03 -0.18 -0.03 -0.03 -0.03 -0.03 -0.03 -0.03 -0.03 -0.03 -0.03Gross Project Cash Flow $/W 0.04 0.23 0.23 0.24 0.24 0.24 0.24 0.25 0.25 0.26 0.27 0.12 0.28 0.28 0.29 0.30 0.30 0.31 0.32 0.32 0.33

Year 21* 22 23 24 25 26 27 28 29 30Energy Production 1,346 1,339 1,332 1,326 1,319 1,313 1,306 1,299 1,293 1,287

Annual DegradationContract (+PBI) Price 0.27 0.28 0.29 0.30 0.31 0.31 0.32 0.33 0.34 0.35

Annual EscalatorSREC

Project Revenue 0.37 0.38 0.39 0.39 0.40 0.41 0.42 0.43 0.44 0.45O&M Expenses -0.15 -0.04 -0.04 -0.04 -0.04 -0.04 -0.04 -0.04 -0.04 -0.04Gross Project Cash Flow 0.22 0.34 0.35 0.36 0.36 0.37 0.38 0.39 0.40 0.40

$/W UNIT ECONOMICS FOR THE 26 MW OF MYPOWER DEPLOYED IN Q3 2015:

30-Year NPV: $3.77/W Rebates/Prepayments: $0.04/W (upfront) Contracted NPV: $3.73/W (discounted at 6%) Renewal NPV: $0.00/W (discounted at 6%)

• Inverter replacement assumed in Year 11 at a cost of $0.15/W and in Year 21 at a Cost of $0.12/W Note: Excludes default rates

†Updated since original report

1 FERC “Energy Infrastructure Updates” from December 2011 to December 2014 (http://www.ferc.gov/legal/staff-reports.asp)

2 GTM Research/SEIA’s “U.S Solar Market Insight Report Q2 2015” for residential and solar solar capacity and FERC “Energy Infrastructure Updates” ((http://www.ferc.gov/legal/staff-reports.asp) for all other energy capacity

3 GTM Research/SEIA’s “U.S Solar Market Insight Report Q2 2015”

4 EIA’s “2014 Utility Bundled Retail Sales” (https://www.eia.gov/electricity/sales_revenue_price/pdf/table10.pdf)

5 EIA’s “Average Price by State by Provider, 1990-2014” (http://www.eia.gov/electricity/data/state)

6 Based on filings from PG&E (http://www.pge.com/nots/rates/tariffs/tm2/pdf/ELEC_4697-E.pdf), Southern California Edison (https://www.sce.com/NR/sc3/tm2/pdf/3268-E.pdf), and SDG&E (http://regarchive.sdge.com/tm2/pdf/2784-E.pdf)

and assumes an additional 3% annual rate increases per year

7 GTM Research/SEIA’s “U.S Solar Market Insight Report Q2 2015”

8 Single-family housing units based on data from U.S. Census American Community Survey’s “Housing Units by Units in Structure and State” and assumes 1.0% annual growth in the housing stock per year through 2015. Excludes multi-

family, mobile, and other housing units

9 U.S. Census Bureau’s “Building Permits Survey by State – Annual” (http://www.census.gov/construction/bps)

10 Commercial buildings count from EIA’s 2012 Commercial Buildings Energy Consumption and commercial solar installations from GTM Research/SEIA’s “U.S. Solar Market Insight Report”

11 GTM Research – U.S. PV Leaderboard

12 Solar insolation hours based on NREL PV Watts calculator and representative cities in each country. Pricing is derived from a range of sources, including Eurostat, Climatescope, GTM Latin America Playbook, and CFE

13 Bureau of Labor Statistics Incidence rates of nonfatal occupational injuries and illnesses by case type and ownership, selected industries, 2014 (http://www.bls.gov/news.release/archives/osh_10292015.htm)

14 U.S. Census Bureau 2010. Based on the percent of the population, in states where SCTY operates, that reside in zip codes serviceable by SolarCity. Excludes NY, TX, PA and Mexico

Appendix B: Footnotes - (1/1)

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“Asset Financing in Period” represents the aggregate project financing cash receipts in a period. This includes both tax equity investment as well as non-recourse project debt, such as our aggregation and MyPower facilities and solar asset-backed loans. Asset monetization per watt is a ratio of total Asset Monetization in the Period divided by MW Deployed in the period, and reflects only actual cash received in a period whether or not they are specifically related to the actual MW Deployed in the period.

“Customers” includes all residential, commercial and government buildings where we have installed or contracted to install a solar energy system, or performed or contracted to perform an energy efficiency evaluation or other energy efficiency services.

“Energy Contracts” includes all residential, commercial and government leases and power purchase agreements and consumer loan agreements pursuant to which consumers use or will use energy generated by a solar energy system that we have installed or contracted to install. For landlord-tenant structures in which we contract with the landlord or development company, we include each residence as an individual contract. For commercial customers with multiple locations, each location is deemed a contract if we maintain a separate contract for that location.

“Gross Project Cash Flow” forecast represent our estimate of the sum of total cash inflows we forecast from MW Deployed in the applicable period under Energy Contracts over the 30 year expected life of the system. This includes (a) payments that our customers are obligated to pay us over the remaining term of such contracts, (b) associated performance-based incentive (PBI) payments, (c) associated solar renewable energy credits (SRECs) that we have contracted to sell, typically representing 5 years of a total potential term of 15 years, and are net of (d) estimated operations and maintenance, insurance, administrative and inverter replacement costs, based on contractually agreed amounts as well as historic and forecasted expenses. Operations and maintenance, insurance, and administrative costs reflect our operating expenses in our funds, or are estimated at $0.021 per watt and assumed to grow at a 2.5% inflation rate per year, and inverter replacement unit costs are estimated to decline at a (2.5%) rate per year, implying $0.15 per watt in Year 11 and $0.12 per watt in Year 21. Energy production is estimated to degrade at 0.5% per year. For our MyPower Energy Contracts, we use the expected cash flows over the full term of the 30-year contract, and for lease and PPA Energy Contracts with terms less than 30 years, we assume the contracts are renewed at a contract price equal to 90% of the contractual price in effect at expiration of the initial term through the remainder of the expected 30-year system life.

“MW” or “megawatts” represents the DC nameplate megawatt production capacity.

“MW Booked” represents the aggregate megawatt production capacity of solar energy systems pursuant to customer contracts signed (with no contingencies remaining) during the applicable period net of cancellations during the applicable period. This metric includes solar energy systems booked under Energy Contracts as well as for solar energy system direct sales.

“MW Deployed” represents the megawatt production capacity of solar energy systems that have had all required building department inspections completed during the applicable period. This metric includes solar energy systems deployed under Energy Contracts as well as for solar energy system direct sales.

Appendix C – Definitions (1/2)

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“MW Installed” represents the megawatt production capacity of solar energy systems, for which (i) all solar panels, inverters, mounting and racking hardware, and system wiring have been installed, (ii) the system inverter is connected and a successful DC string test has been completed confirming the production capacity of the system, and (iii) the system is capable of being grid connected (including pending a utility disconnect procedure), the latest of which is completed during the applicable period. This metric includes solar energy systems deployed under Energy Contracts as well as for solar energy system direct sales. In each case in-period completion of the above criteria may be demonstrated by written verification by each of the Chief Financial Officer and the President (which may include written sub-certifications).

“MW PTO’d” represents the megawatt production capacity of solar energy systems that have had all required building department inspections completed by the authority having jurisdiction and subsequently interconnected to the utility grid.

“Pre-Tax NPV” represents the net present value at a 6% discount rate of the Levered Project Cash forecast. It includes both the debt proceeds and total debt service including full principal repayment for both (a) actual Aggregation Facility debt drawn down (or expected to be drawn down) and (b) our forecast for Solar Asset-Backed Loans for the underlying MW Deployed in the period. This includes both “Contracted Levered NPV,” which represents the net present value of Levered Project Cash Flow under contract as well as “Renewal Levered NPV,” which represents the net present value of Levered Project Cash Flow forecast from renewal.

“Unlevered Project Cash Flow” represents our forecast of Gross Project Cash Flows after both Tax Equity Investment and Tax Equity Lease/PPA Distributions. “Tax equity Investment” represents the total expected investment from our tax equity funds investors in our lease and PPA Energy Contracts. “Tax Equity Lease/PPA Distributions” are based on the terms of the agreements we have in place with our tax equity investment partners for the MW Deployed in the applicable period under lease and PPA Energy Contracts. We do not use tax equity investment for our MyPower product. For tax equity investment in our lease and PPA Energy Contracts, our investment partners share in a portion of the Gross Project Cash Flow forecast received over the term of the agreement. Our estimate is not inclusive of any potential buy-out of our tax equity partners’ interests in the project after Year 20.

“Unlevered Pre-Tax NPV” represents the net present value at a 6% discount rate of the Unlevered Project Cash forecast. It includes (a) the Tax Equity Investment as well as the Gross Project Cash Flows after Tax Equity Lease/PPA Distributions. This includes both “Contracted Unlevered NPV,” which represents the net present value of Unlevered Project Cash Flow under contract as well as “Renewal Unlevered NPV,” which represents the net present value of Unlevered Project Cash Flow forecast from renewal of our lease/PPA contracts.

“Value of MW Deployed” represents the Unlevered Pre-Tax NPV of MW Deployed under an Energy Contract during a specified period.

“Levered Project Cash Flow” represents our forecast of Unlevered Project Cash Flows after non-recourse debt service. Debt service includes both (a) Aggregation Facility debt for the first two years, based on the terms of our current facility, as well as (b) Solar Asset-Backed Loans, which we assume we issue at the end of year two to refinance the Aggregation Facility debt. We base the interest rate on the average of all four of our previous issuances and assume principal repayment over an 18-year term.

Appendix C – Definitions (2/2)

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Thank you