MyPower. Product and Accounting Overview February 18, 2015

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Justina Bridges
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1 MyPower Product and Accounting Overview February 18, 2015

2 MyPower Product Overview MyPower is Our New Solar Loan Product Gives customers the opportunity to own their solar system, with zero down payment for the customer and the potential to lower monthly utility bills Customers purchase a solar system and contemporaneously enter into a 30-year loan agreement with a SolarCity subsidiary at an interest rate of % Key Features of the MyPower Solar Loan Low interest rate compared to other solar loans on the market 30 year term better ties to the expected life of the system Secured by the solar system and not the home (no lien on customer s home) Repayment of the loan is effectively based on the amount of energy the system produces; the higher the energy production, the faster the loan is paid off No prepayment penalties Loan can be paid down to reduce the subsequent $/kwh repayment rate Customer can claim 30% of the system's total cost as a federal investment tax credit [ITC] and use it as a kwh rate reduction payment For more information about the MyPower product, please refer to our website at: Slide 2

0% Key Features of the MyPower Solar Loan Low interest rate compared to other solar loans on the market 30 year term better ties to the expected life of the system Secured by the solar system and not

3 MyPower Value Propositions Customers System ownership with no down payment Monthly payments imply lower monthly energy costs Loan repaid as energy produced Adds value to the home; loan payoff and transfer may be included in a home sale or mortgage refinancing Simple loan qualification process, terms and conditions 30 year warranty and performance guarantee at no additional cost Customer retains benefits of the investment tax credit [ITC] and Incentives, subject to balloon payment due on June 1st of the year after installation SolarCity Expands addressable market to include homeowners who prefer to own not lease High visibility into cash flow generation with contracts of up to 30 years with high credit quality customers Financing is not limited to the availability of capital from traditional tax equity sources Financial flexibility to potentially include customer cash flows in future asset backed securitizations Slide 3

retains benefits of the investment tax credit [ITC] and Incentives, subject to balloon payment due on June 1st of the year after installation SolarCity Expands addressable market to include

4 Residential PPA, Lease and MyPower Comparison PPA ('Zero-down') Lease MyPower Key Contractual Terms System Ownership SolarCity or affiliates SolarCity or affiliates Customer Minimum contract term (most jurisdictions) 20 years 20 years 30 years Warranty & Performance Guarantees 20 year warranty; no performance guarantee 20 year warranty and performance guarantee 30 year warranty and performance guarantee Customer payments Variable as power produced with fixed annual rate escalation Fixed with annual rate escalation Variable as power produced with fixed annual rate escalation, subject to balloon payment Rebate and Incentives SolarCity SolarCity Customer Accounting Treatment Revenue recognition On energy production Straight-line over lease term Cost recognition System depreciated over 30 years System depreciated over 30 years Installment basis as cash received from customer payments Installment basis as cash received from customer payments Asset classification Solar energy systems leased and to be leased Solar energy systems leased and to be leased Other assets, current & non-current Customer loan receivable N/A N/A Customer notes receivable, current and non-current Deferred revenue N/A Yes if customer lease payments to date > straight-lined revenue recognized to date Yes represents revenue associated with system sale recognized as loan repaid Slide 4

performance guarantee Customer payments Variable as power produced with fixed annual rate escalation Fixed with annual rate escalation Variable as power produced with fixed annual rate escalation,

5 MyPower Accounting Example Assumptions System Sales Price $30,000 Federal Tax Credit (30%) ($9,000) Incentives ($1,000) Net Cost to customer $20,000 Balance Sheet Income Statement Year 1 Debit Credit Debit Credit Solar System installed Solar Loan executed Other assets Inventory Customer loan receivable Deferred Revenue $15,000 $30,000 $15,000 $30,000 Customer loan and interest payments Year 1 Customer loan and interest payments Year 2 (assumes customer receipt of ITC in Year 1, and rate reduction payment to SolarCity in Year 2) $2,450 $10,950 Customer payments received Installment revenue recognized Installment cost of system recognized Interest income revenue on receipt of interest payment Customer loan receivable $1,000 Solar energy system sales Deferred Revenue $1,000 $1,000 Cost of solar energy system sales Other Assets $500 Interest income revenue on customer loan $1,450 $500 $1,000 $1,450 Total system cost* $15,000 Year 2 MyPower loan interest rate 5% This example ignores impact of sales tax, SRECs, warranty estimates, loan origination expenses and assumes interest on loan assessed at the end of the year. Interest income computation is an estimation only and is used for illustrative purposes in this example. Customer payments received (assumes payment of ITC received) Installment revenue recognized Customer loan receivable $10,000 Solar energy system sales Deferred Revenue $10,000 $10,000 $10,000 * Includes costs of system components and other materials, burdened labor, sales and marketing, and general and administrative costs, excludes certain non-cash items. This accounting model is potentially subject to change on the adoption of the new accounting standard ASU No applicable 1/1/2017. Installment cost of system recognized Interest income revenue on receipt of interest payment Cost of solar energy system sales Other Assets $5,000 Interest income revenue on customer loan $950 $5,000 $950 Slide 5

Customer loan and interest payments Year 2 (assumes customer receipt of ITC in Year 1, and rate reduction payment to SolarCity in Year 2) $2,450 $10,950 Customer payments received Installment revenue

6 Thank You SOLARCITY.COM Slide 6

SOLARCITY CORP FORM 8-K. (Current report filing) Filed 10/29/15 for the Period Ending 10/29/15

SOLARCITY CORP FORM 8-K. (Current report filing) Filed 10/29/15 for the Period Ending 10/29/15 SOLARCITY CORP FORM 8-K (Current report filing) Filed 10/29/15 for the Period Ending 10/29/15 Address 3055 CLEARVIEW WAY SAN MATEO, CA 94402 Telephone 650-638-1028 CIK 0001408356 Symbol SCTY SIC Code 1700