Storage Product and Opportunity Overview Peter Rive Co-founder & CTO
Forward-Looking Statements This presentation contains forward-looking statements that involve risks and uncertainties, including statements regarding SolarCity s customer and market growth opportunities, including the markets for energy storage and related services; our estimated nominal contracted payments remaining; 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. Additional key risks and uncertainties include the availability of a sufficient, timely, and cost-effective supply of storage system components, the success of our product development efforts and customer preferences, risks that consumers who have executed energy contracts included in reported nominal contracted payments remaining and backlog may seek to cancel those contracts, 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, which has 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. SolarCity Confidential Slide 2
SolarCity Technology Overview Solar modules High efficiency and low cost 24% target cell efficiency Mounting hardware and Balance of system Faster installation, lower cycle time Superior aesthetics Software System design automation Energy production forecasting Logistics and resource management Utility rate tariff database Energy usage evaluations Customer account management Customer applications Grid control systems Real-time energy monitoring Voltage control Energy storage integration SolarCity Confidential Slide 3
Our approach to solar is being applied to storage Clean, More Affordable Energy We lower customers energy bills by providing solar energy with no upfront cost $200 $160 Old Bill Example New Bill Example Our solar products have resulted in $7.7B contracted customer payments with a 120% annual growth rate since January, 2012 SolarCity Confidential Slide 4
With storage and solar the sum is greater than its parts Solar production and battery discharge reduce peak loads together Peak load periods occur in the summer from noon to 7pm Solar shaves the majority of the peak firmed up by the battery Solar storage systems are eligible for the investment tax credit Solar storage systems cost less to install than standalone battery systems as there are common components (e.g. a common hybrid inverter) Single sales cycle for solar and storage with a greater combined value proposition 10x growth in battery sales and a 50% cost reduction since last year and we expect growth and cost reduction to continue SolarCity Confidential Slide 5
Current Product Offerings Address all Major Market Segments Market Segment Commercial and Industrial Product Offering DemandLogic reduces peak demand charges Residential Cleaner more affordable backup power Remote communities and the developing world Microgrids protect against outages and provide more affordable power Utilities Capacity and power quality services SolarCity Confidential Slide 6
For commercial customers demand charges are a significant portion of their electric bill SolarCity Confidential Slide 7
Customer pays a lower rate for their demand charges without any upfront investment Customer demand charges can be as high as $20/kW/month Immediate savings with no capital expense Learning algorithms determine the optimal time to discharge the batteries Also provides backup power Customers include multiple large businesses like Walmart, BJs as well as utilities and school districts SolarCity Confidential Slide 8
Cheaper, cleaner residential backup 7kW of power and about 35kWh* off-grid energy (2x average household power needs) Can provide off-grid power indefinitely without refueling needs Fully installed for $4k (significantly less than a traditional backup generator) Ready for utility operation with ancillary revenue potential * 35kWh available on the first day assuming a 6kW solar system on a partly cloudy day SolarCity Confidential Slide 9
Utility Opportunities Massive costs are currently incurred in providing capacity and power quality in the distribution system Representative example taken from a utility filing Replace 9.2MVA transformer with 30MVA transformer to address 0.2MW deficiency at a cost of $4.35 Million Solar and battery system can provide this capacity at a fraction of the cost Current opportunities are based on utility RFPs Market reform in New York, California, and Hawaii is attempting to modernize the regulatory model so that utilities can more easily procure services from distributed, behind the meter, batteries, smart solar inverters, and other distributed resources SolarCity Confidential Slide 10
Microgrids can power remote communities and add resiliency to existing grid connected locations SolarCity Microgrid Architecture Leveraging Distributed Energy Resources We offer the first available microgrid with no upfront costs and pay-as-you-go financing, as well as a purchase option. SolarCity Confidential Slide 11
PowerHub, solar energy available 24 hours a day that can cost less than diesel PowerHub at a glance 30kW & 60kW maximum power output 66 or 99 kwh daily energy production 32kWh or 64kWh battery storage capacity High level of reliability provided through built-in redundancy Less than 2-hour assembly time Easily scales for larger installations SolarCity Confidential Slide 12
Questions & Answers SolarCity Confidential Slide 13