Solarcity

1. MyPower
Product and Accounting Overview
February 18, 2015

2. Slide 2
MyPower Product Overview
For more information about the MyPower product, please refer to our website at:
• http://www.solarcity.com/residential/mypower-solar-loan
• http://blog.solarcity.com/mypower-qa
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 4.5-5.0%
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 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

3. Slide 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

4. Slide 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
Installment basis as cash received
from customer payments
Cost recognition System depreciated over 30 years System depreciated over 30 years
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

5. Slide 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
Customer loan and interest
payments Year 1
$2,450
Customer loan and interest
payments Year 2 (assumes
customer receipt of ITC in Year 1,
and rate reduction payment to
SolarCity in Year 2)
$10,950
Total system cost* $15,000
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.
* 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. 2014-09 applicable 1/1/2017.
Balance Sheet Income Statement
Year 1 Debit Credit Debit Credit
Solar System
installed
Other assets
Inventory
$15,000
$15,000
Solar Loan
executed
Customer loan receivable
Deferred Revenue
$30,000
$30,000
Customer
payments received
Cash
Customer loan receivable
$1,000
$1,000
Installment
revenue
recognized
Solar energy system sales
Deferred Revenue $1,000
$1,000
Installment cost of
system recognized
Cost of solar energy system sales
Other Assets $500
$500
Interest income
revenue on receipt
of interest payment
Cash
Interest income revenue on customer loan
$1,450
$1,450
Year 2
Customer
payments received
(assumes payment
of ITC received)
Cash
Customer loan receivable
$10,000
$10,000
Installment
revenue
recognized
Solar energy system sales
Deferred Revenue $10,000
$10,000
Installment cost of
system recognized
Cost of solar energy system sales
Other Assets $5,000
$5,000
Interest income
revenue on receipt
of interest payment
Cash
Interest income revenue on customer loan
$950
$950

6. Slide 6
Thank You
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