Q4 2013 Reporting Update

March 3, 2014

Forward-Looking Statements
This presentation contains forward-looking statements that involve risks and uncertainties, including statements regarding the date of SolarCitys anticipated filing of Q4 and full year 2013 and restated 2012 financial statements, the anticipated impact on our 2012 and 2013 financial results; full-year 2014 megawatt deployment; estimated nominal contracted payments remaining; forecasted retained value under energy contracts; forecasted cash flow in 2014; 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 including due to further review of our financial results and financial statements and internal controls, completion of the preparation of financial statements and their audit by our independent auditors, 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, the effects of future tariffs and other trade barriers, changes in federal tax treatment, 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 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 SolarCitys rapid growth, risks that consumers who have executed energy contracts included in reported nominal contracted payments remaining may seek to cancel those contracts, assumptions as to retained value under energy contracts and contract renewal rates and terms, including applicable net present values, performance-based incentives, and other rebates, credits and expenses, SolarCitys 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. In addition, as of the date hereof, we have bookings and financing for only a small percentage of the orders needed to achieve our 2014 megawatt projections and therefore expect the megawatts deployed in 2014 to be sourced almost exclusively from new deployments of solar systems not currently under contract. In order to meet our projections, we will need to substantially expand our workforce, increase our installation efficiency and exceed our existing bookings rate relative to what we have achieved to date. You should also 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 identifies certain 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.

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Q4 2013 Reporting Update

Acquisition Accounting
Recent M&A activity now incorporated

Overhead Allocation
Senior management review of preliminary year-end financial statements and internal controls identified overhead allocation error originating in Q1 2012 Substantial increase in Q4 2013 deployments brought the issue to light

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Business and Financial Impact

Net result is a reallocation from the balance sheet to the income statement and a corresponding increase in reported Loss from Operations
Total costs have not changed

Net Cash Flow not impacted No impact to core business operations

Estimated Nominal Contracted Payments Remaining of $2 billion unaffected Retained Value of $1 billion unaffected

Our target is to publish final 2013 and restated 2012 results by March 18, 2014

See Slide 11 for Definitions

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Overhead Allocation Process

Overhead Determination
Non-direct expenses associated with solar installations For example: warehouse rent, safety services, fleet expenses, etc.

Allocation Methodology
Allocable Overhead Direct Expenses = Burden Ratio

Burden ratio applied to total direct expenses to determine overhead allocated to Operating Lease Assets Cost of Solar Energy System Sales is determined by subtracting total expenses capitalized in operating lease assets from total expenses

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Overhead Allocation Overview

Allocable Overhead

Operating Lease Assets

Solar Energy System Sales

Capitalized

Expensed

Balance Sheet

Income Statement

Depreciation in Operating Lease Costs (30 years)

Recognition in Solar Energy System Sales Costs (In Period Incurred)

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Overhead Allocation Issue

Issue Identification
Solar energy system sale gross margins appeared inconsistent In addition, newly-implemented audit of internal controls over financial reporting highlighted potential issue Identified overhead allocation error originating in Q1 2012

Miscalculated Burden Ratio

Prior period overhead was included in numerator but prior period direct costs were excluded from denominator Incorrect ratio resulted in higher amounts capitalized in operating lease assets and lower amounts expensed in solar energy system sales

Net Impact
Over-allocation to operating lease assets and resulting under-allocation to solar energy system sales Total costs have not changed

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Key Financial Statement Impacts

Balance Sheet
Solar Energy Systems Leased and To Be Leased, Net decreased
Approximately $16 million to $20 million for 2013 Approximately $20 million to $23 million for 2012 Currently evaluating the materiality of the impact on 2011

Income Statement
Operating Lease Costs decreased over time (higher gross margin) Solar Energy System Sale Costs increased (lower gross margin) Reported Loss from Operations increased

Cash Flow Statement

Movement likely between categories Net Cash Flow not impacted

See Slide 11 for Definitions

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No Impact to Reported Operating Metrics

Nominal Contracted Payments Remaining Unchanged
$1,989 million at 2013 YE

Retained Value Unchanged

Forecast of $1,052 million at 2013 YE

Net Cash Flow

Positive in 4Q13 Cash balance of $577 million at 2013 YE

2014 Guidance Unchanged

MW Deployed of 475 MW 525 MW Net Cash Flow Positive

See Slide 11 for Definitions

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Questions & Answers

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Appendix Definitions
Backlog represents the aggregate megawatt capacity of solar energy systems not yet deployed as of the date specified pursuant to Energy Contracts and contracts for solar energy system direct sales executed as of such date. MW or megawatts represents the DC nameplate megawatt production capacity. 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. Net Cash Flow is Operating Cash Flows Less Investing Cash Flows Plus Financing Cash Flows (excluding equity issuance) Nominal Contracted Payments Remaining equals the estimated sum of cash payments obligated to be paid to us under our Energy Contracts over the remaining term of such contracts. This metric includes Energy Contracts for solar energy systems already deployed and in Backlog. As an example, if a customer is 2 years into her 20 year contract, then 18 years of contract payments remain. As an additional example, if a customer chose to pre-pay her Energy Contract, then it is included in estimated Nominal Contracted Payments Remaining only while it is in Backlog as the pre-payment has not been received. Payments for direct sales are not included. Retained Value forecast represents the sum of both Retained Value under Energy Contract and Retained Value Renewal. Retained Value under Energy Contract represents the forecasted net present value of Nominal Contracted Payments Remaining and estimated performance-based incentives allocated to us, net of amounts we are obligated to distribute to our fund investors, upfront rebates, depreciation, renewable energy certificates, solar renewable energy certificates and estimated operations and maintenance, insurance, administrative and inverter replacement costs. This metric includes Energy Contracts for solar energy systems deployed and in Backlog. Retained Value Renewal represents the forecasted net present value of the payments SolarCity would receive upon Energy Contract renewal through a total term of 30 years, assuming all Energy Contracts are renewed at a rate equal to 90% of the contractual rate in effect at expiration of the initial term. This metric is net of estimated operations and maintenance, insurance, administrative and inverter replacement costs. This metric includes Energy Contracts for solar energy systems deployed and in Backlog.

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Thank You

SOLARCITY.COM

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