SolarCity Silevo_June_2014 investors

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  • Vertical Integration into High Effi ciency Solar Module Technology and Manufacturing

    Delivering Better Energy

  • SolarCity Corporation | page 2

    Forward-Looking StatementsThis presentation contains forward-looking statements that involve risks and uncertainties, including statements regarding SolarCitys forecast for manufacturing cell efficiencies; expected reductions in manufacturing costs; potential financial and other benefits of the acquisition; and assumptions related 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 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 and backlog 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. 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 identifies 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 Corporation | page 3

  • SolarCity Corporation | page 4

    High Efficiency Solar Module Technology and Manufacturing Technology and integrated manufacturing capability to create industry-leading cost structure that aims to make solar competitive with grid costs

    Triex tunneling junction technology produces high efficiency at a low cost due to a simple, proprietary manufacturing process

    Manufacturing capacity will create the most vertically integrated solar company from modules and mounting hardware to finance, installation, and energy sales

    Transaction value of $200M with up to $150M in earn-outs based on volume and cost targets

  • SolarCity Corporation | page 5

    Triex Tunneling Junction: High Efficiency at Low CostGreater Revenue at Lower Cost per Watt

    Tunneling layer = Higher Efficiency

    Lower system costs

    Less solar panels required for the same system size

    24% target cell efficiency

    Crystalline-amorphous hybrid cell = Better Energy Harvest

    More revenue per watt

    Lower temperature coefficient

    -0.22%/C cell

    -0.27%/C module

    Simple process = Low Manufacturing Costs

    Lower panel costs Simple manufacturing process

    Copper electrode metallization

  • SolarCity Corporation | page 6

    Target Cell Efficiency of 24%C

    ell E

    ffici

    ency

    25%

    20%

    15%

    10%SilevoTarget

    24%

    SilevoCurrent

    21%

    StandardEfficiency

    17-18%

    Thin-Film

    13-14%

    Cell Efficiency When Compared to Equivalent Cost Structures

    26.4% cell efficiency possible in ground-mounted or tilted flat-roof applications

  • SolarCity Corporation | page 7

    Higher Efficiency Reduces Space, Materials, and CostCell Efficiency of 24% Reduces Number of Panels per Equivalent Installation by 25%

    Silevos high efficiency enables 340-W modules with the same form factor as standard 250-W modules today

    24 panels 250 Watts per panel = 6 kW System Size

    18 panels 340 Watts per panel= 6kW System Size

    Higher efficiency requires fewer panels per system size and reduces cost/watt of:

    Installation/Labor

    Balance of System

    Mounting Hardware

    Standard installation Triex installation

  • SolarCity Corporation | page 8

    Highest Energy Harvest on the Market TodayMore Power at Higher Temperatures Result in Greater kWh Production throughout the Day

    ModuleEnergy

    Advantage

    Silevo Triex Tunneling Junction -

    High Efficiency (3.7%)

    Standard Efficiency (7.8%)

    Nor

    mal

    ized

    Pow

    er

    0.95

    0.90

    0.85

    0.80

    0.75

    0.70

    7am 4pm10am 1pm

    Comparative energy harvest

    Silevo Triex

    Existing high efficiency module

    Standard efficiency module

  • SolarCity Corporation | page 9

    Low Cost from Simple Process and Unique TechnologySimple Manufacturing Process Yields High Efficiency at Standard Efficiency Costs Only six core production steps

    Copper metallization eliminates traditional usage of higher-cost silver

    Highly automatable

    Off the shelf equipment from the semiconductor and flat panel display industries

    Use of standard n-type wafers

    Current manufacturing facility operating at a 32MW capacity is shipping UL listed, CEC verified modules

  • SolarCity Corporation | page 10

    Large Integrated Manufacturing Facility Planned within the United States In advanced discussions with partners to contribute towards capital investment

    Expected to create thousands of jobs

    Silicon Valley research facility and pilot plant to be created to enable rapid iteration

    Domestic Manufacturing Expected to Achieve Competitive Costs with Overseas Manufacturing No import tariff

    Lower energy and transport/shipping costs

    Lower labor content per module due to higher efficiency and increased automation

    Module Manufacturing Integration Critical to Cost Goals

    Polysilicon Module Finance Installation O&M

    MountingHardware

    Inverter

    End-UserEnergyDelivery

    External Vertical-Integration from Module to Energy Delivery

  • SolarCity Corporation | page 11

    Silevo Management Brings Extensive Semiconductor Manufacturing Experience CEO and Co-founder Dr. Zheng Xu was previously Corporate VP and GM of equipment business at Applied Materials and holds PhDs in both Material Sciences and Electrical Engineering from Osaka University

    CTO and Co-founder Dr. Jianming Fu was previously PVD General Manager, Applied Materials and holds a PhD from Penn State University

    VP of Product Engineering Dr. Jiunn (Ben) Heng was previously Senior Integration and R&D Engineer at Intel and holds a PhD in Electrical Engineering from University of Illinois at Urbana-Champaign

    EVP of Global Operations and Planning Christopher Beitel, was previously GM, Managing Director Thin Film Solar Business Group at Applied Materials

    President of Silevo China Tobby Wu was formerly VP and GM of Hareon Solars Cell Business Unit and holds a PhD from Materials Science School of Materials Science & Engineering, Shanghai Jiao Tong University

    In aggregate, Silevo senior management bring decades of engineering experience from top tier solar and semiconductor manufacturing businesses.

  • SolarCity Corporation | page 12

    Taking the next step forward in our strategy to vertically integrate best-in-class technology to enable solar at an unsubsidized cost that is less than fossil fuel based generation

  • SolarCity Corporation | page 13

    Questions & Answers

  • SolarCity Corporation | page 14

    Acquisition of Silevo for $200m Upfront with Earn-outs Upfront investment composed of $168m in stock, the assumption of $23m in liabilities, and $9m in cash (though cash portion is subject to change prior to closing).

    Earn-outs of up to $150m in stock based on MW production and cost targets through 2016

    Expected to be accretive with payback of 3-4 years once at scale vs. module market price

    Appendix - Acquisition Terms

  • Questions & Answers

    Thank You

    solarcity.com