SCTY

SolarCity Corporation (SCTY)

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SolarCity Corp. (SCTY)

Q4 2012 Earnings Call

March 6, 2013 5:00 p.m. ET

Executives

Lyndon Rive - CEO

Robert Kelly - CFO

Peter Rive - COO

Jonathan Bass - IR

Analysts

Brian Lee - Goldman Sachs

Satya Kumar – Credit Suisse

Joe Osha - Bank of America Merrill Lynch

Y. Edwin Mok - Needham

Phillip Shen - Roth Capital

Pavel Molchanov - Raymond James

Aaron Chew – Maxim Group

Presentation

Operator

Good afternoon. And welcome to SolarCity’s fiscal fourth quarter and full year 2012 earnings conference call. Management will be utilizing a slide presentation for this call which is available now for download or can be viewed on the webcast on SolarCity’s investor relations page at http://investors.solarcity.com. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. (Operator Instructions).

At this time, I would like to turn the conference call over to Mr. Jonathan Bass, Senior Director of Communications. Please go ahead sir.

Jonathan Bass

Thanks everyone for joining the call today. As a reminder, this discussion will contain forward looking statements that involve risks and uncertainties, including forecasts regarding SolarCity’s 2013 financial and operational results. Words such as believe, may, estimate, continue, anticipate, intend, expect, predict, potential and similar expressions as they relate to SolarCity, its business and its management are intended to identify forward looking statements. Forward looking statements should not be considered as a guarantee of future performance or results, and will not necessarily be accurate indications of the time that apply 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 and/or suggested by the forward looking statements, including risks identified in SolarCity’s earnings press release issued today and in the slides accompanying this presentation, as well as additional risks and uncertainties identified in the section entitled Risk Factors in our registration statement on Form S-1 which has been filed with the Securities and Exchange Commission. We do not undertake any obligation to publicly update or revise any forward looking statement whether as a result of new information, future development or otherwise.

In addition, during the course of this call we will use a number of especially defined terms relating to our business metrics and financial results, the first definitions of these terms included in the slides accompanying this presentation which are available on our investor relations website at investors.solarcity.com. We’re going to try to keep today’s presentation including questions and answers to 45 minutes.

And with that, I’d like to introduce SolarCity CEO Lyndon Rive.

Lyndon Rive

Thank you everybody for joining our first earnings call. We’re very excited to share our Q4 and 2012 results. We could not have offered better yet. When we review the business metrics you would see that key business metrics had at least 100% growth, some as high as 300%. This is not a small numbers, this is a big number.

We are clearly on our way to building the most compelling energy company in the 21st century. 2013 is off to a great start with our partnership with Honda. The demand for cheaper, cleaner energy is high and the market potential is massive, solar is still less than 1% of our energy needs.

Turn to slide four, in order to achieve our vision, there may be massive investment into deploying solar energy system. With each new customers, we create a predictable recurring SOC. Our financial strategy is to maximize the retained value for our shareholders by covering the investment activities with tax generated from financing and operating activities. In short, as we invest into solar system with operating and financing assets (inaudible) we’re going to have three main activities, operating activity, investing activity and financing activities.

Peter Rive, our COO will cover the operating activities, includes the contractual payments, acquiring customers, operating and maintaining the solar systems, the technology development, additional solar system we offer direct sales, we are starting to see significant uptick in our upsells. This includes energy efficiency, storage, electric vehicle charging stations. He will also cover our investment activities. The investments that we are making to become the next generation clean energy company.

Bob Kelly, our CFO will describe our financing activities. He will describe to you what we are doing to lower our cost of capital and what we are doing to expand our capital sources. With that I would like to move into page five and hand over to Peter Rive, our chief operating officer.

Peter Rive

Thanks. So Q4 deployments came in at 48 megawatts which is the largest quarter on record, so that was a very, very, exciting quarter for us. The 48 megawatts was in part as a result of a handful of commercial projects that were completed in Q4 result. The 48 megawatts as a whole reflects a 129% growth over Q4 2011 and the year end total of 157 megawatts reflect a great growth of 118% over the full year 2011.

It’s important to note though that commercial projects can’t sway some of our megawatts deployed numbers on a quarter on quarter basis, as that volume is little more spiky than our residential business. But the record Q4 deployments brings our accumulative megawatts deployed to 287 megawatts. Now what was also a massive amounts on for us in 2012 is that all of our systems collectively had their first 1 gigawatt hour day of production. So in other words, all of our systems in one day produced 1 gigawatt hour which was a big amount for us.

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