vslr investor deck - s2.q4cdn.com*note: the q3 2014 sales and marketing cost per watt bene#ts from a...

April 14, 20162016 Investor and Analyst Conference Call

Powering people.™

Copyright © 2016 Vivint Solar, Inc. All Rights Reserved 2

This presentation contains forward-looking statements. These statements may relate to, but are not limited to, expectations of future operating results or financial performance, such as estimates of nominal contracted payments remaining, estimated retained value, the capacity of solar energy systems to be installed, estimated revenue and estimated operating expenses, capital expenditures, the market price of electricity, estimated potential solar renewable energy credits, or SRECs, and state incentives, introduction of new products, expansion into new markets, regulatory compliance, plans for growth and future operations, demand for certain products, technological capabilities, strategic relationships as well as assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expect,” “plan,” anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “would,” “continue,” “ongoing” or the negative of these terms or other comparable terminology. You should not put undue reliance on any forward-looking statements. 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 based on information available at the time those statements are made and/or management’s good faith beliefs and assumptions as of that time with respect to future events, and 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: the availability of additional financing on acceptable terms; changes in the retail price of traditional utility generated electricity; changes in electric utility policies and regulations; the availability of rebates, tax credits and other incentives, including SRECs and state incentives, that affect the pricing of our offering; regulations and policies related to net metering; changes in regulations, tariffs and other trade barriers and tax policy affecting us and our industry; our ability to manage our recent and future growth effective, including attracting, training and retaining sales personnel and solar energy system installers; the availability and price of solar panels and other system components; the assumptions employed in calculating our operating metrics may be inaccurate; Vivint Solar’s limited operating history, particularly as a new public company; and such other risks identified in the registration statements and reports that Vivint Solar files with the U.S. Securities and Exchange Commission, or SEC, from time to time. Although we believe that expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in those statements will be achieved or will occur, and actual results could differ materially from those anticipated or implied in the forward-looking statements. Except as required by law, the issuer does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

You should read the documents Vivint Solar has filed with the SEC for more complete information about the company. These documents are available on both the EDGAR section of the SEC’s website at www.sec.gov and the Investor Relations section of the company’s website at www.vivintsolar.com.

We have rights to the trademark “Vivint Solar”. Solely for convenience, trademarks and trade names referred to in this presentation, including logos, artwork and other visual displays, may appear without the ® or TM symbols, but such references are not intended to indicate in any way that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names.

STATEMENTSForward-Looking


HIGHLIGHTSQ1 2016 Key Operating

We booked 66 MWs in the first quarter, 33% growth from the year ago period, and installed 55 MWs, 20% growth from the year ago period.

2

Our estimated nominal contracted payments remaining at the end of the first quarter was $2.1 billion, growing 71% from the year ago period, and our estimated retained value was $1.0 billion at the end of the first quarter, growing 81% from the year ago period.

3

Our cost per watt was $3.35 in the first quarter, increasing from $3.21 in the first quarter of 2015.

4

Entered into a term-debt facility with $200 million in capacity.5

Terminated the SunEdison merger agreement in March.1


PROPOSITIONCustomer Value

Immediate savings on electricity rate, averaging 10-30% savings in most markets

Worry-free installation and maintenanceVivint Solar handles monitoring and warranty of system

Customers know their rates, primarily a 2.9% fixed escalator

Little to no upfront cost

Guaranteed pricing for 20 years

Customer Savings Increase Over Time

Today End of Term

Vivint Solar PPAUtility Rate


BUSINESS MODELFully Integrated

Neighborhood-focused direct-to-home salesforce

Proprietary design software increases overall efficiency and throughput

Control every aspect of

process to ensure quality

Real-time monitoring enables

rapid response times

Lower customer acquisition costs and accelerate

growth

Consultation InstallationEngineering Service ReferralFinancing

Little to no upfront cost to the customer.

Raise financing against long-term recurring

cash flows

Seamless integration from front-to-back office increases speed and agility for the business. Enhanced business focus acts as a catalyst for cost optimization, growth, and

high performance.


STRATEGYDIRECT-TO-HOME

Enhanced sales efficiency

Reduced customer acquisition costs

Concentrated deployments improve operational efficiency, lower costs

Maximized referrals, increased sales opportunities

Copyright © 2016 Vivint Solar, Inc. All Rights Reserved


TECHNOLOGYDifferentiated

Mobile

Digital Sales Aid on iPad™

Efficient

Leverage technology in order to drive efficiency, automation and accuracy. Increase productivity in operations and lower costs.

Touch-less customer acquisition


DRIVE VALUEAccelerate Growth

BUILD AND LEVERAGE STRATEGIC PARTNERSHIPS

EXPAND INTO NEW LOCATIONS

CAPITALIZE ON OPPORTUNITIES TO LOWER COSTS

NEW PRODUCTS AND ROUTES TO MARKET


18 MW

35 MW

53 MW

70 MW

Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2 '16*

37

49

HISTORICAL GROWTHMW Installed

50

66

61 59

Q1 2016 Up 20% year-over-year

*Note: Represents Q2 2016 guidance.

60

46

20

55


PAYMENTS REMAININGEstimated Nominal Contracted

Note: Estimated nominal contracted payments remaining equals the sum of the remaining cash payments that our customers are expected to pay over the term of the agreements with us for systems installed as of the measurement date. Estimated nominal contracted payments remaining does not reflect potential customer defaults or cancellations as such amounts have been de minimis to date. For a power purchase agreement, we multiply the contract price per kilowatt-hour by the estimated annual energy output of the associated solar energy system to determine the estimated nominal contracted payments. For a customer lease, we include the monthly fees and upfront fee, if any, as set forth in the lease. The estimated nominal contracted payments remaining for a particular power purchase agreement or lease decline as the payments are made. Estimated nominal contracted payments include value attributable to long-term customer contracts that are owned by our investment funds. Currently, fund investors have contractual rights to a portion of these nominal contracted payments.

$625mm

$1,250mm

$1,875mm

$2,500mm

Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16

$1,657

$1,443

$1,205$1,031

$842

$648$490

Up 71% in the last year

$1,872

$2,065


RETAINED VALUEEstimated

Note: Estimated retained value represents the net cash flows, discounted at 6%, that Vivint Solar expects to receive from customers pursuant to long-term customer contracts net of estimated cash distributions to fund investors and estimated operating expenses for systems installed as of the measurement date. For purposes of the calculation, Vivint Solar aggregates the estimated retained value from the solar energy systems during the typical 20-year term of Vivint Solar’s contracts, which Vivint Solar refers to as estimated retained value under energy contracts, and the estimated retained value associated with an assumed 10-year renewal term following the expiration of the initial contract term, which Vivint Solar refers to as estimated retained value of renewal. To calculate estimated retained value of renewal, Vivint Solar assumes all contracts are renewed at 90% of the contractual price in effect at the expiration of the initial term.

$300mm

$600mm

$900mm

$1,200mm

Q1 '14 Q2 '14 Q3 '14 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16

$236$310

$399$481

$560

$680

$793

Up 81% in the last year

$906

$1,012


NET RETAINED VALUEQ1 2016 Estimated


Gross retained value $1,012

Less: debt - non-recourse ($364)

Plus: cash & cash equivalents $87

Net retained value $735


$1.25

$2.50

$3.75

$5.00

Q1 '14 Q2 '14 Q3 '14 Q4' 14 Q1 '15 Q2 '15 Q3 '15 Q4' 15 Q1 '16

$0.24$0.26$0.35

$0.35$0.26$0.38

$0.37

$0.60

$0.54$0.59$0.53

$0.54$0.45$0.41

$0.57

$0.65

$3.35

$2.34$2.27$2.12$2.32$2.25$2.34$2.61

$3.00

$4.25

$3.55

$3.12

HISTORICAL TRENDCost Per Watt

*Note: The Q3 2014 sales and marketing cost per watt benefits from a change related to Vivint Solar’s sales compensation policies. On a non-normalized basis sales and marketing cost per watt would have been $0.28.

$0.60

$0.65

Installation Sales & Marketing G&A

$2.96$3.21

Targeting Cost per Watt at between $2.85 and $2.95 for 2016

$3.00 $3.12 $3.12$3.35


GUIDANCE2016 Key Operating Metrics

260 MW Installed in 2016

$2.85 to $2.95 for cost-per-watt for full-year 2016

60 MW Installed in Q2 2016

2

3

1

Appendix


RETAINED VALUESensitivities


Estimated Retained Value Estimated Retained Value per Watt

$ amounts in millions $ amount per Watt

4% 6% 8% 4% 6% 8%

Contracted $947 $783 $657 Contracted $1.84 $1.52 $1.28

Renewal $364 $228 $145 Renewal $0.71 $0.44 $0.28

Total $1,311 $1,012 $801 Total $2.55 $1.97 $1.56


GLOSSARYInstallations represents the number of solar energy systems installed on customers’ premises.

MWs or megawatts represents the DC nameplate megawatt production capacity.

MW Installed represents the aggregate megawatt nameplate capacity of solar energy systems for which panels, inverters, and mounting and racking hardware have been installed on customer premises in the period.

MW Booked represents the aggregate megawatt nameplate capacity of solar energy systems that were permitted during the period net of cancellations in the period.

Nominal Contracted Payments Remaining

equals the sum of the remaining cash payments that Vivint Solar’s customers are expected to pay over the term of their agreements for systems installed as of the measurement date. For a power purchase agreement, Vivint Solar multiplies the contract price per kilowatt-hour by the estimated annual energy output of the associated solar energy system to determine the estimated nominal contracted payments. For a customer lease, Vivint Solar includes the monthly fees and upfront fee, if any, as set forth in the lease.

Retained Value

represents the net cash flows, discounted at 6%, that Vivint Solar expects to receive from customers pursuant to long-term customer contracts net of estimated cash distributions to fund investors and estimated operating expenses for systems installed as of the measurement date. For purposes of the calculation, Vivint Solar aggregates the estimated retained value from the solar energy systems during the typical 20-year term of Vivint Solar’s contracts, which Vivint Solar refers to as estimated retained value under energy contracts, and the estimated retained value associated with an assumed 10-year renewal term following the expiration of the initial contract term, which Vivint Solar refers to as estimated retained value of renewal. To calculate estimated retained value of renewal, Vivint Solar assumes all contracts are renewed at 90% of the contractual price in effect at the expiration of the initial term.

Retained Value per Wattis calculated by dividing the estimated retained value as of the measurement date by the aggregate nameplate capacity of solar energy systems under long-term customer contracts that have been installed as of such date, and is subject to the same assumptions and uncertainties as estimated retained value.

Undeployed Tax Equity Financing Capacity

represents a forecast of the amount of megawatts that can be deployed based on committed available tax equity financing for Energy Contracts.

NYSE:VSLR

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