Given SolarCity (NASDAQ:SCTY) stock's premium valuation and the company's need for greater economies of scale to drive costs of panels lower, growth is absolutely critical to the company's success. SolarCity hasn't failed to impress when it comes to growing its top line. Indeed, the growth in SolarCity's underlying business in Q2 was particularly impressive. Here are three areas where SolarCity's growth is impossible to ignore.

Scty Solarcity

Image source: SolarCity.

Revenue
When SolarCity reported second-quarter results, the company's revenue exceeded analyst expectations and continued to grow at a rapid rate.

Compared with a consensus estimate for revenue of $90.16 million in Q2, the solar company reported revenue of $102.8 million, handily beating expectations. 

Further, these results were also well ahead of SolarCity's own guidance for Q2. Management said when it reported first-quarter results, it expected to report revenue in the range of $86 million to $92 million.

The company's rapid revenue growth is primarily driven by a continually increasing number of customers. In Q2, SolarCity added 44,900 new customers, bringing total customers to 262,495, up 86% from the year-ago quarter.

Contracted payments
Looking only at historical revenue, however, when analyzing SolarCity, yields an incomplete picture of its business. Since most customers will provide SolarCity with an annuity of cash flow for years to come, investors shouldn't forget to realize the value of the company's contracted payments remaining. SolarCity's contracted payments remaining are an "an approximation of the revenue our lease/PPA/loan customers are expected to generate over the remaining life of their Energy Contracts," management explained in its second-quarter letter to shareholders.

During Q2, nominal contracted payments remaining were $7.7 billion, up a whopping 132% from the year-ago quarter. And these contracted payments remaining grew $1.6 billion in Q2 alone.

SolarCity notes that its increase in estimated nominal contracted payments remaining is actually a better measure of new sales activity than reported revenue.

PowerCo available cash
In Q2, SolarCity introduced a new metric: PowerCo available cash. A look at the metric provides an optimistic picture of cash being generated from the company's long-term energy contracts.

To fully understand this new metric, investors first have to understand what PowerCo is. To break apart the integrated cash inflows and outflows of SolarCity's business focused on development, sales, and installation from its growing portfolio of clean energy-producing assets, SolarCity is now reporting these segments' financial data separately, referring to the former as DevCo and the ladder as PowerCo.

"In sum, DevCo represents strong long-term growth, and PowerCo represents high-quality, long-term yield," SolarCity management explained in the Q2 letter.

PowerCo available cash, therefore, is the net levered cash flow to equity of PowerCo. This new key metric, management says, "is a better representation of our true business performance."

In Q2, available cash generated from PowerCo in the trailing 12 months was $114 million. Illustrating the extent of SolarCity's continued growth, $41 million of this available cash was generated in Q2 alone.

Going forward, SolarCity believes TTM available cash from PowerCo will "continue to rise as DevCo consistently contributes more contracted megawatts to our PowerCo platform."

Growth like this continues to support the case for holding SolarCity stock, even with its pricey valuation. As long as management continues to execute expertly in growing its business, there's no reason to sell this market leader.

Daniel Sparks owns shares of SolarCity. The Motley Fool recommends SolarCity. The Motley Fool owns shares of SolarCity. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.