Solar Alliance Energy : MD&A Q1, 2023

INTERIM MANAGEMENT'S DISCUSSION AND ANALYSIS

QUARTERLY HIGHLIGHTS

MARCH 31, 2023

(CANADIAN DOLLARS)

SOLAR ALLIANCE ENERGY INC.

ITERIM MANAGEMENT'S DISCUSSION AND ANALYSIS - QUARTERLY HIGHLIGHTS FOR THE THREE MONTHS ENDED MARCH 31, 2023

DATED MAY 29, 2023

(All figures in Canadian Dollars)

The following interim Management Discussion & Analysis ("Interim MD&A") of Solar Alliance Energy Inc. (the "Company" or "Solar Alliance") for the three months ended March 31, 2023 has been prepared to provide material updates to the business operations, liquidity and capital resources of the Company since its last annual management discussion & analysis, being the Management Discussion & Analysis ("Annual MD&A") for the fiscal year ended December 31, 2022. This Interim MD&A does not provide a general update to the Annual MD&A, or reflect any non-material events since the date of the Annual MD&A.

This Interim MD&A has been prepared in compliance with section 2.2.1 of Form 51-102F1, in accordance with National Instrument 51-102 - Continuous Disclosure Obligations. This discussion should be read in conjunction with the Annual MD&A, audited annual consolidated financial statements of the Company for the years ended December 31, 2020, and December 31, 2019, together with the notes thereto, and unaudited interim condensed consolidated financial statements of the Company for the three months ended March 31, 2023, together with the notes thereto. Results are reported in Canadian dollars, unless otherwise noted. The Company's unaudited interim condensed consolidated financial statements and the financial information contained in this Interim MD&A are prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations of the IFRS Interpretations Committee. The unaudited interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting. Accordingly, information contained herein is presented as of May 29, 2023, unless otherwise indicated.

Description of the Business

Solar Alliance is a reporting issuer in British Columbia and Alberta and its common shares are listed for trading on the TSX Venture Exchange ("TSX-V") under the symbol "SOLR" and on the OTC in the United States under the symbol "SAENF".

Solar Alliance is executing on a unique, hybrid strategy that combines solar system sales to businesses and utilities with a growing portfolio of operating assets that generate long-term recurring revenue for the Company. The technical and operational synergies from the combined business model positions the Company for sustained growth across the solar project value chain from design, engineering, installation, ownership and operations/maintenance.

Solar Alliance operates in Tennessee, Kentucky, Illinois and North and South Carolina and has an expanding pipeline of solar projects in several Southeast U.S. states.

Solar Alliance's passion is improving life through ingenuity, simplicity and freedom of choice. Solar Alliance reduces or eliminates customers' vulnerability to rising energy costs, offers an environmentally friendly source of electricity generation, and provides affordable, turnkey clean energy solutions.

Leadership

On February 23, 2023, the Company announced the board of directors has approved the appointment of Christina Wu as Chief Financial Officer ("CFO") of the Company, effective March 10, 2023. The current CFO, Rob Roberti, will step down from his role and move to a newly constituted Advisory Board position role, which has been created to support strategic growth initiatives moving forward. Mr. Roberti's move is effective March 10, 2023.

Operational Highlights

The following highlights are from the Company's operations during the three months ended March 31, 2023 and the period up to the date of this Interim MD&A.

The Company continues to target larger customers for third-party solar system sales and installations, specifically for utility and commercial customers. Solar Alliance's strategy is to design, engineer and install commercial solar systems ranging in size up to several megawatts. This shift in focus to larger projects during 2022 has resulted in strong revenue growth that the Company expects to continue through 2023.

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SOLAR ALLIANCE ENERGY INC.

ITERIM MANAGEMENT'S DISCUSSION AND ANALYSIS - QUARTERLY HIGHLIGHTS FOR THE THREE MONTHS ENDED MARCH 31, 2023

DATED MAY 29, 2023

(All figures in Canadian Dollars)

First two Company-owned solar projects energized. On January 3, 2023, the Company announced it has completed the construction of the Company's first two solar projects in New York, and both are now in operation. VC1, a 298-kilowattproject located in the Village of Cazenovia, and US1, a 389-kWproject located in the Village of Union Springs, have both received permission to operate and are now generating clean, renewable electricity under long-termpower purchase agreements with the local communities.

$1.8 million contract signed for project in Tennessee. On February 13, 2023, the Company announced it has signed a contract for the design, engineering, and construction of an 872-kilowatt('kW") commercial solar project for a manufacturing company in Tennessee. The project, with a $1.8 million capital cost, is scheduled to begin construction in Q2 2023 with completion targeted by October 2023.

Oak Hill Financial engaged for investor relations. On March 6, 2023, the Company announced it entered into an advisory services agreement (the "Consulting Agreement") with Oak Hill Financial Inc. ("Oak Hill") to provide business and capital markets advisory services including investor relations. Oak Hill will provide investor relations services to Solar Alliance with a focus on providing turn-key solutions for investor relations, marketing in the investment community, targeting advisor channels of distribution and identifying existing and new investors.

Trends

Solar Alliance is executing on a unique, hybrid strategy that combines solar system sales to businesses and utilities with a growing portfolio of operating assets that generate long-term recurring revenue for the Company. The technical and operational synergies from the combined business model positions the Company for sustained growth across the solar project value chain from design, engineering, installation, ownership and operations/maintenance.

Solar Alliance is focused on a the rapidly growing commercial, small utility and community solar sectors in the United States, where the recently adopted Inflation Reduction Act (IRA) will help the U.S. solar market grow 40% over baseline projections through 2027. That is equal to 62 gigawatts (GW) of additional solar capacity, according to new forecasts in the U.S. Solar Market Insight Q3 2022 report by the Solar Energy Industries Association (SEIA) and Wood Mackenzie. Cumulative solar installations across all market segments will nearly triple in size, growing from 129 GW today to 336 GW by 2027. Solar accounted for 39% of all new electricity-generating capacity added to the US grid in the first half of 2022.

On August 16th, 2022, President Biden signed the IRA into law. The legislation provides long-term tax credits and incentives for solar energy projects and technologies. For the U.S. solar industry, the legislation gives the industry the most long-term certainty for federal tax credits it has ever had. The industry will have ten years of certainty between the extensions of the current investment tax credit (ITC) and production tax credit (PTC). Also, for the first time, the U.S. solar industry will have access to production tax credits and an investment tax credit for domestic manufacturing across the solar value chain.

Solar Alliance is now actively assessing opportunities in Canada, following the release of the Federal government's 2022 Fall Economic Statement, which proposes a refundable tax credit equal to 30 per cent of the capital cost of investments in solar and storage projects. The tax credit, which is similar in nature to the U.S. ITC, was confirmed as part of the 2023 Budget. The Company believes the tax credit will generate substantial opportunities in the Canadian solar industry.

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SOLAR ALLIANCE ENERGY INC.

ITERIM MANAGEMENT'S DISCUSSION AND ANALYSIS - QUARTERLY HIGHLIGHTS FOR THE THREE MONTHS ENDED MARCH 31, 2023

DATED MAY 29, 2023

(All figures in Canadian Dollars)

Results of Operations

Revenue for the three months ended March 31, 2023 was $974,577 compared to $663,269 in the comparative period.

Operating and selling expenditures, excluding non-cash depreciation and share-based payments, were $705,441 in the three months ended March 31, 2023 compared to $702,389 in the comparative period, an increase of $3,052. The increase is mainly attributable to an increase in professional fees, consulting fees, which related to more projects being completed during the period, and offset by the decrease in salaries and benefits.

The year-over-year increase in revenue is due primarily to the Company's transition to larger revenue projects, which have a longer sales cycle. This focus on larger projects resulted in fewer small projects being completed but also resulted in the signing of several larger projects.

Liquidity and Capital Resources

Solar Alliance began the 2023 fiscal period with $650,061 cash. During the three months ended March 31, 2023, the Company used $79,304 in operating activities, net of working capital changes, used $464 in investing activities and received $176,000 from financing activities, to end March 31, 2023 with $394,293 cash.

As at March 31, 2023, the Company had a working capital deficit of $3,930,601 compared to a working capital deficient of $3,103,859 at March 31, 2022. The cash inflows from Solar Alliance operations are currently not sufficient to sustain the Company's operations and to pay the Company's obligations as they become due. Management intends to continue to raise capital through a combination of revenue growth, reduced expenses, and injections of capital through debt and equity issuances. There can be no assurance that management's plans will be successful or that the Company will be able to obtain the financial resources necessary. The Company's ability to continue as a going concern is dependent on the Company's ability to raise debt or equity funding in the near term to fulfill its obligations and ultimately in self-generating income and cash flows from its operations. The conditions described above give rise to a material uncertainty that may cast significant doubt as to the Company's ability to continue as a going concern.

Related Party Transactions

The following transactions and balances with related parties occurred during the three months ended March 31,

2023:

1. Included in trade and other payables as at March 31, 2023 is $265,703 (December 31, 2022 - $265,703) due to current and former officers and directors and a significant shareholder of the Company for consulting fees, salaries and benefits and expense reimbursements.
2. Included in short-term loans as at March 31, 2023 is $189,000 (December 31, 2022 - $250,000) due to a current director of the Company.
3. Included in interest expense as at March 31, 2023 is $12,945 (December 31, 2022 - $25,989) due to a current director of the Company.
4. Included in professional fees as at March 31, 2023 is $5,696 (December 31, 2022 - $nil) to Marrelli Support Services Inc., a company which the CFO is related to. As of March 31, 2023, the company owed $2,380 which is included in trade and other payables.

3

SOLAR ALLIANCE ENERGY INC.

ITERIM MANAGEMENT'S DISCUSSION AND ANALYSIS - QUARTERLY HIGHLIGHTS FOR THE THREE MONTHS ENDED MARCH 31, 2023

DATED MAY 29, 2023

(All figures in Canadian Dollars)

Key management includes members of the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, and the Corporate Secretary. The aggregate compensation paid or accrued to key management personnel during the three months ended March 31, 2023 and 2022 were as follows:

		Three Months Ended
		March 31,
		2023		2022
Salaries and benefits		58,972		129,333
Share-based payments		60,428		114,992
Total	$	119,400	$	244,325

Outstanding share data as at the date of this Interim MD&A
	Common Shares Common Shares Common Shares
	Issued and	Purchase	Purchase
	Outstanding	Warrants	Options
Balance at March 31, 2023	274,984,848	300,000	19,414,286
Balance at the date of this Interim MD&A	274,984,848	300,000	19,414,286

Financial Instruments and risk management

Financial Instruments

Financial instruments are classified into one of the following categories: fair value through profit or loss ("FVTPL"); fair value through other comprehensive income ("FVTOCI"); or at amortized cost. The carrying values of the Company's financial instruments are classified into the following categories:

The Company's financial instruments recorded at fair value require disclosure about how the fair value was determined based on significant levels of inputs described in the following hierarchy:

Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions occur in sufficient frequency and value to provide pricing information on an ongoing basis.

Level 2 - Pricing inputs are other than quoted prices in active markets included in Level 1. Prices in Level 2 are either directly or indirectly observable as of the reporting date. Level 2 valuations are based on inputs including quoted forward prices for commodities, time value and volatility factors, which can be substantially observed or corroborated in the market place.

Level 3 - Valuations in this level are those with inputs for the asset or liability that are not based on observable market data.

The carrying values of the Company's cash, receivables, due from related party, deposits, trade and other payables and customer deposits approximate their fair values because of their short term to maturity and/or the interest rates being charged. These financial instruments are classified as financial assets and liabilities at amortized cost and are reported at amortized cost. The carrying values of the Company's loans and borrowings that are payable on demand approximate their fair values due to their short-term to maturity.

Risk management

The Company is exposed to a number of risks arising from its use of financial instruments. The Company is or may

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