The Utility and tax rates settings page lets account admins configure two sets of org-wide defaults: utility escalation rates and customer tax rates. Aurora uses these values to calculate projected savings, incentive payouts, and long-term financial performance across all projects in your organization.
Only account admins can edit these settings. Changes apply as defaults to all new projects but can be overridden at the project level in Sales Mode. Changes do not retroactively update existing projects.
In this article:
- How to get there
- Utility escalation rates
- Tax rates
- How these settings affect financial analysis
- Tax implications by project type
- FAQ
How to get there
- Go to Settings > Utility and tax rates.
- You'll see two tabs at the top of the page: Residential and Commercial. Each tab has its own separate utility escalation rates and tax rates. Select the relevant tab before making changes.
Utility escalation rates
The utility escalation rate is the annual percentage rate at which your customer's electricity costs are expected to increase over time. Aurora uses this rate to project how the customer's utility bill will grow over the life of the solar system — and therefore how much value their solar system generates each year.
A higher escalation rate increases projected savings because the customer's future utility bills grow faster. A lower rate produces more conservative projections.
Historical US residential electricity rates have increased at roughly 2–4% per year on average. Many solar installers use 2.5–3% as a conservative default. Consult your financing partner for guidance on what rate to use in your market.
Fields
| Field | Description |
| Default rate | The baseline escalation rate Aurora applies to all projects in this location. This pre-populates when a rep builds a proposal. |
| Minimum (optional) | The lowest escalation rate a rep can enter when overriding the default on a per-project basis. |
| Maximum (optional) | The highest escalation rate a rep can enter on a per-project basis. |
If you leave Minimum and Maximum blank, reps can enter any value on a project. Setting bounds ensures proposals stay within your organization's approved range and prevents reps from inflating savings projections.
Location-specific overrides
Aurora applies the default row to all projects without a specified location. You can add location-specific rows to set different rates for particular states or regions — for example, if electricity rates in California escalate at a different rate than your national default.
The location selector supports US states, Canadian provinces, and German states.
How to configure utility escalation rates
- Go to Settings > Utility and tax rates.
- Select the Residential or Commercial tab.
- Click Edit.
- Enter your Default rate for the "All projects without a specified location" row.
- Optionally enter a Minimum and Maximum to constrain what reps can enter.
- To add a location-specific rate, click + Add location, select a state or province from the dropdown, and enter the rates for that row.
- Click Save.
Tax rates
Tax rates tell Aurora your customer's marginal income tax rates. Aurora uses these values to calculate how solar affects the customer's taxable income — including savings, incentive payouts, loan interest deductions, and (for commercial projects) depreciation.
Fields
| Field | Description |
| National (federal) tax rate | Your customer's marginal federal income tax rate, as a percentage. |
| Local (state) tax rate | Your customer's marginal state income tax rate, as a percentage. |
Unlike utility escalation rates, tax rates do not support location-specific rows or min/max constraints. The values you set here apply as a global default for all projects in the selected project type (Residential or Commercial).
How to configure tax rates
- Go to Settings > Utility and tax rates.
- Select the Residential or Commercial tab.
- Click Edit.
- Under Tax rates, enter the National (federal) tax rate and Local (state) tax rate as percentages.
- Click Save.
How these settings affect financial analysis
Both utility escalation rates and tax rates feed directly into the financial outputs shown on customer proposals.
| Setting | Effect on financial analysis |
| Utility escalation rate | Increases projected future utility bills, growing the value of solar savings over time. A higher rate produces higher lifetime savings figures. |
| Tax rates (residential) | Used to calculate whether incentive income (such as SREC payments) is taxable. Affects the after-tax value of those incentives. |
| Tax rates (commercial) | Used to calculate depreciation tax benefits, after-tax savings, and the deductibility of loan interest (for eligible loan types). Required for depreciation to calculate correctly. |
Tax implications by project type
Residential projects
For residential cash and loan purchases, tax rates affect how Aurora models taxable incentive income. If an incentive (such as an SREC payment) is configured as taxable, Aurora applies the national and local rates to reduce its after-tax value in the financial model.
The federal residential Investment Tax Credit (Section 25D) expired for customer-owned systems placed in service after December 31, 2025. For residential projects financed through leases or PPAs (third-party ownership), the system owner may still claim the commercial ITC (Section 48E) and pass savings through to the customer via lower rates.
Commercial projects
For commercial projects, tax rates are essential for calculating:
- Depreciation tax benefit — the annual tax shield generated by depreciating the solar asset under MACRS or straight-line methods. Aurora multiplies the depreciable basis by the applicable tax rates to calculate this benefit.
- After-tax savings — how income taxes affect the net value of utility bill savings for commercial off-takers.
- Loan interest deduction — for HELOC or PACE loans with interest is tax deductible enabled, tax rates are used to calculate the annual deduction benefit.
⚠️ Tax rates must be set before depreciation will calculate. If the commercial financial analysis is showing zero depreciation benefit, check that national and local tax rates have been entered under the Commercial tab.
Always recommend that customers consult a tax professional to confirm applicable rates. Aurora's financial model uses the rates you configure as inputs — it does not provide tax advice.
FAQ
Do changes to utility escalation rates apply to existing projects?
No. Escalation rates and tax rates are copied to each project at creation. Changes to account defaults only apply to new projects created after the change. To apply updated rates to an existing project, duplicate it.
Can reps override the escalation rate on individual projects?
The per-project escalation rate is not directly editable in the Advanced financing settings panel. Reps use the utility rate assigned to a project to influence escalation behavior — they cannot directly edit the escalation rate on a per-project basis unless you have configured a custom utility rate for them to select. Account admins set the escalation rate default and optional Minimum/Maximum bounds in Settings > Utility and tax rates, which constrains what reps can enter.
What escalation rate should I use?
There is no single correct value — it depends on your market and your organization's modeling approach. Many US solar installers use 2.5–3% as a conservative default. If your financing partners have a specified rate, use their value for consistency with their underwriting model. Consult your financing partner or a financial advisor if you're unsure.
Why is depreciation not calculating for a commercial project?
Depreciation requires national and local tax rates to be set under the Commercial tab. If both fields are empty, Aurora cannot calculate the depreciation tax benefit. Set the rates, then re-run the financial analysis.
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