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.
Note: 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.
In this article, we’ll cover:
- Utility escalation rates
- Tax rates
- How these settings affect your proposals
- Tax implications by project type
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 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 much your customer's utility bill will grow — and therefore how much value their solar system will generate — over the life of the system.
Fields
Default rate — The baseline escalation rate Aurora applies to all projects in this location. This is the value that will pre-populate when a rep builds a proposal.
Minimum (optional) — The lowest escalation rate a rep can set when overriding the default on a per-project basis.
Maximum (optional) — The highest escalation rate a rep can set on a per-project basis.
Tip: 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.
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
- 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 impacts the customer's taxable income — including savings, incentive payouts, loan interest deductions, and (for commercial projects) depreciation.
Fields
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.
Note: 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.
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 your proposals
Both utility escalation rates and tax rates feed directly into the financial outputs shown on customer proposals. Here's how each one matters:
Utility escalation rate — A higher escalation rate increases projected savings because the customer's future utility bills grow faster. Aurora uses this rate to calculate the customer's cumulative utility costs over the system's lifetime — both with and without solar.
Tax rates — Tax rates affect how Aurora calculates after-tax value for savings and incentives that are taxable. They also determine the tax shield value of deductible loan interest and, for commercial projects, depreciation.
Tip: Reps can override both settings on a per-project basis in Sales Mode if they have the appropriate permissions. These Settings values serve as the defaults that pre-populate new projects.
Tax implications by project type
Residential projects
For most residential customers, utility bill savings from solar are not considered taxable income, so the Savings are taxable option in Sales Mode should be left off. The main exceptions are customers participating in a Feed-In Tariff (FiT) program, where the revenue from selling power back to the grid may need to be reported as income — in that case, enable Savings are taxable for that project.
Commercial projects
🏢 Commercial projects only
Commercial projects have more tax levers because the system is a business asset. Aurora models the following:
Taxable savings — When Savings are taxable is enabled, Aurora counts reduced operating costs (utility savings) as increased taxable profit for the business.
Taxable incentives — Individual incentives can be marked as nationally taxable, locally taxable, both, or neither. Taxable incentive payouts are added to the customer's taxable income in the year they're received. Incentives occurring in Year 0 are counted toward Year 1 taxable income. See Incentives for details on configuring incentive tax settings.
Deductible loan interest — Some loan types allow the borrower to deduct interest payments from taxable income, including PACE loans (when property tax is deductible) and mortgage-backed loans. This is configured in the Loan editor.
O&M expense deduction — If O&M is Tax Deductible is toggled on in Sales Mode, Aurora subtracts operation and maintenance expenses from taxable income, reducing the customer's tax liability.
Depreciation — Commercial system owners can depreciate the PV system's value on a defined schedule, reducing taxable income each year. The depreciable basis is calculated as:
Depreciable Basis = Gross System Cost − Non-Taxable Grants
For US projects: Depreciable Basis = Gross System Cost − Taxable Grants − (0.5 × Federal ITC)
Note: Non-taxable grants reduce the Net System Cost and the depreciable basis. Taxable grants do not reduce the Net System Cost for CBI calculations, but they do affect the US depreciation formula above.