Net Cost is the amount a customer owes for a solar system after subtracting all incentives that reduce what they actually pay — but before ongoing performance-based payments like SRECs. It's the most accurate single number for communicating true system cost to a homeowner, and it appears on the Financing page, the System Summary page, and the Web Proposal in Sales Mode.
In this article:
- How Net Cost is calculated
- What counts as a Year 1+ incentive
- Where Net Cost appears
- Net Cost vs. lifetime savings — what's the difference?
- When Net Cost updates automatically
- FAQ
How Net Cost is calculated
Net Cost is calculated as:
Net Cost = Financed Amount (or Total Cost) − Sum of all Year 1+ incentives
The Financed Amount (or Total Cost for cash deals) is the full cost of the system before any incentives are subtracted. For loan deals, it is calculated as:
Financed Amount = (base cost per watt × system size) + adders + starting cost − year 0 cash grant incentives + dealer fees + storage
Year 0 cash grants (incentives paid immediately at installation) reduce the Financed Amount directly. Incentives received in Year 1 or later — including tax credits applied in Year 1 and performance-based payments — are subtracted from the Financed Amount to produce the Net Cost.
⚠️ The federal residential Investment Tax Credit (Section 25D, 30%) expired for customer-owned systems placed in service after December 31, 2025. For residential cash and loan deals, the ITC is no longer automatically applied. The Net Cost shown for new residential projects reflects this — only state, local, and utility incentives that remain active will be deducted. Always verify which incentives apply to your customer's project before presenting a Net Cost figure.
Third-party-owned systems (leases and PPAs) remain eligible for the commercial ITC (Section 48E) through projects beginning construction before July 4, 2026. For these deals, the system owner — not the homeowner — claims the ITC, and may pass the value through as lower monthly rates.
What counts as a Year 1+ incentive
Year 1+ incentives are those received after the initial installation — typically at the time the customer files their tax return or receives a rebate payment. Examples include:
- Federal or state investment tax credits (claimed on the customer's year-1 tax return)
- State or utility cash rebates paid out in Year 1 or later
- Lump-sum SREC payments (such as Illinois Shines RECs paid upfront by the installer)
Performance-based incentives paid incrementally over multiple years (like annual SREC income or MA SMART payments) are not deducted from Net Cost — they appear as ongoing income in the financial model rather than as a reduction to system cost. See the Incentives article for a full explanation of incentive types and disbursement methods.
Where Net Cost appears
Net Cost appears in two places in Sales Mode:
- Financing page — next to the financing product details
- Web Proposal — visible to the homeowner in the proposal view
Net Cost vs. lifetime savings — what's the difference?
Net Cost and lifetime savings are frequently confused. Here's the distinction:
| Metric | What it represents |
| Net Cost | What the customer pays for the system after subtracting Year 1+ incentives. A one-time cost figure. |
| Lifetime savings | The total net financial benefit over 25 years — utility bill savings minus the total cost of the investment (including financing). A long-term value figure. |
A customer could have a Net Cost of $18,000 and lifetime savings of $35,000 — meaning they invest $18,000 and gain $35,000 in value over the system's life. These figures come from different parts of the financial model and should not be added or compared directly.
When Net Cost updates automatically
Net Cost recalculates automatically whenever any of the following change:
- Financing product selection (switching between cash, loan, lease, or PPA)
- Incentives added or removed on the Pricing > Incentives page
- System price changes (pricing method, base PPW, or adders/discounts)
- Dealer fee configuration
If you change the financing product and the Net Cost does not update immediately, try switching to a different financing product and back, or refreshing the browser.
FAQ
Why is Net Cost higher than I expected?
Net Cost will be higher if fewer incentives apply to the project, if a dealer fee is configured on the loan product, or if the financing product adds a flat fee to the system cost. Check the Pricing > Incentives page to confirm which incentives are applied, and review the financing product configuration for any fees that inflate the Financed Amount.
Why does Net Cost change when I switch financing products?
Different financing products have different dealer fees and different incentive eligibility. For example, switching from a loan with a dealer fee to a cash product removes the dealer fee component from the Financed Amount, lowering Net Cost. The financing product selection directly affects the calculation.
Is Net Cost the same as the system price?
No. The system price (shown on the Pricing page) is the gross cost before any incentives. Net Cost is the system price — or the loan's Financed Amount — after Year 1+ incentives are subtracted. Net Cost is almost always lower than the system price.
Why isn't the federal ITC showing in Net Cost anymore?
The federal residential ITC (Section 25D) expired for customer-owned systems placed in service after December 31, 2025. For new residential cash or loan projects, the ITC will no longer appear as a Year 1+ incentive unless your admin has configured a state or local ITC that remains active. If you see a 30% ITC applied to a project, check whether it was a pre-configured incentive that should be removed or updated.
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