Solar & battery
Solar Installer Markup Calculator
Works markup against margin, where the two are routinely confused.
Result
Markup is measured against your cost, margin against the price you charge. A 50% markup is a 33.3% margin, not a 50% one. Pricing off the wrong one is the most common way a job that looked profitable turns out not to have been.
Get a Free Business AuditHow the calculation works
Markup is measured against cost and margin against price, and both are shown because a markup applied in the belief it yields the same margin falls short. Pricing to a target margin means dividing cost by one minus the margin rather than adding a percentage to cost.
What moves the number
- Cost base the markup is applied to.
- Target margin against the markup applied.
- Whether equipment and labour are marked up differently.
- Overhead recovery within the markup.
Where this one goes wrong
A markup that looks healthy can leave a margin that does not cover overhead, and on a job where equipment is most of the cost that shortfall is substantial in absolute terms. Check the resulting margin, every time. Marking up equipment and labour at different rates is also common and defensible, since the equipment markup is visible to a customer who can look up prices while the labour rate is not.
Before you quote
- Check the resulting margin, not just the markup applied.
- Price to margin by dividing cost by one minus the margin.
- Consider different markups for equipment and labour.
Questions
About this calculator
Is a 50% markup a 50% margin?
No, it is a 33.3% margin, because markup is measured against cost and margin against price. On a solar job where equipment is most of the cost, that difference is a substantial amount in absolute terms.
How do I price to a target margin?
Divide cost by one minus the margin. For a 30% margin, cost divided by 0.7. Adding 30% to cost yields about 23% instead, and that gap compounds across every job priced the same way.
Should equipment and labour be marked up equally?
Not necessarily. Equipment prices are visible to a customer who looks them up, while labour and overhead are not, so a modest equipment markup with the margin carried in labour is a common and defensible structure.
The formula
price = cost x (1 + markup%); margin = profit / price
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How to use this calculator
- Your cost ($). Enter your own figure; the page starts at $15,200.
- Markup on cost (%). Enter your own figure; the page starts at 45%.
The result updates as you type, so you can try a figure, see what it does to price, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Your cost | $15,200 |
| Markup on cost | 45% |
What comes out
| Result | Value |
|---|---|
| Price main result | $22,040 |
| Gross profit | $6,840 |
| Margin that gives you | 31.0% |
A 45% markup on $15,200 prices the job at $22,040, which is 31.0% margin, not 45%.
How sensitive the answer is
Holding everything else steady and changing only your cost, this is what happens to price. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Your cost ($) | Price |
|---|---|
| $7,600 | $11,020 |
| $11,400 | $16,530 |
| $15,200 example above | $22,040 |
| $22,800 | $33,060 |
| $30,400 | $44,080 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Your cost ($)
- A money amount, starting at $15,200.
- Markup on cost (%)
- A percentage, between 0 and 500, starting at 45%.
What the results tell you
| Result | What it is |
|---|---|
| Price | The headline result. A money figure. |
| Gross profit | A money figure. |
| Margin that gives you | A percentage. |
A design still needs a site visit
Output and sizing figures use the assumptions you enter, not measured irradiance, shading or roof orientation at your address. Real production depends on all three, plus inverter behaviour and local interconnection rules.
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.