Summary

This article explains how to manage dealer fees for financed loan payment options in OpenSolar. The platform offers flexible controls to apply dealer fees as a percentage, fixed dollar amount, or both, with options to adjust how much of that fee is passed on to the customer. You’ll also learn how dealer fees affect system pricing and profit margins, and where to configure these settings.

Overview: Dealer Fee Functionality in OpenSolar

When offering financing, it's common for lenders to charge a dealer (merchant) fee. OpenSolar enables you to configure this fee for manually created loan payment options, ensuring your pricing and margins remain accurate.

Key Features Include:

• Automatic increase of system cost and system price based on the dealer fee

• Control over how much of the fee is passed to the customer

• Flexibility to define default behaviors when applying the dealer fee

How to Set Up a Dealer Fee

To configure dealer fees:

1. Go to:
   Control > Payment Options

2. Click Edit on the relevant payment option.

3. Toggle on the “Dealer Fee” switch to enable the functionality.

Inputting the Dealer Fee

You can enter the dealer fee as:

• A percentage (%)

• A fixed dollar amount ($)

• Or both

This allows you to model different lender structures flexibly.

Adjusting Dealer Fee Passed to Customer

Use the Dealer Fee Adjustment field to control how much of the dealer fee is passed on to the customer.

Example Scenario:

• Dealer Fee: 8%

• Adjustment: -8%

In this case:

• System cost includes the 8% dealer fee

• System price does not include the dealer fee

• The profit margin is reduced by 8%

🧠 This is helpful when you absorb the fee as a company expense instead of passing it to the customer.

Video Walkthrough:

Watch the following video to understand how dealer fee calculations are handled within OpenSolar, including:

• The formula used

• How calculations remain compliant with lender requirements

Incorporating Dealer Fees Into System Pricing on OpenSolar

When offering financing, many dealers include the dealer (merchant) fee in the total system price to avoid losses from fees deducted by the financing provider.

 Note: If you're using this approach, we strongly recommend verifying that it complies with Reg Z / the Truth In Lending Act. Your financing provider should be your primary source of regulatory guidance.

Example: Dealer Fee Calculation Process

Let’s say you offer two payment options:

• Cash price: $20,000

• Loan option: 10% dealer fee

Option 1: No Adjustment

If you charge $20,000 for the loan:

• Dealer fee = 10% of $20,000 = $2,000

• Net revenue after fee = $18,000

You lose $2,000 in margin.

Option 2: Add Fee to System Price Directly

If you increase the price to $22,000:

• Dealer fee = 10% of $22,000 = $2,200

• Net revenue = $22,000 – $2,200 = $19,800

Still short of your $20,000 goal.

Option 3: Try Again

Charge $22,200:

• Dealer fee = 10% of $22,200 = $2,220

• Net revenue = $19,980

Closer, but still not quite $20,000.

In practice, you'd have to iterate 7+ times to land exactly on your target revenue. For higher dealer fees, it could take 10+ iterations.

The Formula: Skip the Guesswork

To simplify the process, use this formula:

Standard System Price = Base System Price ÷ (1 – Dealer Fee %)

In Our Example:

= $20,000 ÷ (1 – 0.10)
= $22,222.22

This price will ensure you're made whole after the dealer fee is applied.

How OpenSolar Supports This

OpenSolar automatically applies this formula when you configure a dealer fee within a payment option. This ensures:

• Accurate system pricing

• No need for manual iterations

• Proper handling of loan-specific pricing logic

Regulatory Reminder

Dealer fee handling can vary based on jurisdiction and lender policies. While OpenSolar provides the tools, it’s your responsibility to ensure legal compliance.

• Always consult your financing provider before implementing fee passthrough strategies.

• Understand and comply with Reg Z / TILA regulations to avoid compliance risks.