How do you calculate project margin?

Subtract delivered cost from contract price to get gross profit, then divide by the price basis. With a $125 price and $100 delivered cost, gross profit is $25 and margin is 25%.

What is a good gross margin on a microgrid project?

Integration and EPC gross margins commonly land in the 15-30% range depending on scope and equipment pass-through; 25% like the worked example is solid for a balance-of-system-heavy build.

Project margin vs quote margin — what is the difference?

Quote margin uses estimated cost at bid time; project margin uses actual delivered cost at close-out. The gap between them is your execution variance.

Should margin be on price or on cost?

This calculator divides by a price basis, giving margin-on-price (gross margin). Margin-on-cost (markup) yields a higher percentage from the same dollars, so always state which you mean in a contract.

Why use a separate price basis input?

On DER jobs with pass-through equipment or owner-furnished materials, the basis you measure margin against may not equal the full contract price, so the calculator lets you set it explicitly.

Does this include overhead and warranty?

No. It is gross margin only. Subtract overhead allocation, warranty reserve, and any financing cost to get to project net margin.

Microgrid & Distributed Energy Equipment calculator

Project Margin Calculator

Project Margin is the gross margin a microgrid or DER integration job earns after all delivered costs — battery racks, inverters, switchgear, EPC labor, and commissioning. Project controllers and integration GMs use it to see how much of the contract price survives as profit once the skids are energized and the job is closed out. Unlike the quote stage, this metric uses actual delivered cost, so it tells you whether the build held the margin you originally bid. It is the single number that decides whether a portfolio of microgrid projects is healthy or quietly bleeding on execution.

What this calculator does

Estimate the gross margin on a microgrid or distributed energy project by comparing project price against delivered cost, so teams have a clean margin percentage for a go or no-go review.
Use it when a microgrid or distributed energy project needs a clean margin number for a go or no-go decision.
It computes project gross profit (price minus delivered cost) and divides by the chosen price basis to return gross margin percent.

Formula used

Project gross profit = project price - delivered project cost
Project margin = gross profit ÷ price basis for margin

Inputs explained

Total project contract price:
Delivered all-in project cost:
Margin price basis (usually contract price):

How to use the result

Use it at project close-out, or at any milestone, to compare realized margin against the margin you quoted.
It is a gross margin only — it excludes overhead, warranty reserves, and financing, so a healthy gross margin can still net to a loss on a long DER project.

Current U.S. benchmarks

Industrial electricity averages 8.66 cents per kWh across the U.S. (EIA, Apr 2026), up 5.5% from a year earlier. Energy-intensive steps carry this directly into unit cost.
Steel mill PPI stands at 348.53 (BLS, May 2026), up 6.7% from a year earlier. New factory orders are up 2.3% year over year (Census).

Common questions

How do you calculate project margin? Subtract delivered cost from contract price to get gross profit, then divide by the price basis. With a $125 price and $100 delivered cost, gross profit is $25 and margin is 25%.
What is a good gross margin on a microgrid project? Integration and EPC gross margins commonly land in the 15-30% range depending on scope and equipment pass-through; 25% like the worked example is solid for a balance-of-system-heavy build.
Project margin vs quote margin — what is the difference? Quote margin uses estimated cost at bid time; project margin uses actual delivered cost at close-out. The gap between them is your execution variance.
Should margin be on price or on cost? This calculator divides by a price basis, giving margin-on-price (gross margin). Margin-on-cost (markup) yields a higher percentage from the same dollars, so always state which you mean in a contract.
Why use a separate price basis input? On DER jobs with pass-through equipment or owner-furnished materials, the basis you measure margin against may not equal the full contract price, so the calculator lets you set it explicitly.

Last reviewed 2026-05-12.