Solar Energy Systems, net

Solar energy systems, net consists of the following (in thousands):



	September 30, 2017			December 31, 2016
Solar energy system equipment costs	$	2,981,012		$	2,459,856
Inverters	304,846			260,011
Initial direct costs	142,361			117,587
Total solar energy systems	3,428,219			2,837,454
Less: accumulated depreciation and amortization	(389,538		)	(303,305		)
Add: construction-in-progress	108,702			95,217
Total solar energy systems, net	$	3,147,383		$	2,629,366

All solar energy systems, construction-in-progress and inverters are subject to signed Customer Agreements with customers. The Company recorded depreciation expense related to solar energy systems of $30.9 million and $24.5 million for the three months ended September 30, 2017 and 2016, respectively, and $87.7 million and $67.4 million for the nine months ended September 30, 2017 and 2016, respectively. The depreciation expense was reduced by the amortization of deferred grants of $1.9 million and $3.7 million for the three months ended September 30, 2017 and 2016, respectively, and $5.7 million and $11.1 million for the nine months ended September 30, 2017 and 2016, respectively.