Note 5. Solar Energy Systems, net

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

	September 30, 2016			December 31, 2015
Solar energy system equipment costs	$	2,301,601		$	1,846,103
Inverters		238,637			177,202
Initial direct costs		106,556			68,280
Total solar energy systems		2,646,794			2,091,585
Less: Accumulated depreciation and amortization		(277,634	)		(212,671	)
Add: Construction-in-progress		92,346			113,107
Total solar energy systems, net	$	2,461,506		$	1,992,021

All solar energy systems, construction-in-progress and inverters have been leased to or are subject to signed Customer Agreements with customers. The Company recorded depreciation expense related to solar energy systems of $24.5 million and $19.3 million for the three months ended September 30, 2016 and 2015, respectively, and $67.4 million and $51.3 million for the nine months ended September 30, 2016 and 2015, respectively. The depreciation expense was reduced by the amortization of deferred grants of $3.7 million and $3.5 million for the three months ended September 30, 2016 and 2015, respectively, and $11.1 million and $10.6 million for the nine months ended September 30, 2016 and 2015, respectively.