Upkeep credit costs at colonies are reduced in proportion the amount of required trade items that are supplied in faction, scaling from 100% to 50%. So if you are importing everything, then you pay full upkeep. If you import 50% of your required inputs, then your upkeep is 75% of what it would otherwise be. If you supply everything in faction, then your upkeep is only 50% of what it would be otherwise.
It is a more noticeable effect on high hazard worlds, since hazard rating multiplies into upkeep costs as well.
You can look at this by I think by hovering your mouse cursor over either Hazard Rating or Credits/month and hitting F1. I forget which one exactly.
So if you want to think of the upkeep costs as partially buying the materials, then yes, you get them "cheaper" in faction.