How do colocation data centres charge for power?
Power is the product a colocation data centre really sells. There are two ways it is billed — and they behave very differently.
Power use in a colocation data centre is usually charged under one of two models: bundled, or pass-through.
Bundled power
In the bundled model you pay for a set amount of power each month and use as much or as little as you like within that limit. It is the most common approach — historically how colocation power was charged, and the easiest to manage. The operator sets pricing tiers, say 3 kW, 6 kW and 9 kW. A customer estimates the maximum demand of their rack — perhaps 4 kW — and is billed for the 6 kW bundle as long as they do not exceed it in the month.
It stays popular in retail colocation because it is simple: every customer sits on one of a few prices, there is no need for real-time billing — just a maximum-demand reading at the rack — and because the typical retail customer draws only 40–60% of their estimated power, the operator profits on the headroom they do not use.
Pass-through power
In the pass-through model the customer pays for the power they actually use. This is common where hyperscalers take space in colocation, and with larger wholesale customers. The customer estimates maximum demand to size the data hall, and the operator agrees the part-load and full-load PUE with them so the billing basis is clear.