Skip to content

Updated 2026-10-23 · Wells Software Consulting LLC

How colocation pricing works

Rent per kW, the three power billing models, cross-connects, setup and escalators, with a worked 36-month example.

Colocation is priced from parts, and the parts are billed differently from one facility to the next. Two quotes with the same rent can be thousands apart over a contract once power, cross-connects and escalators are counted. Here's how each part works, and one deployment priced three ways.

The parts of a colocation price

Colocation price components
PartHow it's billed
SpacePer cabinet, per kW committed, or per square foot for cages
PowerAll-in, metered at the billed PUE, or breakered on circuit size
Cross-connects$100 to $500 to install, $150 to $300 a month each
BandwidthBlended IP from the facility, or your carriers' ports
Setup and remote handsOne-time install fees; hourly hands beyond any bundled hours
EscalatorThe yearly step-up on recurring charges, often 2% to 5%

Cross-connect ranges: Inflect, 2026-04-01. The escalator range is what buyers commonly see; your contract states yours.

Size sets the rate

Price per kW falls as the deployment grows. Retail full racks run $900 to $2,000 a month and all-in retail averages about $250 per kW. Digital Realty's Q2 2026 filing shows $293/kW for new Americas contracts under 1 MW and $156/kW above 1 MW.

Inflect, 2026-04-01; Digital Realty, second quarter 2026 results (Form 8-K, Exhibit 99.1).

Three ways to bill power

All-in folds power into the rate per kW: simple, but you can't see what power costs. Metered passes through what you draw, times the facility's billed PUE, times the utility rate: fair if you run below your commit. Breakered charges for the circuit's full capacity whether you use it or not: predictable, and expensive if you over-provision.

One deployment, three models

10 kW in Chicago, two cross-connects, a 3% escalator, priced so the first months are close:

Three billing models
ModelBasisFirst month36-month totalPer kW per month
All-in$250/kW covers space and power$2,950$110,018$306
Metered$165/kW rent plus power at 70% draw, PUE 1.4$2,949$109,061$303
Breakered$165/kW rent plus $121/kW circuit charge on the full circuit$3,310$123,371$343

The totals diverge because the escalator compounds on rent and circuit charges but not on metered power, and a breakered circuit bills capacity you don't draw. That's why every bid we return is normalized to one 36-month number.

Where quotes hide cost

  • Cross-connects quoted separately from the space, or not at all
  • Billed PUE left out of a metered quote
  • Escalators that apply to power as well as rent
  • Setup fees that only appear on the order form
  • Renewal terms that reset the rate to the current rate card

Questions

What is a typical colocation price per kW?

All-in retail averages about $250 per kW per month; large deployments pay much less per kW, as Digital Realty's $156/kW for new contracts over 1 MW shows.

Is metered or all-in power cheaper?

Metered is usually cheaper if you draw well below your committed kW; all-in is simpler and caps surprises. Model both over 36 months.

Make facilities bid for it

Send your spec or the renewal notice you just received. At least three facilities that fit bid blind, and every bid comes back on one 36-month cost.

  • Blind until you pick: facilities never see your name, email, company or files.
  • Every bid on one basis: rent, power model, cross-connects, escalators and SLA credit caps.
  • You sign direct with the facility. Participating providers pay our desk a placement commission when a buyer we introduce signs. It never changes their price or how we rank them.
See live price index

Blind colocation counter-quotes

At least three facilities bid against your spec. Reply within one business day.

PDF, PNG, JPG or WebP. Redact your company name and IP blocks if you like: we need power, space, cross-connects, price and dates.

Single point of contact. Providers bid blind: they see the technical spec only, never your name, email, phone or company, and never a file you upload. We introduce you only to the provider you pick.

© 2026 Wells Software Consulting LLC. Market figures are public benchmarks shown with their sources and dates, not offers. Facility and operator names belong to their owners; RentColocation.com is not affiliated with any operator listed.