The True Cost of Data Centre Infrastructure
Data centre costs are opaque by design. Operators quote headline rates that exclude significant cost components, and the total cost of occupancy can be 2-3x the initial quote. This guide breaks down every cost component so you can make apples-to-apples comparisons.
1. Colocation Costs
If you are leasing space in an existing facility, your costs fall into four categories:
**Base rent ($/kW/month):** This is the headline rate - the cost per kilowatt of committed power per month. It covers floor space, power distribution to your cabinet, and cooling.
- -Primary markets (NoVA, Dallas, Chicago):: $110-160/kW/month
- -Constrained markets (Silicon Valley, NYC):: $160-220/kW/month
- -Emerging markets (Phoenix, Atlanta, Portland):: $90-130/kW/month
- -International (London, Frankfurt, Singapore):: $140-200/kW/month
**Power (metered or included):** Some contracts include power in the base rate; others meter it separately. If metered, you pay the utility rate plus a markup (typically 10-20%). At 10 kW per rack operating 24/7 at $0.07/kWh, power costs approximately $500/month per rack.
**Cross-connects ($150-500/month each):** Physical connections to other tenants or network providers within the facility. A typical deployment requires 4-20 cross-connects. This is one of the most profitable items for colocation providers and a frequent source of cost surprises.
**Additional charges:** - Smart hands (remote technician support): $75-150/hour - Additional power circuits: $500-2,000/month each - Cabinet and cage infrastructure: Often a one-time setup fee of $1,000-5,000 - IP transit: $0.50-2.00/Mbps/month depending on provider and commit
Total cost example (1 MW deployment, primary market): - Base rent: 1,000 kW x $130/kW/month = $130,000/month - Power (if metered): ~$50,000/month - Cross-connects (20): ~$5,000/month - Smart hands, misc: ~$3,000/month - Total: ~$188,000/month ($2.26M/year)
2. Construction Costs (Build Your Own)
If you are building or converting a facility, the cost structure is fundamentally different.
**Construction cost per MW (2026 averages):** - **Shell and core:** $3-5M/MW - **Mechanical (cooling):** $2-4M/MW - **Electrical (power distribution):** $3-5M/MW - **Fire suppression, security, controls:** $0.5-1M/MW - **Total average:** $11.3M/MW (US national average)
**Market variance:** - Lowest cost: Texas, Ohio, Nevada ($8-10M/MW) - National average: $11.3M/MW - Premium markets: Northern Virginia, Silicon Valley ($14-18M/MW)
**Additional development costs:** - Land acquisition: $50,000-500,000/acre depending on market - Utility interconnection: $1-10M+ depending on capacity and distance - Permitting and environmental review: $200K-2M - Architectural and engineering design: 5-8% of construction cost - Construction management: 3-5% of construction cost - Commissioning and testing: 1-2% of construction cost
3. Operating Costs
**Staffing:** A 10MW facility typically requires 15-25 full-time staff including: - Facility manager: $130-180K/year - Electrical technicians: $70-100K/year each - Mechanical technicians: $65-90K/year each - Security officers: $40-60K/year each - Network operations: $80-120K/year each
**Maintenance:** - Preventive maintenance contracts: $200-400K/year per 10MW - Generator fuel and testing: $50-100K/year - UPS battery replacement (every 5-7 years): $500K-1M per MW - Chiller/cooling maintenance: $100-200K/year
**Insurance:** - Property insurance: $50-150K/year per 10MW - Business interruption insurance: $30-80K/year - Liability insurance: $20-50K/year - Higher in flood zones and seismic areas
4. Power Usage Effectiveness (PUE)
PUE is the ratio of total facility power to IT equipment power. A PUE of 1.5 means the facility uses 50% more power than the IT equipment alone, with the overhead going to cooling, lighting, and other building systems.
**Industry benchmarks:** - Best-in-class hyperscale: 1.08-1.15 - Good colocation: 1.2-1.4 - Average facility: 1.4-1.6 - Older/inefficient: 1.6-2.0+
**Cost impact:** Every 0.1 increase in PUE adds approximately $50,000/year per MW in power costs (at $0.07/kWh). Over a 10-year facility life, the difference between PUE 1.2 and PUE 1.5 is $1.5M per MW.
5. Hidden Costs to Watch For
- -Escalation clauses:: Annual rent increases of 2-4% compounded over a 5-10 year lease
- -Minimum commit periods:: Early termination penalties can equal remaining lease value
- -Power factor charges:: Utilities may penalise reactive power consumption
- -Metering disputes:: Ensure clear metering boundaries and audit rights
- -Decommissioning costs:: Removing equipment and restoring space at lease end
Use Our Tools
- -[Cost Calculator](/tools/calculator) — Model total cost of ownership across markets
- -[Score Tool](/score) — Assess property viability including power infrastructure
- -[Market Comparison](/tools/compare) — Compare power costs, lease rates, and market data
- -[Contact Advisory](/advisory) — Get personalised cost analysis for your specific requirements