
Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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Join companies like Zoom, DocuSign, and Twilio using our systematic pricing approach to increase revenue by 12-40% year-over-year.
In today's increasingly energy-conscious market, subscription-based energy management and efficiency services have emerged as crucial solutions for businesses seeking to reduce their environmental impact while controlling costs. However, developing the right recurring pricing strategy for these services requires careful consideration of value delivery, market demands, and customer needs.
Organizations across industries face mounting pressure to optimize their energy consumption. According to the International Energy Agency (IEA), commercial buildings account for approximately 18% of total U.S. energy consumption and greenhouse gas emissions. This reality, combined with volatile energy prices, has created significant demand for ongoing energy management solutions.
Subscription models offer several advantages over one-time consulting services:
The most effective recurring efficiency service fees are built on demonstrable value. According to research from Deloitte, organizations implementing comprehensive energy management programs typically achieve 10-30% energy savings within the first year.
Your pricing strategy should clearly connect to these tangible outcomes:
Most successful building energy service pricing models incorporate tiered options that allow customers to select service levels matching their needs and budgets:
Basic Tier: Might include automated monitoring, monthly reporting, and basic alerts for anomalies in energy consumption patterns. Pricing typically ranges from $0.03-0.10 per square foot annually.
Standard Tier: Adds features like detailed analytics, quarterly strategy sessions with energy experts, and implementation support for simple efficiency measures. Pricing generally falls between $0.10-0.20 per square foot annually.
Premium Tier: Often includes dedicated energy managers, advanced modeling, continuous commissioning, and capital planning support. Premium facility conservation pricing commonly ranges from $0.20-0.40 per square foot annually.
This approach bases recurring fees on the physical size of the facilities being managed. According to a survey by the Building Owners and Managers Association (BOMA), this is the most common approach for facility-wide services.
Advantages:
Considerations:
This model ties recurring fees to the actual energy consumption of the facility, typically charging a percentage of overall utility costs or a fee per unit of energy managed.
Advantages:
Considerations:
Many sophisticated energy management subscription services incorporate performance-based elements, where a portion of fees is tied to achieved savings.
According to a study by the American Council for an Energy-Efficient Economy (ACEEE), performance-based contracts can increase energy savings by 25% compared to fixed-fee arrangements by better aligning incentives.
A common approach is the "shared savings" model, where the provider receives a percentage (typically 20-50%) of verified energy cost reductions.
Before presenting any pricing options, successful energy service companies engage in thorough discovery processes to understand:
This information allows for customized pricing that directly addresses the prospect's specific situation.
When presenting recurring efficiency service fees, focus on ROI rather than absolute cost. For example, frame a $50,000 annual subscription as "typically delivering $150,000-$200,000 in annual energy savings" rather than simply stating the fee.
According to research from McKinsey, energy efficiency investments consistently deliver among the highest returns of any sustainability initiatives, with typical payback periods of 2-4 years and internal rates of return exceeding 20%.
When prospects resist pricing, it often stems from uncertainty about results rather than the absolute cost. Successful providers overcome this through:
Different sectors have unique energy profiles and requirements that should influence your pricing strategy:
Healthcare facilities often operate 24/7 with stringent environmental requirements and reliable power needs. According to the U.S. Department of Energy, hospitals use 2.5 times more energy per square foot than typical commercial buildings.
Pricing for healthcare tends to be premium due to:
Industrial energy management services typically focus heavily on production equipment optimization and process efficiency in addition to building systems.
Pricing models often incorporate:
For multi-tenant commercial properties, energy management services must navigate split incentives between building owners and tenants.
Successful pricing approaches include:
The energy management subscription landscape continues to evolve with several emerging trends:
As carbon pricing and regulations expand globally, energy management services increasingly bundle carbon accounting, reporting, and reduction strategies into their offerings.
According to PwC's 2023 Climate Tech report, 78% of executives surveyed plan to increase spending on technologies and services that support carbon reduction goals, creating opportunities for expanded service offerings and premium pricing.
Artificial intelligence and advanced automation are transforming energy management, enabling more sophisticated analysis with less human intervention. This simultaneously:
Advanced energy management increasingly incorporates grid interaction, enabling participation in demand response programs and grid services.
Forward-thinking service providers are developing pricing models that include revenue-sharing from these grid service payments, creating a potential "negative cost" value proposition where the service ultimately pays for itself.
Creating an effective recurring pricing strategy for subscription energy management services requires balancing several key factors:
The most successful energy optimization subscription pricing models provide clear value, align incentives between provider and customer, and create sustainable long-term relationships that drive continuous improvement in energy performance.
By developing a thoughtful approach to recurring efficiency service fees, you can build a predictable revenue stream while delivering meaningful environmental and financial benefits to your customers.
Join companies like Zoom, DocuSign, and Twilio using our systematic pricing approach to increase revenue by 12-40% year-over-year.