Note
Pricing an Industrial Electrical Maintenance Contract
Most industrial electrical maintenance contracts are priced by feel. The contractor looks at the site, thinks about the previous year, and names a number that sounds reasonable. Both parties sign.
The problem is that a maintenance contract commits specific labor on specific weeks of the year for the next twelve months. If the fee does not cover those labor costs with a workable margin, the contractor ends up subsidizing the maintenance work out of installation revenue. The work gets done, but the business loses money on every visit.
The fix is a calculation done before the contract is offered, not after.
What Cost Components Go Into a Maintenance Contract?
An industrial electrical maintenance contract for factory work typically has three types of chargeable activity, each with a different structure.
Planned visits. These are the scheduled visits defined in the contract scope: panel cleans, inverter inspections, lux verification, connection checks. The number of visits and the technician headcount required for each are fixed once the scope is written. The cost per planned visit is travel plus on-site labor. Both are knowable before the contract is offered.
Statutory inspection. Thai factories with electrical systems are required to arrange an annual inspection under the Factory Act. If your agreement includes organizing and delivering this inspection, it requires a qualified inspector, a full day on site, and a signed report. The cost is travel, the inspector’s time, and on-site documentation work. This is often bundled into the annual maintenance fee but not separately calculated.
Emergency call-out allowance. Most factory maintenance agreements include a capped number of unplanned visits per year, typically one or two. Each call-out requires the same labor and travel as a planned visit, with unknown timing. For pricing purposes, assume the allowance is fully used. If the customer raises fewer calls than the cap, your margin improves. If you assume zero emergency calls when pricing, you absorb the cost of every call from your installation margin.
How Do You Calculate the Break-Even Fee for a Site?
A worked example shows the method.
A 200 kWp rooftop solar installation at a factory in Chonburi. The contractor’s home base is in Chonburi; the site is 45 minutes each way. The proposed maintenance scope includes:
- Two panel cleans per year (April and October): 2 technicians for 1.5 days each round trip = 6 technician-days
- One inverter and connection inspection (October, combined with clean): already included above
- One statutory electrical inspection (November): 2 technicians for 1 day = 2 technician-days
- Emergency call-out allowance: 1 expected call, 2 technicians for 1 day = 2 technician-days
Total committed labor: 10 technician-days per year
Using a fully loaded cost per technician-day of 2,500 (labor, transport, tools, admin overhead): the direct cost is 25,000 for this site annually.
A contractor targeting a 30 percent gross margin on maintenance work needs to charge at least 35,700 per year for this scope to break even on margin. A fee below that number is effectively a discount on the installation that the customer is collecting every year, indefinitely.
Most contractors who run this calculation for the first time find that their existing maintenance fees are running at margins significantly below their target, or below zero.
Should You Use a Flat Annual Fee or Time-and-Materials?
For planned visits and the statutory inspection, a flat annual fee benefits both parties. The contractor can staff planned visits in advance; the customer knows the cost. Neither needs a purchase order per visit.
For emergency call-outs, the choice is more nuanced.
A capped allowance within the flat fee is simpler to manage and easier to sell. The customer understands what they are buying. The risk is that you absorb the cost of calls within the cap even if the site is unusually demanding in a given year.
Time-and-materials billing for emergency calls outside a small free allowance (say, one included per year) puts the variable cost back on the customer. It is more defensible in principle but creates friction every time a bill is raised for an emergency visit. For a customer who expects emergency support to be covered, each T&M invoice is a conversation.
For small to medium factory sites, the most practical structure is a flat annual fee covering two or three planned visits, the statutory inspection, and one emergency call-out, with additional emergency visits billed at a published daily rate. Both parties know where the boundary is before any fault occurs.
What Happens When Emergency Calls Exceed the Allowance?
This is where most disputes start.
The contract says one emergency call-out per year is included. The customer raises a second call in October. The contractor is not contractually obligated to include it in the flat fee. But if the contract does not clearly define what happens next (how the additional call is billed, the rate, the process), the discussion happens under pressure with a factory that wants the fault resolved, not a billing conversation.
Before you offer the contract, write the out-of-scope response clause:
- What triggers billing for an additional call-out
- The daily rate or a reference to a published schedule
- The notification process (the customer signs a work order before the visit begins)
A signed work order before the emergency visit starts is not bureaucratic; it is the only document that removes the dispute later. Without it, the customer expects the invoice to match the contract and the contractor expects it to reflect extra work. Both are reading different documents.
FAQ
Should Subcontractor Costs Be Passed Through or Built Into the Fee?
If the statutory inspection requires a qualified external inspector, build their cost into the inspection component of the fee with a margin on top. Passing through at cost means zero margin on that element and removes your incentive to manage the subcontractor tightly. Mark up at the same rate as internal labor.
How Often Should the Maintenance Fee Be Reviewed?
Every contract renewal. Labor costs change, site conditions change, and the call-out history from the previous year tells you whether your emergency allowance estimate was accurate. A site that raised three emergency calls is a different risk profile from one that raised zero. Renewal is when the fee reflects what the work actually looked like, not what was estimated when the contract was first offered.
Is a Multi-Year Maintenance Contract Worth It?
A two or three-year term gives you staffing predictability and reduces the cost of re-scoping and re-signing. The risk is that labor costs and site complexity change, and a fixed fee over three years may be underpriced by year two. If you offer a multi-year term, build in an annual adjustment clause tied to a published labor cost index, or an explicit review right at the twelve-month mark.
A maintenance contract that is correctly priced is a reliable revenue line. One that was priced by feel is an obligation that erodes margin every time a technician pulls out of the yard. The TRACE 30 program tracks planned visits, emergency allowances, and statutory inspection dates against your maintenance calendar from the day it is set up. The overview is at /program/, or book a short call at /schedule-a-call/.