Cost · Cost per point
Cost per Point in Building Automation: How the Metric Works
What cost per point measures, why the denominator is easy to manipulate, and how to compare building automation proposals on a like-for-like basis.
Quick answer
Cost per point divides the installed automation cost by the number of counted points. It is useful for comparing proposals only when both use the same point definition, scope boundary and inclusion list. On its own, a low cost per point can simply mean fewer points, more exclusions or a thinner commissioning scope.
The formula is simple; the definition is not
Cost per point is total installed cost divided by the number of points. The numerator may include engineering, controllers, field devices, installation, commissioning and support, or only some of them. The denominator may count physical I/O terminals, bus devices, logical objects, integration points or all of these. Two bids can therefore produce very different numbers while describing the same building. Before comparing, ask for the point schedule, the inclusion list and the treatment of spare capacity, virtual points and points that belong to another vendor's package. A cost-per-point figure without those attachments is a number in search of a definition. The same building can also appear to change cost per point between design stages simply because the count matured.
Why the denominator is easy to move
A bidder can improve the metric by counting fewer things. Excluding spare points, treating a DALI group as one point, ignoring software objects or leaving integration points in another package all reduce the denominator without reducing the work. The opposite is also possible: inflating the count with every addressable device makes the project look larger. Neither is necessarily dishonest, but neither is comparable. The metric only becomes useful when the counting rule is written down and applied consistently across bids and across phases of the same project. That rule should also state whether meters, gateways and field devices are counted as points or as separate line items.
What moves the number
Point type matters more than raw count. A digital input from a dry contact is not equivalent to an analogue output with a valve, a calibrated sensor and a control loop. Panel density matters: a panel with many points is cheaper per point than several small panels spread across a site. Wiring distance, containment, access, labour rates, protocol gateways, redundancy and commissioning depth all move the number. So does the commercial split: if field devices sit in the mechanical package, the automation cost per point looks lower while the project total does not. A comparison that ignores these differences is comparing arithmetic, not engineering. Labour rates also vary by market and should not be compared across countries without adjustment.
Using the metric honestly
Use cost per point as a diagnostic, not a benchmark. Compare it within the same project across design stages, or between bids with an identical scope and point schedule. If a number looks unusually low, ask what is excluded, how spare capacity is treated and how commissioning is measured. If it looks high, ask whether the scope includes integration, field devices, after-hours work or extended training. A defensible proposal can explain its own number line by line; a number that cannot be unpacked is not a basis for selection. The metric is most useful when it prompts better questions rather than a faster decision. Ask for the calculation, not just the result.
Factors that shift cost per point
7 rows| Factor | Effect on cost per point | Why |
|---|---|---|
| Point type | Higher for analogue and controlled outputs | More terminals, calibration and sequence testing |
| Panel density | Lower for concentrated, high-count panels | Shared enclosure, power and engineering effort |
| Distance and access | Higher for distributed or occupied sites | More cabling, travel and coordination |
| Integration scope | Higher when many third-party systems are included | Gateways, licensing and interface testing |
| Field device supply split | Lower if field devices sit in another package | The numerator excludes hardware the project still pays for |
| Commissioning depth | Higher with trend validation and witnessed tests | More engineering time and evidence |
| Spare capacity | Higher when spares are explicitly counted | Controllers, panels and licences sized beyond immediate need |
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Frequently asked
01Is a lower cost per point better?
Not automatically. It may reflect fewer points, thinner scope, excluded devices or less commissioning. Compare the definition and inclusions before comparing the number.
02Should virtual points be counted?
Count them if they are engineered, tested and maintained. State the rule in the tender so every bidder treats them the same way.
03Why do two quotes differ so much?
Different point definitions, scope boundaries, field device supply, integration responsibility and commissioning depth. The point schedule and inclusion list explain most of the gap.
04Can cost per point be used across projects?
Only with great care. Building type, density, access and integration differ. It is more reliable within one project or between bids on the same scope.
05What should a proposal show?
A point schedule, the inclusion and exclusion list, the treatment of spares and virtual points, and a clear commissioning scope.
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