Understanding the Pricing Process
Last updated: April 20, 2026
This article summarises the key entities and procedures for Pricing/Quoting in Factor. Refer to other articles in this collection to get a more detailed understanding of the various components explained here.
The pricing process comprises of the following steps:
Consumption weighted shaping to determine how the customer's consumption tracks against market price movements.
Calculate customer prices from shaping and market forwards
Period weight the prices into calendar or financial years
Apply additional rate sets which may be relevant e.g. environmental.
Pricing prerequisites
Price index defined (e.g. spot prices)
Contract futures and forwards defined with prices uploaded
A pricing template configured before starting the pricing process. Pricing Templates define different base data to use in any given pricing request.
Pricing Process
Price weighted shaping
The given consumption is weighted against spot prices, to determine how the consumption tracks against spot price movements. This process is called price weighted shaping.
Our Shaping knowledge base article explains the maths in more detail. This process outputs a load weighting for Peak and Off Peak.
📄 How does consumption shaping work?
Calculate Customer Peak Off Peak Prices
Each market forward price (defined in the pricing template) is multiplied by the respective load weighting e.g. Peak and Off Peak to determine the customer shaped rates. At this point the customer specific energy prices have been produced, these prices are unique to this customer.
Period Weighted Shaping
Each pricing process will output energy rates in either calendar year or financial year. Period Weighted Shaping takes multiple time sliced prices for any period and weights them into a single price for either a calendar year or a financial year.
Our price weighting knowledge base article explains the maths in more detail.
📄 How does price weighted shaping work?
Applying Additional RateSets
The final step in pricing is to add any additional RateSets which were configured either in the template or in the pricing process, to the final quoted prices. For example, a template may be specific to a particular region, and define a carbon levy which must be included for all quotes in that region.
Factor will add any configured additional rate sets to the customers final quoted prices. These additional rates are not merged or weighed with the calculated energy rates.
Getting started
Get started by creating a pricing template at https://app.usefactor.io/pricingTemplates.