Initially, iCloud will offer 5GB of free space at no additional cost. Mail, documents and mobile backup data will count against this storage space. Music, applications, books, and Photo Stream will not count against this storage space.
If additional storage space is needed, Apple does have tiered no-contract pricing for 20GB, 200GB, 500GB, and 1TB storage options. Additional storage can be purchased from a computer or the device and a pro-rate refund is available if cancelled prior to the end of the agreement.