A “greener” data center offers numerous benefits, ranging from lower power bills to a better public image and the satisfaction of taking steps to protect the environment. Some of these advantages offer more financial returns than others, but each can pay dividends to companies that seek to cut power consumption in their facilities. These aren't the only rewards that companies can garner for their energy-conscious efforts, however. Governments—whatever their motivations—are eager to reduce power consumption (or, at least, reduce the rate of growth), and many are offering incentives to do so. Many utility companies, possibly facing government pressure in one form or another, pursue similar goals. Data centers, given their growing reputation as power hogs (a reputation that was magnified by the recent New York Times article, “Power, Pollution and the Internet”), are often targeted for these incentives. So, if you’re building a new data center, or you have one for which you’re considering a retrofit, here’s a look at some possibilities for cashing in on help from the government or your utility.
Breaking It Down
In looking to decrease your data center’s environmental impact, you might be considering either (or both) energy-efficiency measures or alternative energy sources. Generally, energy efficiency is the more accessible of these two possibilities. Most companies operating data centers lack the resources to implement their own alternative-energy projects, such as Apple has done at its Maiden, North Carolina, data center. This facility, when completed will have two large solar arrays and a fuel-cell plant using biogas. Google has invested heavily in wind farms. For most companies that lack similar scale, however, sources for available power depend almost exclusively on the mix supplied by the utility company. Some data center operators, however, may have the capital resources to implement small solar arrays, for instance, to supplement utility power.
Regardless of whether your company has the ability to deploy power-generation infrastructure, you do have opportunities for increasing the efficiency of your facility. Some efficiency improvements are inexpensive and mostly require just time to implement; for instance, plugging unused cable holes in cabinets to prevent air mixing between hot and cold aisles. Others, however, such as buying new, energy-efficient servers or deploying an improved cooling system, can cost a lot of precious capital. In such cases, incentives from governments and utilities can be of tremendous help.
Obviously, a single article provides insufficient room to even lightly cover every federal, state and local incentive for energy efficiency and alternative power production. Online resources, however, enable companies in the U.S. to search available incentives. The U.S. Department of Energy offers freely its Database of State Incentives for Renewables & Efficiency (DSIRE) as a compilation of programs that companies can pursue to aid their green efforts. This database covers states and the federal government, although in the case of efficiency, federal incentives are spotty at best. (But remember to check other sources as well, as new developments may not reach the database right away.) Some federal renewable/alternative energy incentives are available, however. Of course, incentive programs also exist even beyond the borders of the U.S.—power consumption by data centers is a worldwide concern.
In addition, some companies offer programs to aid data center operators in identifying not only opportunities for energy-efficiency improvement, but also local incentives that these operators can use to help finance their efforts. Schneider Electric’s Energy Sustainability Tiered Efficiency Program (EnergyStep) is one such example.
Below is a smattering of incentive programs that companies may be able to exploit to get a little help in making their data centers greener. Such programs may be run by government agencies, by utilities or (more likely than the latter case) by utilities in conjunction with governments. One caveat, however, is to remember that strings are always attached. Be sure, if you pursue an incentive program, that you carefully read the fine print and know exactly what you’re getting and what your responsibilities are.
NYSERDA Programs for New York
When you think of major data center hubs, New York City probably comes to mind as a prime example. The state (yes, there is more than just the city), through its New York State Energy Research and Development Authority, offers its Industrial Process Efficiency (IPE) program to provide companies with capital assistance in energy-efficiency investments for their data centers. According to the NYSERDA website, the agency is offering over $100 million in incentives under its IPE program. Individual programs under the auspices of NYSERDA include the so-called FlexTech to help companies cover the costs of performing efficiency evaluations of their facilities as well as the aforementioned IPE to share expenses related to capital investments to improve energy efficiency in existing data centers.
Another opportunity in New York is the Data Center Efficiency Program, which is a partnership between NYSERDA and Consolidated Edison Company of New York (Con Edison, or ConEd), a utility that supplies a significant portion of the state, including New York City. This program offers assistance with a range of efforts by data centers to increase their energy efficiency, including, for example, up to 50% cost sharing for facility evaluations to identify areas needing improvement. The program is offering $10 million total in incentives.
ComEd—Not to Be Confused With ConEd
Another major utility, Commonwealth Edison Company (ComEd—with an ‘m’), offers its own energy-efficiency program for its service area in the Chicago metro area and northern Illinois. One opportunity for data center operators is ComEd’s no-cost analysis of a facility’s energy use. Furthermore, ComEd offers cash incentives to assist with costs for a more detailed examination using specialized software to monitor system performance over an extended time period. Another opportunity involves custom incentives offering up to $0.07 per kWh saved by implementing more-energy-efficient equipment. Capital incentives include up to 100% of incremental cost or 50% of total cost for efficiency-improvement projects. The utility works with companies that operate existing data centers as well as those that are planning to build new ones. Of course, eligibility and the maximum available incentive varies depending on a variety of factors—as with any incentive program—but the assistance can be a tremendous benefit for data centers to reduce capital outlays in accelerate return on investment.
In the Heart of Texas
Austin Energy, a utility serving Texas’s capital region, offers its own data center incentives. Companies can receive as much as $200,000 toward their expenses for retrofitted server virtualization, chillers or cooling towers, and various other technologies designed to improve the operating efficiency of the data center. As with the ComEd program, Austin Energy leaves room for custom technologies that improve efficiency even if they aren’t necessarily standard implementations. This flexibility leaves room for companies to deploy approaches that work best for their situations—such as particular data center sizes, layouts and so forth. The program offers cost rebates for enterprise data centers down to even server closets, enabling a wide range of companies to take advantage of the opportunity.
Data Center Energy Efficiency Incentives Are Not Chump Change
Yes, data centers—whether new construction or retrofitting projects—can be expensive. But energy-efficiency incentives offered by governments and (or often through) utilities can be far from insignificant. In California, network-solutions company Brocade received $2.1 million from utility Pacific Gas and Electric Co. (PG&E), according to ZDNet. Its 5,000-square-foot data center has a power usage effectiveness (PUE) of 1.2 and was equipped with infrastructure from three erstwhile data centers that the company consolidated into the new facility. This consolidation is estimated to be saving the company 14 million kilowatt-hours annually.
PG&E offers incentives in areas including data center airflow management, cooling and other HVAC infrastructure, and IT systems. Programs in this latter category focus on desktop virtualization and storage consolidation, although it has in the past supported server virtualization and consolidation. (The company’s server program is being discontinued, possibly reflecting the industry-wide support for these measures as standard practices in the data center.)
Beyond the States
In other nations, incentives for greener data centers are available as well. In Singapore, for instance, the Investment Allowance Scheme for Energy Efficiency Projects (Data Centres) offers eligible companies the chance to earn incentives covering between 30% and 50% of capital expenses for retrofitting their data centers with new, energy-efficient equipment. To qualify, a company must run a data center that is at least 400 square meters (about 4,300 square feet) and that is in compliance with the country’s Standard for Green Data Centres – Energy and Environmental Management Systems.
Awareness of such international incentives may not be of much benefit to small companies, but larger organizations aiming to achieve an international presence may find such incentives to be extremely beneficial. Operating internationally has its own pitfalls, including the need to resolve sometimes contradictory laws among nations, but regardless of whether a company stays within certain borders or moves beyond them, energy efficiency is a goal that virtually everyone is targeting. Any many governments and utilities are willing to such incentives to companies to help them achieve that goal.
As previously mentioned, every data center has opportunities for improving energy efficiency. Some of these opportunities may be more or less capital intensive, but no facility is 100% efficient. This means that many data center operators have at least some shot at local efficiency incentives, if they exist. But renewable- and alternative-energy opportunities are generally less applicable. Few companies have both the means and desire to invest beyond their own business focus—particularly in a difficult economy. This isn’t to say, however, that no data center operators pursue alternative energy; Apple and Google are two industry giants that do so. For those companies that do invest in alternative power sources, incentives are available.
The DSIRE database lists a number of federal incentives for energy efficiency and renewable energy, but none of these specifically targets data centers. Most opportunities in this regard exist at the state level. Given the dismal returns on federal subsidies to renewable-energy companies (beyond data centers)—Solyndra being the banner example—and given the dismal budget status of the federal government, new programs are unlikely for some time.
The greatest opportunity for data center operators is energy efficiency. Even apart from incentives provided by governments or utility companies, greater energy efficiency provides long-term returns through lower operating costs. By adding incentives to reduce capital costs or to otherwise garner monetary benefit through investment in efficiency improvements, the value proposition becomes even more compelling. Data centers in particular have fallen into the spotlight as concerns over energy consumption and availability grow. As such, companies should do everything they reasonably can to improve efficiency, lest regulatory agencies force them to do so (probably with added compliance expenses). Incentives are available in many areas around the world to stimulate momentum toward energy efficiency, but incentive or not, you should consider how your company can improve.