Incentives For Energy Consumption

I recently had the opportunity to discuss an application for a retrofit containment system installed into an existing data center with a sales person. Not an uncommon story, given the effectiveness of separating cold and hot air streams in the data center to reduce cooling energy consumption. The part of the story that stood out for me was that the sales person enthusiastically related how the end user realized an instant payback on the containment system and had money left over. It sounded too good to be true. My first thought was just how badly is this data center being operated that the retrofitting of a containment system would yield an instant payback and still have money left over???

The customer, a large bank in northern Europe, was actually doing a very good job of running their data center and wanted to do an even better job, so they looked at containment as a way to further improve energy efficiency in an existing facility. The “instant payback with money left-over” was in fact, the result of the customer taking advantage of financial incentives offered by their government and administered through the public utilities to help businesses reduce energy consumption.

This is becoming more common as data center operators become aware of the incentives, new products such retrofit containment systems, and the ability to easily monitor power consumption and thermal condition. In the United States for instance, there are over 2,500 utility companies that offer some form incentive to businesses, including data center operators.

Some, such as PG&E (Pacific Gas and Electric) driven by California’s Title 24 legislation that requires air separation in data centers over a certain kW capacity, have more evolved processes for awarding incentives. Others are less defined and are typically described as “custom programs” in which potential incentives are determined after an assessment by a consultant, specified by the utility, and a review of a formal application submission. In some cases, incentives are not awarded until there is proof that proposed savings are actually being delivered.

Some incentive programs offered by smaller utilities are administered by specialized consultants that have contracted with the utility to provide assessment services, guide the customer through the submittal process and then validate that the savings targets have been hit. They are typically paid as part of the incentive.

The availability of funds, resources to conduct assessments, and the complexity of the process makes for a significantly different experience from state to state and region to region. Too good to be true in some and too hard to get in others.

Are incentives too good to be true? Have you successfully applied for and received an incentive? What has your experience been? Have you been made aware of incentives? Are they worth the effort to pursue? Tell us what your experience has been.

Thanks again for reading,


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