We partner with an investment banker to finance/refinance data center upgrades to assist customers through this process.

Does anyone know if there is any government money available to owners of Data Centers to upgrade their centers in terms of energy efficiency?

Hello John,

It is not found in outright dollars. There are EPA certifications that I have been told can be used for tax credits, but finance is something best sought through interested investment sources. For those that are investment grade rated it can be easier. Please let me know if you would like to know more about that angle of financing.

Some local/regional utility companies will provide grant funding to corporate energy efficiency improvement projects. I recently the AdaptivCool intelligent tile cooling system installed and had 50% of it funded by my local power utility provider. I contracted a local energy efficiency consultant to assist with developing the solution and getting the proper paperwork through the utility company.

I asked this question to try and determine if there were any programs that anyone was using specifically to help finance their projects and it doesn't look like there is or well known.

I know there are many different government and utility programs that can assist in these types of upgrades and we have been keyed in to many of them most especially with forward thinking utilities like PG&E. It seems like a Energy Efficiency program or a "greening" program that is relevant or unique to data centers that could help a data center upgrade and retrofit would be helpful to many people involved in the industry.

If you are interested in finding financing for your data center upgrade/retrofit or interested in providing the financing for a EE project or an upgrade/retrofit, please contact me offline as I am specifically looking at this problem right now and I would be interested in hearing from a variety of people.

Thanks,
Nathan

In the US and Canada - $6 Billion dollars is available through energy incentives offered through Utility based programs. States with the highest kwH per hour charge or with densely populated cities will have larger programs and more money to spend. This figure has gone up 90% in four years and is expected to rise.

Data Centers are a new world to the utilities, but they all view it as a high rate of return space. The trick is how much will you have to pay to get the analysis and translate that into what they need to fund your project. If anyone is interested we have tons of data on where programs are and how they work.

In Australia we have a number of schemes in some ways similar to Canada, although none are specifically related to data centres.

One example: Energy bills in my home state of NSW have a levy included to generate a fund for rebates (something that is not widely understood by the public, I think).

Any energy efficiency project completed can be put forward for funding support from this schemeb- not for the whole project, usually, but something worthwhile..... And that rebate can be applied to anything the client likes (more energy efficiency projects, or the ones done already)

In the Ukraine, there is not laws, which regulated energy efficiency for the data-centers. So, I offer to my clients tehnical and economic calculation. In this document the client can see how many CAPEX and OPEX he will have in future. Thus I demonstrate to client solutions in the project and benefits from them. For example, if my client is ready to spend for 30 % more on central air now, it will pay back this extra charge in 1 year, and he will save further to 40 % a year on the electric power. By the way, usually the business department accepts the final decision, instead of technical experts. Therefore it is necessary to give financial indicators for estimate ROI for technical decisions.

As to modernization, it is better to put this possibility at an initial stage of the project. Otherwise modernization can be more expensive than a new mounted system.

Through network design we have been able to deliver significant financial savings to our UK clients. If the business case works then any rebates are just iceing on the cake.

You really need to look at the business case and really get to understand where cash flow is being affected due to the management expenses and inefficiencies of maintaining old IT infrastructure within a data centre.

Often this power hungry equipment is sitting in expensive leased rack space, with high ongoing and esculating management expenses .

Through network refreshment we have found that we can deliver a "State of the Art Environment" The resulting savings in power usage, rack rental costs and costly support can more than meet the cost of the refreshment program.

Generally we find that companies wish to avoid capital expenditure and falsely assume that by delay they are actually saving money!.

In our model the refreshment cost is generally met by their current cash flow and therefore has zero impact on capital budgets.

Most of our customers are in California and the energy costs here are one of the highest in the country. We’ve implemented energy efficiency retrofits for many customers and the best information that the data center managers use for their business case is the rate of return and payback schedule. The finance people generally prioritize their projects based on the internal rate of return so it’s up to the data center manager to be able to show that if they spend “X” amount of dollars now they will save “Y” amount of dollars month after month due to energy savings and after “Z” number of months they will break even. Every month after that will be additional savings beyond the initial investment. Utility companies like PG&E offer rebate incentives but this is usually not enough to offset a lot of the costs. It is more of a bonus and reflects a bit of immediate return on your investment. We perform this analysis after site surveys and provide the customer the information they need to take it up the chain of command for approval. The numbers, if done correctly, usually speak for itself and it satisfies both the operations and finance teams.

I cant speak to individual companies priorities for fudning, but I can speak to energy rebates across the country.

While it cant fund a project 100%, right now local and state energy rebate programs are available to fund up to 50% of upgrades. Mostly under "Custom Incentives" you can apply for rebates. Many times there are minimum requirements, but most programs operate that for the kWh you save on a project in year one, you get x cents back. Each state/local provider is different.

For my company I am in charge of handling the rebates for clients around the country and I have found that most are very good and easy to get acceptance. All that needs to be proven is the kWh savings and that can be done by simple equations.

One issue is how long will the rebates last for. Right now most are renewed yearly, but there are no promises they will be there year over year. I have heard of some that run out of money early, or just wont pick them up next years. Others will, it depends because there are so many programs.

Send me a private message and I can share details about a specific location.

I'd like to pose a differnet question, but somewhat related! Does this group consider that investment in telemetry/ instrumentation that aids transparency on both Site and System utilization a worthy expense; and, is it considered that by default such transparency aids the facility reach optimal performance? I use the example of billing - I pay more attention to my phone bill than I do my utility bill, why, the habits I can glean from how I use my phone (becuase of the transparancy the bill provides) influences my decisioning over use vs. my utility bill which is generic and difficult to translate. So - my point, transparency of usage/ trend/ behavior makes me use the device more efficiently; and with this as a rule of thumb of human tendancy - would our DC's be more optimal if use was really understood!

Comments?

Ashley.
Summed up very well indeed.
Similar anology could be used to your car with on board engine management, monitired on the dashboard.....hit the gas to hard, your in the red.
So I believe your point is very valid and indeed without this investment it makes investments in cooling/power efficiency meaningless.

Nathan et al, there are a number of ways to accomplish funding for Energy Efficiency Upgrades and Retrofits. We are helping DC customers indentify opportunities for energy efficiency and cost reduction where the local power company covers up to 75% of the Study, and then provides $400 for each kilowatt saved after energy efficiency implementations. This is a significant incentive to review the facilities opportunities for energy efficiency measures, and if implemented carefully and correctly, pay for most of your implemented measures. I know this is the case in Colorado and L.A., as we are helping a major DC operator identify those opportunities for their facility there. Would have to find out for SFO. Also, on BMS, EMS, and other systems, absolutely! The key to even better efficiency and better management and control. This is especially so as we move into Cloud Computing where demand for energy, and hot spots can change dramatically in such a short span.

Ashley - if you extend your question just one little inch you have the question to end to all questions. On your phone you can see usage by type (=value) versus cost and you can adjust your own behaviour. In your data-centre if you knew what the 'value' of the traffic was (e.g. company-revenue/email) you could compare it to the cost (e.g. £/transaction) and adjust behaviour of the employees. BUT WHO KNOWS THE 'VALUE' OF OUR LOADS?

Dont forget: 60% of the internet traffic (by volume) in the world is pornography ... and the rest is wasted

HP in the past has helped clients with financing for CapEx, and later on they work out a deal to payback via OpEx savings.

The Carbon trust has money available via the ECA Energy scheme.

Ian and Ashley have a very good point, in my opinion, regarding what is the value of energy used per IT compute? I have seen some data regarding this in some energy management software packages like powerassure, but I think there is a lot more work to be done in this space. However, I don't think the answer to this is by reducing the IT computes in order to reduce energy use at this time, as IT and the ability to use virtually unlimited information assets has been a huge driver of the information age revolution we are experiencing right now throughout the world. Having the ability to provide this energy to the data centers of the world is crucial so we can keep on this path of economic development. While being smart about energy and effectively using it instead of wasting it in outdated servers and inefficient data centers is foolish, the push to conserve and be smarter about what we use is crucial in my opinion. We all know that we can't build endless power plants to provide endless energy but we also can't restrict the demand side that will harm our businesses. The solution is therefore to be smarter about what we use and optimize everything we can.

For the US, taking advantage of the utility rebates for green DC initiatives is a must these days...you should also know the rebates are reducing year over year. DC operators can also leverage various finance vehicles to support their growth, dependent on their strategies associated with their assets, their credit profile and scope of the project, etc. I've seen DC operators successfully utilize Contract Financing, Equipment Leasing and Financing, AR Financing, Private Equity to support the deployment of green initiative projects (Cooling Retro-Fits, Power Efficiency Upgrades, New Customer Build outs, etc.) We've also seen a combination of the above mentioned vehicles leveraged for one individual project.

Also, it's important for small to mid sized DC operators to be aware of the updated Sec 179 deductions for 2011. The updated changes can potentially provide significant tax benefits that can help boost your working capital in 2011!

Nathan, great dialog. Our roadmap is to always contact the utility company to discuss incentives. To clear the air on PSE&G, theirs is a Pay for Performance program and not a giveaway, the program requires hard validation data before the incentive is fully realized. There are companies in the US that will work for the savings realized from an energy study with the recommendations implemented. This is a win all around as it fosters a trusted partnership, stated objectives and the same hard validation data. Ashley raises a great point....and I agree. We invest heavily in instrumentation for a number of reasons; not staffed 7x24 on the critical environment side, understanding how to squeeze more out of the electrical distribution on the computer room floor, preparing for any carbon tax program, and energy management. By default, instrumentation of the critical environment will change energy behavior.

I work with organizations to maximize rebates available from the local energy companies in order to perform improvements, upgrades or expansions in thier data centers. Each state is different in what rebates are availalbe, but our program not only helps discover efficiency gains and best practices, but we obtain the rebates upfront to cover part of the costs of the upgrades and improvements. Our program puts the full rebates available up front so the upgrades can be done immediately with in the Data Center. Of course every state is different, but we will talk to you about what is available to you at your location. In our program you do not need to worry about tracking down the rebates or wondering when they will expire because you get them upfront. This allows you to obtain monies and a much quicker ROI on improvements you need to do within your data center. If you would like any case studies or more information, please feel free to reach out to me privately.

There is a ton of money out there!!!!

Some DC owners have called AFCO for assistance in assessing their data center and provising efficiency recommendations. After assesment, AFCO engages the agents of the utilities to work out a custom rebate for them based on the one year estimated megawatts saved.

For example in a small 5 rack IT room, by applying logic and math we were able to save the client $23K in energy per year, (38K BTUs obviated in modified space) which resulted in a $11K check from the utility to the client.

Bob and all,

Excellent point about the tax benefits in equipment lease programs, that can make a big difference for an organization.

Summing up, I think a lot of people have mentioned the incentives and rebates that are offered through the government or utility (same thing really) and that has to be part of the structure in financing improvements if you want to lower costs and be competitive.

What I was specifically asking about however, is to identify EE financing programs and retrofit programs that are out there to look at models for paying for improvements and upgrades.

This goes back to what my firm is now offering, in that we are offering to finance upgrades and retrofits with an energy focus with the payback being used in the energy that you have saved through your energy efficiency program. No upfront costs, and all the payback is through money that you have saved from the utility. I can be reached via email to discuss any data center improvements that you or your customers would like to make or at 510-566-1655.

This is an excellent and informative discussion. I'd like to share a white paper that describes the process required to obtain state and utility incentives for improving EE in data centers. Neuwing has successfully helped its clients obtain millions of dollars in incentives for their data centers...largely on a success-fee basis. The white paper can be downloaded here... http://www.neuwingenergy.com/Press-Releases/Neuwing-Energy-Ventures-Co-A...

I'm not sure how relavant to funding data centre upgrades this is to be fair, but we are seeing agreat deal of more energy efficient chiller technology upgrading since the carbon reduction initiatives and taxation incentives in th UK and the use of the new Danfoss Turbocor oil less compressor technology in data centre chillers. This technology is giving operators up to 50% energy savings on their cooling, Barclays and Colt have announced savings up to 70% recently. This chiller technology is available throughout Europe via Klima- therm in the UK and is also available in the US. This technology is relatively new, but has been istalled in chillers and won awards on both sides of the pond, since 2003, it will revolutionise the refrigeration industry.

Through network design and by aquiring the right infrastructure we find that substancial reductions in power can be achieved.Often companies can be short sighted in thier purchasing decisions, often due to budget constraints. We find that by obtaining state of the art equipment we are able to deliver signifcant improvements in performance. The saving in power and the reduced rack space requirments more than ofsets the additional expediture. Additional savings apply as less heat is generated thereby reducing cooling requirements.We focus on designing network solutions that take into account future business growth. Once you understand the business case you can optimise the services that need to be delivered and do so with efficiencies built in to the model. I agree with Nathan, their is no point feeding power to outdated energy hungry servers!

I have a great guy that finds different levels (municipal/state/federal) incentives/rebates and will only get paid by a percentage of the funding you receive. It is a low risk high return. We partnered on a $200M data center a couple of years ago and was great to work with.

I also have another boutique firm that specializes in DC infrastructure upgrades and funding. It is performance contracting without the circus of big business and you can't go wrong when you don't pay unless you save. I have found that in this market that my clients are taking less risk and prefer guarantees over promises.

See a lot of aspects to be considered, but goal will be finally to show return of the upgrade investment in business case. Should include the savings by EE over time but must also include lifecycle state consideration of the equipment to be upgraded. If related to replacement investment the EE elemets of the business case might be sufficient to cover the plus for paying higher efficient equipment versus 'conventional'. Further points to evaluate as already mentioned in the community are governmental benefits on taxes etc but which usually country specific. One big point when it comes to compare the new business case is: Only what has been measured can be managed and optimized. So if there is today not yet a proper measurment & mgmt established for EE in the DC with what to compare current with future state ?

A key component to any utility rebates or credits to assist with upgrades is performing an advance walk through with the utility company. They want to physically see what will be upgraded or replaced in advance of a project. Getting assistance in advance is important. In most cases, if you've already purchased equipment without having a walk through by the utility along with a calculated analysis of energy before & after, you could be setting yourself up to be disqualified. My advice, work with Data Center partners that understand what your trying to achieve in savings so you stay within budget, make sure they understand utility & governemnt processes along with a local point of contact, and have a clear written picture as to what they (DC Partner/Utility) will commit to you in the form of rebates or other incentives once your project is complete along with a turn around time to receive the check. Good feedback from everyone!

If you were focusing on Lighting (with LED's), we typically support our customers through reasearch of the financial opportunities.

Depending on where you are located, and also who supplies your electricity, some Grid companies do offer rebate incentives surrounding energy savings focused at the DC. A TA (Technical Assessment) would need to be approved by the Grid Company.

Our AdaptivCOOL solution for energy efficient is approved by several US utilities for rebates. Several customers have received 50% of investment up front from utilities.

Data Center Rebates has been successful obtaining rebates from utility companies based our our "Industrial Efficiency" methodology.n addition, be can provide tech refresh options to facilitate the cash flow. In one situation rebates were over one million dollars.

The most important consideration is taking a hollistic approach to the data center. Data Center Rebates (DCR) has agreements with utility companies, who fund audits and rebates. DCR also has financial lease options to take out equipment and provide flexible plans including residual value. Please contact me for assistance. 760-476-1588