U.S. Utilities

Utility & State Energy Efficiency Incentives


As global demand for computing has increased, data center energy efficiency offers an important (and often untapped) savings opportunity for customers and utilities alike. Customers stand to reduce operating costs, streamline operations, and improve resiliency and reliability. As some of their largest customers, data centers are an increasingly important component of a utility’s energy efficiency program portfolio. Utilities stand to benefit from reducing and optimizing loads from data center by reducing loads during peak times. Utilities and state energyoOffices are critical partners in disseminating energy efficiency information, opportunities, and incentives for the marketplace. This page provides resources on data center energy efficiency opportunities facilitated by utilities or state energy offices - including program design, implementation and rollout, case studies of data center owners and operators leveraging incentives to achieve data center energy efficiency, incentive databases, and more. 

Types of Incentive Offerings

Utilities are well positioned to help data center customers realize significant energy and cost savings through the pursuit of energy efficient opportunities. Utilities and State Energy Offices may provide resources and incentives for new construction data centers in addition to existing facilities. The types of assistance provided varies by program, though generally falls into two categories: prescriptive and custom measures.

  • Prescriptive: Prescriptive measures are commonly applied to measures that offer reliable savings (e.g. a rebate for replacing older servers with higher efficiency servers). Prescriptive incentives are an important market penetration strategy for utilities seeking to establish and grow their data center energy efficiency programs, as it helps engage customers seeking straightforward savings opportunities.
  • Custom: Custom measures often entail an energy audit using evaluation tools and the development of a customized solution for a given data center customer (e.g adding free cooling to a chilled water system). Incentives from customized programs are typically performance-based, where payment is tied to specific metrics, like the amount of kWh or kW saved. These measures may likely require an engineering justification, and potentially metering, etc. Custom measures enable data center customers to pursue more sophisticated data center energy efficiency measures than they otherwise would have. These types of programs can provide technical expertise and devoted attention and time to data center energy efficiency that the data center customer may not have. 

The high share of custom measures can lead to higher administrative costs for data center energy efficiency programs, but the benefits (to both the customer and the utility) still outweigh the costs. Utilities may need to expend additional outreach efforts for more resource constrained, small data centers. A study conducted in the state of Minnesota found that only 2% of small data center owners and operators were aware that utility rebates and incentives were even offered for data centers.

To identify utility offerings available for your data center, contact your utility directly or explore the DSIRE database below.