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.
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.
- Database of State Incentives for Renewables & Efficiency: The Database of State Incentives for Renewables & Efficiency (DSIRE) houses information on the financial incentives available for efficient data center equipment. The DSIRE database can be searched or filtered to access the relevant information. To see the list of programs with a data center offering, click the Programs tab from the main header then Apply Filter. Filter by Technology>Energy Efficiency>Other>Data Center Equipment.
- Incentives from Consortium for Energy Efficiency Members: The Consortium for Energy Efficiency (CEE)'s Data Centers and Business IT Program Summary provides a downloadable Excel spreadsheet of the data center incentives that CEE members offer. CEE members include investor-owned or municipal utilities, state or provincial energy offices, government agencies, and nonutility program administrators.
- Maryland Energy Administration Data Center Energy Efficiency Grant Program: The Maryland Energy Administration (MEA) has announced the launch of the Fiscal Year 2022 Data Center Energy Efficiency Grant Program ("DCEEG" or the "Program"). This first of its kind in the country grant is now entering a fourth cycle and is designed to support Maryland's robust and growing information technology sector. The DCEEG provides funding on a competitive basis to encourage the implementation of cost-effective energy efficiency technologies in data centers throughout the State. Grant awards will range from $20,000 to $200,000 per eligible project, subject to funding availability. Grants are designed to cover up to 50% of the net customer cost (up to $200,000) for innovative and cost-effective energy efficiency solutions. Application accepted until January 21st, 2022 - or until funds are exhausted.
- Energy Star: Understanding and Designing Energy Efficiency Programs for Data Centers
- NRDC: Utility Energy Efficiency Program Design: Server Room Assessments and Retrofits
- Utility Energy Efficiency Case Study
- DC Pro
- Best Practices Guide
- Database of State Incentives
- Presentation Slides: Federal Utility Partnership for Data Centers Webinar