Data Center

Energy Rebates: A Sure-fire Way to Reduce the Cost of a Data Center Upgrade

How much easier would it be to justify data center infrastructure upgrades if you were told the equipment would cost 50% less?  Probably a lot easier.

When it comes to upgrading existing equipment, data center owners can take full advantage of utility sponsored rebate programs. In states such as California, companies that are eligible for rebate consideration can offset the implementation costs of new energy efficient equipment by upwards of 50%.  Eligible products include computer room air conditioner (CRAC) units, variable speed drives (VSD), uninterruptible power supplies (UPS), lighting and more.

You can get information regarding rebate programs in a number of ways. One is to simply go to your utility’s web site, where you’ll find links to its various rebate programs. For large projects, the utility will likely work with you to determine a project plan, offer technical advice, conduct analysis and inspections. Alternatively, utility customers can work with a third party company that’s up to speed on what rebates are available and which equipment qualifies. (Schneider Electric Energy Management Services falls into that category.)

While every state is different, most offer some sort of program – mainly because it’s more cost-effective to incent customers to reduce consumption than to build more power plants. Environmental mandates limiting the amount of greenhouse gases utilities service providers can emit to produce electricity also play into the equation.

All of this works in your favor. In a majority of states, tens of millions of dollars are readily available in financial incentives.

The savings can add up quickly. While details will vary, a typical custom  program will pay its customers for both reducing consumption and for reducing demand. Rebates can range from 5 cents to 15 cents per kilowatt-hour of energy savings plus $100 to $200 per kilowatt of demand savings.

Rebate programs are constantly changing and always have expiration dates attached – although they can end sooner if the money runs out.  If you’re thinking of an infrastructure upgrade, check out what incentives you are eligible for and the process you must follow to qualify.  If you need help, feel free to contact Schneider Electric’s Energy Management Services team for assistance.


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  1. Dave

    Your figures are not representative of the true incentive landscape in North America. These are narrow views that have been generalized to represent a wide range of programs. The truth is that VFD incentive are generous and very common, while CRAC unit and UPS incentives are much less common. Some custom programs will pay for both energy savings and demand reduction but that is the exception, not the rule. Navigating the available programs and pursuing the best route(s) that will qualify to you receive the most money is no simple task, especially when managing projects at multiple facilities across different jurisdictions.

    If you’re pursuing energy upgrades for your data center and would like to receive financial incentives to do so, do your research find an expert third party to maximize the money available to you, because being “up to speed” is likely to leave money on the table.

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