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Utility rebates offer financial incentives for data center efficiency

Utility rebate programs across the U.S. are offering data centers financial incentives to cut energy consumption.

To help combat increasing data center energy consumption, utilities and energy-efficiency program administrators are offering financial incentives for data centers to become more efficient. And there appears to be a real opportunity for many data center managers to reap financial rewards for measured energy savings.

Efficiency rebate programs in major metropolitan areas:
- Los Angeles Dept of Water and Power
- Pacific Gas & Electric
- Sacramento Municipal Utility District
- San Diego Gas & Electric (Sempra)  
- Southern CA Edison      

- ComEd  

New York City
- Con Edison

- Austin Energy
- Oncor Electric Delivery: Contact Jay Brummett of Intergy at 214.471.7861 (cell) or
- CPS Energy  

Washington, D.C.
- Pepco 

A good starting point to identify available data center utility rebate programs is the Consortium for Energy Efficiency (CEE). CEE is a group of efficiency program administrators from the U.S. and Canada that works with over 100 members to promote energy-efficiency opportunities in data centers.

"CEE members offer prescriptive IT or data center measures to their business customers (a per-kilowatt-hour incentive) or provide program assistance to data center managers for a specific savings action that they might take," said Jason Erwin, senior program manager at CEE.

For utilities that are not members of the CEE, data center managers should go to the local utility's website to see the specifics of their local programs. Even if the utility does not have a program, Erwin recommends beginning a dialogue with the utility, because many of them will have customized offerings or add new offerings over time.

In some of the incentive programs, companies must perform energy audits to assess data center energy consumption, but there may be some financial assistance available. "If a company meets the program criteria, there are some cost-sharing arrangements that may be available on the audit side, or in some cases the utility may pay the full costs for an energy audit," says Erwin.

Erwin said that data center managers should contact their local program before initiating a project. Erwin also said efficiency rebates that promote a prescriptive measure tend to go faster.

He also notes that utilities are mindful that many data centers are mission-critical facilities and have a willingness to work with data center operators to reduce energy use within this constraint.

One of the best opportunities to take advantage of efficiency incentive programs is when data centers are making changes such as capital equipment upgrades, retrofitting existing data centers or constructing new facilities.

For managers who want to pursue data center energy-efficiency rebates, there will be some work in terms of upfront planning, communicating with the efficiency program administrators and coordinating efforts to get the efficiencies in place. However, implementing such a program could be a first step toward beginning a long-term efficiency strategy. In creating or assisting in the development of such a program, IT managers can also show their commitment to C-level executives.

What did you think of this feature? Write to's Matt Stansberry about your data center concerns at

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