How Utility Incentives Can Affect Your Equipment Upgrade Decisions

Previously a featured article on AFCOM's Inside The Box, February 2, 2016.
Written by Daniel Bodenski, PE, LEED AP, Director of Strategic Solutions at EEC

Growing capacity needs and big competition in the cloud and colocation markets are causing equipment efficiency and energy costs to once again be top-of-mind for data center owners, operators and even information technology teams. Today, a primary factor limiting data center capacity is the ability to quickly and cost-effectively accommodate growing power requirements. Furthermore, the capability to do so while maintaining a low PUE and high-energy efficiency is critical for the growth and competitive advantage of data center providers. Operating at a low Power Usage Effectiveness (PUE) is key - and largely dependent on data centers’ critical infrastructure equipment.

To help meet growing capacity needs, data centers are looking to third-party preventive maintenance providers who, together with their utility partners, can offer integrated solutions and incentive programs that can reduce costs and positively impact equipment replacement or upgrade decisions.

Equipment Affects Efficiency

Built to run 7x24x365, most data center equipment has a life expectancy of approximately 10 to 15 years. Equipment parts, however, have a much more limited lifespan.  Proper equipment maintenance, or lack thereof, can have a profound impact on lifecycles and data center operations, posing a threat to reliability, uptime and efficiency through increased service and repair.  For example, older Uninterruptible Power Supply (UPS) units tend to operate at 10 percent less efficiency than their newer counterparts.

Technology advancements have had dramatic effects on equipment.  In cooling equipment, for example, the introduction of variable speed fan motor drives, Electronically Commutated (EC) fan motors, and digital scroll compressors have resulted in increased efficiencies.  Modern UPS equipment also features "econo-modes,” which allow them to run in bypass mode within a normal operation and switch to online mode if a fluctuation in power occurs.  Even with these features, UPS units in service for 10 years will likely require most parts, if not the entire unit, to be replaced.  

Energy Incentive Programs

A preventive maintenance program is critical to ensuring maximum uptime and efficiency in a data center.  In addition to helping users know exactly when to upgrade or replace equipment through continuous efficiency, reliability and site uptime analysis, they can also identify predictive signs of failure such as capacity leakage or high motor amperage.  These efficiency-focused equipment projects are usually eligible for utility incentives, yielding operating cost reductions and in many cases, actually being largely funded by the utility.   

According to the Data Center User’s Group, only 36 percent of data center managers received an energy rebate from their utility provider last year. The EEC team is comprised of seasoned experts that can help customers discover and utilize rebates of which they may not have been previously aware. Con Edison, National Grid and NSTAR are three utilities that maintain strategic alliances with preventive maintenance providers to offer data center energy incentive programs.  Con Edison incentives range from the partial funding of energy efficiency studies, to off-setting the costs of energy-saving IT measures such as server / desktop virtualization, UPS / PDU upgrades, Computer Room Air Conditioning  (CRAC) / Computer Room Air Handler (CRAH) replacement, and airflow optimization.  National Grid offers incentives for new and retrofit efficiency opportunities including HVAC / UPS improvements and DC rectifier replacement.  Its incentives have been known to cover as much as $1M for a single project!  NSTAR provides rebates for facility assessments as well as new construction and retrofit projects such as energy-efficient lighting, CRAH units, and plate and frame heat exchangers.  Incentives calculations and payback periods vary based on utility.  For instance, Con Ed’s bases its incentives on the first-year estimated energy savings of projects and provides data centers with a rebate check when the projects have been completed and evaluated.

Along with financial incentives, data centers that take advantage of these programs also benefit from multiple sets of efficiency and gain insight from engineering experts who can offer consultation services. Engineering partners like EEC are able to offer objective analyses of infrastructure, review maintenance costs and contracts, measure energy consumption, research parts availability, conduct capacity planning analysis, and more to help data centers make the right efficiency decisions at the right time.

To learn more, watch the webinar "How Utility Programs Affect Equipment Upgrade Decisions."  or download this ebook on energy efficiency.