Virtualization: How to Get Your Power Company to Pay
Utilities across the U.S. are offering financial incentives to companies for their virtualization projects and other efforts that make their data centers more energy efficient.
Wed, April 07, 2010
CIO — It might have been the rage in 2006, but interest in green IT drooped along with the economy during the last two years, analysts say.
Meanwhile, virtualization and cloud-computing projects hit the front burner because they can reduce the need to buy new hardware and take better advantage of old equipment, according to Ian Song, client-computing and green-IT specialist at IDC.
Virtualization and cloud computing initiatives also help to reduce energy and save money. Consequently, some utilities are offering financial incentives to companies that undertake energy-efficiency initiatives.
A 2009 study from Beacon Consultants Network found many utilities that are willing to pay anywhere from $6 per computer to 100 percent of the cost of power-management systems. Even projects only peripherally connected to power management could bring an unexpected payback.
Nationally, 55 utilities offer some form of payback for virtualization specifically, according to VMware. The California Public Utilities Commission has earmarked $3.1 billion to help fund such programs in California. PG&E (PCG), for example, provides a range of incentives for power-saving IT projects, as do other California power companies such as Sempra Energy in San Diego. The U.S. Dept. of Energy also helps fund and promote green-IT conversions.
Energy companies have good reason to offer these incentives to corporate IT departments. IT of all kinds generates two percent of global carbon dioxide every year, one quarter of which is from servers and cooling and 39 percent of which stems from PCs and monitors, according to a 2007 Gartner study.
Power management can save an organization with 2,500 PCs $40,000 per year by cutting power consumption by almost half, Gartner notes in a different report.
Companies Cash In on Virtualization, Energy Incentives
Many companies are benefitting from these incentives. NetApp earned $1.4 million in rebates at the end of 2008 after replacing its data center with a more efficient one. Hosting provider Fortune Data Centers got $900,000 last year for data center upgrades it said would save it $4 million in electricity costs per year.
Much simpler methods of power management, such as turning off all the desktop PCs at night when no one's using them, is saving Ford $1.2 million per year. Fewer than 10 percent of computers in the U.S. are configured to shut themselves down at night, a feature that could save organizations $50 per computer over the course of a year, according to the Beacon Consultants Network study.
San Francisco-based employment-law firm Littler Mendelson, PC received an unexpected check for more than $10,000 from a Pacific Gas & Electric (PG&E) program it didn't know about, says David Park, senior network engineer for the San Francisco firm.
