Data centers looking to further green initiatives and lower annual electricity bills may want to incorporate solar energy as part of a tiered approach to powering data center equipment.
In order to make sure server room equipment always has a constant source of electricity and never shuts off, many data centers utilize multiple sources of power beyond just what is available from the local utility company. This often includes local grid power, on-site backup generators and batteries, but increasingly some data centers are looking to add solar panels into this mix. For example, Apple’s data center in Maiden, N.C., gets some of its power from a 20-megawatt solar farm built on premises.
Calculating Solar Energy’s TCO
Long considered a niche electricity source fit only for artificial satellites and extremely eco-friendly individuals, solar energy has become more competitive over the past few years as an electricity source. Thanks to tax incentives and falling panel prices, it is now cheaper than ever to use solar photovoltaic panels to power data center equipment. Between 1998 and 2012, the cost per watt of a system 10 kilowatts or smaller has fallen 14 percent year-over-year, the Lawrence Berkeley National Laboratory and U.S. Energy Department found. Furthermore, the installed price of a solar module decreased by $2.60 per watt from 2008 to last year.
In addition, a number of states have enacted solar energy tax incentives that help make the alternative electricity source an even more cost-effective option in certain parts of the country. While warm weather states like California and Arizona have notable solar tax breaks, significant reductions are available in some colder states like New Jersey, Massachusetts and New York as well, according to the Database of State Incentives for Renewables and Efficiency.
Solar Energy’s Limitations
Despite its many benefits, solar energy at best should be seen as a supplemental electricity source, since it is not a reliable full-time power supply. For instance, daily fluctuations in available sunlight affect how much electricity panels can generate, and of course solar equipment provides no power during the nighttime. While batteries can store excess electricity generated during peak hours for use during other periods, this would not be enough to keep data center equipment running at all hours.
Due to state-by-state differences regarding available sunlight and financial incentive programs, the estimated break-even point of a photovoltaic installation can vary significantly. According to solar energy companies and adopters, a solar energy installation will recoup initial investment costs between four and 14 years after being installed. For example, while an array in New York yields a 17 percent internal rate on return, an Oklahoma installation has a 0.3 percent IRR, Geostellar reported.
Still, as panel prices drop to new lows and with pro-solar tax breaks likely to remain on the books for the next few years, solar energy is becoming a cost-effective and eco-friendly way for companies nationwide to add supplemental power for data center equipment.