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Blog - Data Centers

How Being More Energy-Efficient is Resulting in Tax Breaks for UK Data Centers

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Computer server racks require a notorious amount of energy to run on a daily basis. In fact, it's estimated that electricity costs make up as much as a third of a data center's operating costs.


So in a move to encourage greater energy-efficiency among its data centers, the UK is now offering near-total energy tax exemption for about 100 data centers that have committed to decreasing their server rack enclosures' energy usage.


According to a January 16 Data Center Knowledge article, major data center operators like Digital Realty, CenturyLink Technology Solutions and IBM all qualify for exemption under the UK government's climate change initiative, the Climate Change Agreement. If these data centers significantly slash their energy consumption, they will see their energy tax rate cut by as much as 90%.


The tax exemption is intended to allow the UK's data centers to stay competitive with foreign data companies, the article reports.


Technically, the Climate Change Agreement exemption plan has been in place since 2001, allowing 50 or so industries to get a tax break in exchange for reducing their energy use -- but the data center industry was never eligible for this incentive until the Climate Change Agreement for Data Centers was passed last summer.


According to Data Center Knowledge, data centers that qualify for the tax break are required to commit to reducing their energy consumption by 30% by the year 2020. The computer server racks' energy-efficiency will be measured in Power Usage Effectiveness, the ratio between the amount of power consumed by IT to the data center's total power consumed.


At the qualifying data centers, work has already begun to boost energy-efficiency. By replacing old cooling systems with free air cooling schemes, data centers are able to regulate their computer server racks' temperatures with the help of natural, renewable resources, for example.


As more data centers jump on the chance to get a tax cut, the UK might just become one of the leading countries for energy-efficient information storage.


What are your thoughts on the UK's tax break initiative? How do you encourage energy-efficiency at your data center? Share your thoughts and opinions with us in the comments below!

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