PG&E Offers Rebates for Virtualization

Add Your Comments

Pacific Gas and Electric has announced financial incentives to encourage the use of virtualization in data center consolidations, with qualifying customers able to earn a rebate of up to $4 million per project site. The initiative, which PG&E says is the first of its kind, has industry support from VMware, Intel, Hewlett-Packard, Dell, IBM and Rackable Systems.

The incentives are based on the amount of energy savings achieved through data center consolidation, and PG&E customers in northern and central California must apply for the rebate prior to pursuing a virtualization project (see PG&E’s web site for additional details). In addition to the rebate, customers can expect to save $300 to $600 in annual energy costs for each server that is removed, the utility said. Those savings can almost double when reduced data center cooling costs are also taken into account.

“Virtualization technology is helping our customers realize significant energy and cost savings, while addressing critical data center capacity issues,” said Helen Burt, senior vice president and chief customer officer for PG&E. “By providing financial support, we hope to increase industry adoption of this technology.”


Virtualization allows multiple applications to run concurrently on computing equipment, thereby enabling customers to consolidate their data centers and remove a large portion of their existing servers. Virtualization allows operating system application stacks to be mapped optimally to the underlying hardware resources, increasing utilization rates by 10 to 15 times.

The program pays incentives based on the annual kilowatt-hour savings from reducing the number of servers in a data center, at the rate of 8 cents per kilowatt-hour. “At this time, incentives are paid solely based on the energy savings directly related to removing the computing equipment, not for the energy savings that will accrue from the reduced heat load in a data center environment,” according to PG&E, which will conduct before-and-after inspections to confirm all equipment reductions.

“VMware applauds PG&E’s recognition of the phenomenal energy savings made possible through virtualization, and in particular VMware’s broad line of industry-leading products,” said Diane Greene, president of VMware. “These savings apply to customers with small offices on up to those with relatively large data centers. They can all save on power and cooling as well as benefit from other advantages through the deployment of VMware Infrastructure products.”

VMWare is the acknowledged market leader in virtualization, with some analysts placing its market share above 50 percent. Microsoft and the open source Xen are also widely used, while SWSoft is a significant player in the web hosting sector.

Rackable Systems has recently completed an application for the PG&E rebate program using energy efficient Intel Xeon processor based servers. “PG&E’s acceptance of our application to provide rebates for customers deploying Rackable Systems’ power-friendly servers in virtualized environments demonstrates the joint commitment of Rackable Systems, Intel and VMWare to significantly improve data center efficiencies,” said Colette LaForce, vice president of marketing at Rackable Systems.

“Lowering operational costs through data center consolidation is a key opportunity for our IT customers,” said Diane Bryant, vice president and general manager of Intel’s Server Platforms Group. “The rebates that PG&E customers receive as a result of deploying energy efficient Intel processor-based servers in virtualized environments will be a big incentive for moving faster with their data center consolidation efforts.”

About the Author

Rich Miller is the founder and editor at large of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.