Why Solar-Powered Datacenters Are A Big Deal

Solar-powered datacenters are all the rage these days.

Earlier this month, Apple announced it will buy $848 million worth of solar from a 130MW power plant created by First Solar for its offices and datacenters and other facilities. The company also said it will also spend $2 billion on a global command center for datacenters in Arizona powered by solar.

The solar installed in North Carolina for running datacenters generates enough power to run 213,000 computers, according to SEIA.

Google gets 35% of its power from renewable sources.   Microsoft has its renewable datacenters.

These strategies have an obvious PR benefit: Greenpeace for years have complained about the lack of renewables at high tech companies. These companies also tend to recruit employees with very strong views on energy: a renewable profile is good for recruiting.

Electricity is often the second or third highest variable operating cost for large datacenter owners and solar provides long-term stability in pricing. In 2013, Google said it had already saved over $1 billion on datacenter energy initiatives. (Chris Helman wrote an interesting article on pricing and predictability on the Apple deal here. The long and short of it: solar costs more now, fossil prices are tough to predict over 25 years and stability has value in its own right.)

But the most important part of these developments revolves around the fact that these are datacenters, the most finicky facilities in the world. Even minute spikes or sags in current can wreak havoc on these companies, their equipment and their customers. If you’re Box , an unexplained power outage at a primary datacenters is the equivalent of a factory fire. Billions get invested annually into uninterruptible power supplies, which are essentially huge banks of batteries that exist to smooth out the flow of electrons.

In other words, we’re looking at the ultimate test case for solar. Over the next several years, REITs, campuses and other large property owners will have the opportunity to study the data, use-case scenarios and potential for savings and realize, in all likelihood, that the risks they face in going solar are substantially lower than earlier anticipated. Solar will shift from something that’s nice to do to something that should have been done yesterday. Companies like First Solar will graduate from being panel makers and solar developers to being seen as primary infrastructure providers.

The storage industry, of course, will benefit too. Storage and UPSes are the magic that allow the sun to shine at night and the vast majority of datacenter deployments will include a provision for storage. Many will also begin to experiment with leveraging UPSes for demand response or frequency regulation. The fees that can be obtained from utilities will turn UPSes from sunk capital costs to a source of revenue.

If solar can make it here, it can make it anywhere.