State tax breaks
Tax incentives from state governments can also make a green IT initiative look better on a financial spreadsheet. "Rarely do you see companies, if they're looking at a return on investment, find a federal incentive robust enough to move forward. They need to have a state incentive as well," says Bravo.
For example, New York and Oregon offer tax incentives for green buildings. North Carolina offers a 35 percent tax credit for renewable energy equipment expenditures, such as solar space heating. And Virginia allows local jurisdictions to exempt or partially exempt solar energy equipment or recycling equipment from local property taxes.
Despite these tax breaks, IT managers say solar energy still isn't affordable for most data centers.
In 2005, Highmark, a Pittsburgh-based medical insurer, built a green data center that was certified by the U.S. Green Building Council. Mark O'Gara, Highmark's vice president of infrastructure management, says the company initially evaluated the pluses and minuses of incorporating solar power into the data center's design but determined that "the economics of solar power still aren't quite there."
"We did the analysis on current electricity rates for retrofitting some solar panels, and the ROI didn't pan out from an investment perspective," O'Gara says.
A lack of awareness -- and a lack of internal communication between CIOs and company tax experts -- is also to blame for some companies' failure to take advantage of tax breaks.
"IT guys aren't thinking about tax law. They're not plugged into what utilities in their region are doing in terms of incenting investments in energy efficiency," says Christopher Mines, an analyst at Forrester Research Inc. For this reason, Mines recommends creating an ad hoc team of various department heads to discuss green IT projects and spread the word on how government incentives can strengthen the business case for them.
O'Gara acknowledges that while "there's an opportunity for the government to be an evangelist" for green IT tax incentives, it's the CIO's responsibility to find out what types of credits and deductions are available.
Some organizations aren't eligible for tax credits at all. For example, American College Testing in Iowa City has a new data center that features a geothermal cooling system, but as a not-for-profit organization, ACT doesn't qualify for federal or state corporate tax credits. However, its motivation for building the environmentally friendly building had little to do with the bottom line. The green design "just made sense for our project," says Tom Struve, ACT's assistant vice president of central services. "And it really didn't add all that much to our costs."
Phil Nail is of similar mind. He's the CTO at Affordable Internet Services Online, a Romoland, Calif.-based Web hosting company that's completely solar-powered. But Nail says AISO's green IT initiatives preceded the introduction of energy investment tax credits.
Not that he has any regrets. "We don't look at [our green IT initiatives] as, 'If we don't get these tax incentives, then we're not going to do it,' " Nail says. "We just do it anyhow. It's the nature of how we are and the nature of our business."
Cindy Waxer is a freelance writer in Toronto. Contact her at email@example.com.