Don't expect Solar Panels at an Amazon Data Center without tax incentives

James Hamilton writes an analysis of Facebook's and Apple's solar panel deployments.

I love solar power, but in reflecting carefully on a couple of high profile datacenter deployments of solar power, I’m really developing serious reservations that this is the path to reducing data center environmental impact. I just can’t make the math work and find myself wondering if these large solar farms are really somewhere between a bad idea and pure marketing, where the environmental impact is purely optical.

And closes with this.

Looking more deeply at the Solar Array at Apple Maiden, the panels are built by SunPower. Sunpower is reportedly carrying $820m in debt and has received a $1.2B federal government loan guarantee. The panels are built on taxpayer guarantees and installed using tax payer funded tax incentives. It might possibly be a win for the overall economy but, as I work through the numbers, it seems less clear. And, after the spectacular failure of solar cell producer Solyndra which failed in bankruptcy with a $535 million dollar federal loan guarantee, it’s obvious there are large costs being carried by tax payers in these deployments. Generally, as much as I like data centers, I’m not convinced that tax payers should by paying to power them.

As I work through the numbers from two of the most widely reported upon datacenter solar array deployments, they just don’t seem to balance out positively without tax incentives. I’m not convinced that having the tax base fund datacenter deployments is a scalable solution. And, even if it could be shown that this will eventually become tax neutral, I’m not convinced we want to see datacenter deployments consuming 100s of acres of land on power generation. And, when trees are taken down to allow the solar deployment, it’s even harder to feel good about it.  From what I have seen so far, this is not heading in the right direction. If we had $x dollars to invest in lowering datacenter environmental impact and the marketing department was not involved in the decision, I’m not convinced the right next step will be solar.

Given this information, I wouldn't hold my breath for a solar panel at Amazon for a few reasons.

  1. The economics don't make sense for Amazon
  2. Amazon would not want the visibility for its data centers.  (Is Amazon the next Greenpeace target?)
  3. Taxes is what drives many Amazon decisions, and they look long term at tax incentives.
  4. There are probably a bunch more, but bottom line the numbers don't support solar panels