A large data centre co-location provider in the US is starting an ambitious project to cover its roof in solar panels, a multi-million dollar undertaking that will provide up to 4.5 megawatts of power to customers.

CEO George Slessman of i/o Data Centers, founded in 2006, says covering the 11-acre data centre with thousands of solar panels will cost between $8 million and $10 million (£6m), with the project being completed over the next year. Based on today's energy prices, the project costs more than simply purchasing energy from utilities, but Slessman believes it will pay off financially in the long run.

"Right now, it's not really an economic solution if you just do the math," Slessman says. "It's more expensive than just buying the power from the utility, but we really see it as future-proofing the business. Our assumption is that power costs are going to go up drastically over the next five to seven years."

The company's energy costs can be four to five times higher per kilowatt hour during the day than in the middle of the night, Slessman says. Solar will provide just a fraction of the power needed once the 120-megawatt data centre is completely filled with customer racks. But shifting power use from the daytime to the middle of the night will have significant financial benefits.

I/o Data Centers is building out the solar panels in phases, 500 kilowatts worth at first, and then increments of 1 megawatt each until the entire roof is covered by the end of 2010. Slessman says peak capacity will be 4.5 megawatts, when sunlight is optimal, but the maximum on most days will be 2.5 to 3 megawatts.

In June 2007, Google completed a 1.6 megawatt solar project involving more than 9,000 solar panels at its headquarters, at the time the largest US corporate solar installation, according to Google. The i/o Data Centers' solar installation will provide 2.8 times as much power.

"I don't know of anyone else in the data centre space who's doing it [at this scale]," Slessman says.

Solar isn't the only technology i/o Data Centers uses to shift the burden of utility bills from day to night. Another key strategy involves thermal energy storage. "We make ice at night and use that to cool the facility during the day," Slessman explains. "Power costs more during the day than at night, so it allows you to shift load to the off hours. By using solar during the daytime, we get to further push that cost down during the day when power is very expensive."

I/o Data Centers operates with 260 customers including BMC Software and LexisNexis. The company will soon announce a new data centre and by the end of 2010 will have 300 megawatts of utility capacity across three facilities.

The power bill is passed on to large customers, those with a 300-kilowatt footprint or higher, whereas smaller customers pay a fixed rate regardless of energy costs. I/o Data Centers therefore has financial incentive to keep energy costs down, whereas many co-location providers simply pass the entire cost of energy on to customers, according to Slessman.

"It's an inherent flaw with how the majority of data centre space is delivered typically," he says. "The data centre developer in the real estate model doesn't share the same burden as their customers. Building an efficient data centre is not important to a real estate developer. They're looking to build the cheapest possible facility that someone will lease from them, because the power bills get sent to the customer."

Slessman compares his company to Southwest Airlines, which "actually manages their energy costs, and can still give people $79 one-way tickets to Phoenix, whereas Delta, United or whoever have to raise the prices."

Variable speed fans, efficient chilled water plants, and a sophisticated air containment strategy all help reduce use of energy, Slessman says. Slessman explains that i/o Data Centers focuses on containing the cold side of the rack, rather than the hot side.

"We actually do containment on both sides, but the critical component is the cold side containment," he says. In a hot-aisle approach, a data centre operator is "cooling the whole room and containing the heat."

Instead, "We let the heat fill the room and we contain the cold air. So we're reducing the volume of air we're rejecting heat from, which at the end of the day is much more efficient than simply containing the heat."

Earlier this month, Slessman appeared at Gartner's Data Center Conference to discuss i/o Data Centers' solar project and how to build highly efficient and reliable data centers at large scale. There's a simple reason why Slessman spends so much of this time talking about efficiency.

"Clearly, energy is our single largest cost," he says.