Are green IT premiums worth the cost?

Businesses increasingly are investing in green machines. But do the green features make up for the added cost?

Organisations are investing in green computers -- that is, machines that are energy efficient and built in an environmentally responsible manner -- at ever-increasing rates. Sometimes they pay a small premium to do this. Is it worth it? They seem to think so.

And their belief is not unfounded. Organisations that invest in green hardware find that the energy savings, extended product lifecycle, and other benefits more than make up for the additional price of that hardware.

What's more, demand for green computers appears to be on the rise. Twenty-two per cent of the computers shipped worldwide in 2007 (around 109 million) were registered on EPEAT (the Electronic Product Environmental Assessment Tool), up from around 10 per cent in 2006. Maintained by the Green Electronics Council (GEC), EPEAT is a searchable database of computer hardware that meets a strict set of environmental criteria. Among them, registered products comply with Energy Star 4.0; have reduced levels of cadmium, lead, and mercury; and are easier to upgrade and recycle. Depending on how many criteria they meet, products receive a rating of Bronze, Silver, or Gold.

The price of 'greenovation'

One of the key questions, though, is whether companies need to pay a premium for the green traits they seek. Patricia Atherton, engineer manager at hardware vendor MPC, acknowledges that, at times, the answer is yes, depending on the rating level (Bronze, Silver, or Gold) of the product. "Silver and Gold products will comply with more challenging requirements, and this might affect the cost of certain components," she notes.

For example, she says, "LCD on monitors, laptops, and integrated systems must have reduced amounts of mercury ... In order to elevate this product rating, the mercury content must be reduced to a minimum or eliminated. The technology is there -- LED backlit LCD -- but at a slightly higher price than a regular LCD with CFL lamps."

Another factor, Atherton says, can be the use of plastic parts containing high recycled-material content. "Since this may affect the properties of the plastics, requiring special techniques or materials, plastic components manufacturers may increase their prices as their own costs increase."

Brad Fry, environmental standards compliance engineer at Canadian computer manufacturer MDG, noted that there are, for now, higher costs associated with designing and certifying greener products. "There are some moderate product cost increases but no significant extra labor costs incurred in the production process for a greener computer. However there will be a one-time increase during the product design phase for engineering and certification costs to ensure quality and technical standards are met."

Ultimately, though, he expects prices for green wares to drop: "As demand for more environmentally friendly computers increases, the volumes sold are increasing, and therefore, the extra engineering costs become less significant and the product costs differences will continue to diminish."

Worth the price

Even if companies do pay a slightly higher sticker price for a green product, its energy efficiency, longer life, and other green-oriented benefits often more than make up for the cost. The Green Electronics Council says, "manufacturers and purchasers will actually save almost four billion dollars (US $3,660,553,851) over the life of the EPEAT products sold in 2007, primarily from reductions in energy use."

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