By KERRY SMITH BUCK
The pace of data center construction across the U.S. doesn’t appear to be slowing.
As recent research reveals, hyperscalers – large-scale cloud service providers that offer computer resources, storage and networking capabilities – are on track to command 60 percent of global data center capacity by 2030, according to Synergy Research Group.
The data industry’s largest operators are continuing to announce new construction projects this year.
A 2025 CBRE report cites that hyperscale colocation now makes up 22 percent of total capacity. This share is expected to gradually decline even as actual colocation, the practice of renting space in a third-party data center to house a company’s servers and other IT equipment, grows at nearly double-digit rates annually.
More ambitious forecasts from the U.S. Dept. of Energy indicate that data centers will consume as much as 580 terawatts annually in 2028, translating to about 123 gigawatts and representing up to 12 percent of total U.S. electricity consumption.
What’s spurring on an insatiable thirst for data centers? In two letters, AI. As artificial intelligence drives unprecedented data center growth, some operators are bypassing traditional power grids, turning to onsite power generation to meet urgent energy demands.
According to Goldman Sachs, data center power demand is projected to grow by at least 160 percent by 2030, primarily driven by AI workloads. Many established markets are already at or near capacity, compelling tenants to prioritize power availability and scalability over traditional market preferences. Secondary and tertiary markets are drawing increased interest despite the significant capital investments required.
The U.S. electric grid will likely face significant challenges in accommodating the projected growth of data centers, according to the DOE, especially with the increasing demand from AI. While the grid has the potential to adapt, it will require substantial investments in transmission infrastructure.
While not a preferred choice – especially for large hyperscale facilities – onsite solar is growing in popularity as companies look to boost their green credentials and save money due to high energy costs.
In 2024, according to Colliers, the data center industry continued its unprecedented growth, shattering previous records and positioning itself for continued expansion. North America’s third-party operator supply grew more than 40 percent, from 12.4 gigawatts in 2023 to more than 18 gigawatts in 2024, not including the additional 30 gigawatts of planned capacity. This growth, says Colliers, was driven by the accelerating pace of digital transformation and the growing adoption of AI across industries, with hyperscalers like Amazon, Google, Meta, Microsoft and Oracle leading the demand.
In light of this zealous demand for electric power to propel huge data centers, the industry continues to face significant power challenges.
According to McKinsey, the U.S. could experience a data center supply deficit of more than 15 gigawatts by 2030 – close to the size of today’s third-party market. The rapid growth of AI workloads has dramatically amplified power issues, as AI consumes substantially more power per rack than traditional workloads, putting pressure on an already limited infrastructure. With power availability becoming the primary limiting factor in traditional markets, new markets are emerging, often near established ecosystems that embrace development. Hillsboro and Reno have grown as extensions of Northern California’s market, while Columbus and Minneapolis have gained traction due to their proximity to Chicago.
New and unexpected players are also entering the market, drawn by access to existing power infrastructure. Core Scientific, for example, is investing $4 billion to transform its Bitcoin mining facilities in Denton, Texas into AI-focused data centers. Applied Digital secured $450 million from investors like Macquarie, NVIDIA and others to upgrade equipment and build one of the world’s largest data centers.
Data center developers and operators are finding power harder to come by than ever. Amid these challenges, some data centers are rethinking their approach by adopting behind-the-meter (BTM) configurations, where power generation and consumption occur on the same site. A BTM system provides power that can be used onsite without passing through a meter, while a front-of-meter system provides power to offsite locations.
Examples of BTM as it pertains to data centers include rooftop solar and battery storage.
Rooftop solar can be found at U.S. data centers being built for Meta, Google and Amazon. Last fall, construction began on the 715,000-square-foot data center in northwest Ohio, with completion expected in 2026. Rooftop solar is part of the design, enabling Meta to generate some of its needed power onsite. A second Meta data center with a similar approach has been announced at a site near Toledo, Ohio.
Google is actively working to power its data centers with solar energy, with various projects underway around the U.S. and beyond. These include partnerships with renewable energy developers such as Intersect Power, the construction of new solar farms and the integration of solar power into existing data center operations. Cedar Rapids is one of many sites where Google is building a data center to include onsite power generation.
And in Richmond County in North Carolina, Amazon is building a $10 billion data center with active plans to include onsite solar power generation.
Digital Realty currently has 19 sites hosting behind-the-meter solar installations totaling 9.8 megawatts of capacity. The company says that it has an “additional roadmap to continue to grow, with additional projects in the planning or construction stage.”
Iron Mountain’s 830,000-square-foot NJE-1 facility, a former New York Times printing facility in Edison, N.J., was retrofitted with a solar rooftop in 2020. At that time, Iron Mountain said the 7.2 megawatt system – which it claimed was the largest such deployment at a data center globally – would cover around 15 percent of the 30-megawatt site’s needs.
Integrating solar panels in the design of new purpose-built data centers is ideal, as opposed to retrofitting an existing facility. With new builds, operators can ensure photovoltaic systems are capable of generating the maximum energy needed. Data centers have far greater cooling requirements than other industrial buildings, says Anthony Maguire, managing director of energy consulting firm Longevity Power, which means more HVAC equipment on the roof. “We might say we want all new development projects in one market to include solar,” he says. “And then we can build that in as part of our design, and maybe we can redesign the cooling equipment so there’s more rooftop space to accommodate solar. That could be an example of how we would massage our designs to accommodate more solar in a market where it’s attractive.”
Space is the biggest consideration when looking at rooftop solar. Many data centers feature large amounts of plant equipment – such as chillers and generators – on the roof, meaning there is often not enough space to justify a solar deployment. And those that do today might not have future capacity if the operator has any desire to expand capacity and add more chillers. Second-biggest is weight; solar PV systems add approximately three to six pounds per square foot, according to Longevity Power. A single solar panel weighs between 40 to 45 pounds.
Solar deployments can last as long as 20 years, according to Data Center Dynamics.
Actual installation of the panels is relatively quick. Most deployments can be done in a few weeks.
Longevity engineers say there needs to be adequate capacity on the host building’s main electrical distribution board, alongside adequate space in its meter room to accommodate a separate distribution board for the solar PV system. Rooftop access is critical.
But for any sizable data center, rooftop solar is unlikely to cover a large portion of a facility’s energy needs, according to CBRE. Most solar deployments are in the hundreds of kilowatts, CBRE says, compared to megawatts of demand per data hall at today’s hyperscale facilities such as Google’s and Meta’s.
Sustainability is often a key priority of companies investing in onsite, solar-powered data centers. In some markets, some degree of onsite generation is a necessity for a company to move its proposed data center facility through the planning process.
“Onsite solar power is one of the lowest-cost sources of clean energy but can have some limitations,” says Chris Pennington, director energy and sustainability at Iron Mountain Data Center. “The biggest limitation of solar power is that the volume of energy it produces is often not equal to the site’s total electricity consumption. While space constraints often limit onsite solar’s ability to fully power data centers, its growing economic appeal suggests it could increasingly be required as part of construction and permitting processes in some markets.”